Tale of the Tape

With its tawdry plot lines involving corporate skullduggery, a steamy extramarital affair and presidential politics, the legal battle between former publishing doyenne Judith Regan and her ex-employer, Rupert Murdoch's News Corp., seems straight out of a potboiler. Now the tale has taken another intriguing and potentially explosive twist with the sudden emergence of a mysterious tape recording.

Long a controversial figure in the publishing industry, Regan had run her own imprint at News Corp.'s book publishing arm, HarperCollins, for 13 years before she was fired for allegedly making anti-Semitic remarks not long after controversy erupted over O. J. Simpson's book, "If I Did It." Regan had spearheaded the book, which she billed as a confession to the double murder by the disgraced gridiron star. In November, Regan filed a $100 million lawsuit against News Corp., accusing the company of, among other things, making her a scapegoat in the Simpson controversy, targeting her with a "deliberate smear campaign" and illegally firing her.

But what seemed like a parochial flap within the publishing industry over O. J. Simpson veered off in a sharply different direction with the lawsuit. The latest bombshell: according to media executives familiar with the situation, Regan has a tape recording that presumably helps to buttress her allegations in her suit. The exact contents of the tape remain unknown, as does its origins. No one approached by NEWSWEEK seemed to know of its provenance—or was willing to discuss it.

But word of the tape's existence, if not the tape itself, has reached the highest levels of News Corp., say four sources who declined to be identified discussing a legally sensitive matter. In fact, the tape may be the catalyst for what publishing executives describe to NEWSWEEK as a recent resumption of negotiations between News Corp. and Regan to settle their battle out of court. News Corp. confirmed that it is again in "conversations" with Regan. Through a spokeswoman, Regan repeatedly declined comment on all aspects of this story.

Of Regan's many assertions in the 70-page lawsuit, perhaps the most incendiary concerns a scenario that would seem like pulp fiction were it not sprinkled with powerful nonfictional personalities. In addition to Regan and Murdoch, perhaps the world's most influential media mogul, it involves a mystery News Corp. executive, former New York City mayor Rudolph Giuliani and his one-time police commissioner, Bernard Kerik.

Kerik was indicted last month on federal corruption charges (he has declared that he is innocent of all charges). In the suit, Regan claims that the News Corp. exec, who isn't identified in court documents, once asked her to "lie to, and to withhold information from" federal investigators who were at the time investigating Kerik. Revealing the information—the executive explained, according to the lawsuit—might damage Giuliani's bid for the 2008 Republican presidential nomination. Because of her perceived threat to his political ambitions, she alleges in the lawsuit, News Corp. targeted her. The suit alleges that News Corp. victimized her with a "deliberate smear campaign." (News Corp. has dismissed Regan's allegations as "preposterous.")