Hit by damaging new revelations about his affair, the embattled Late-Night host tries to save his reputation—and the life he built with his wife, Regina

By Mark Dagostino
Updated October 26, 2009 12:00 PM

It was something of a Late Show tradition. On Thursday nights David Letterman drove his longtime assistant Stephanie Birkitt home from work. For years that meant traveling more than an hour from midtown Manhattan’s Ed Sullivan Theater to drop Birkitt off in the driveway of the modest Norwalk, Conn., home she had shared with her boyfriend, CBS News producer Robert “Joe” Halderman, since 2004. But last December Halderman made a shocking discovery, says his friend and former CBS and NBC medical correspondent Dr. Bob Arnot: a series of diary-like letters on loose sheets of paper that Birkitt, 34, had written to herself describing her ongoing affair with her famous boss. “He was furious,” says Arnot. Halderman, 52, planned to break up with Birkitt but relented when she promised him she would end the affair. Then one Thursday night this past August, says Arnot, Halderman spied the pair parked at the end of his street in Letterman’s car, in a passionate embrace. Halderman, says his friend, “believes he was betrayed.”

A few weeks later, Halderman was in handcuffs, and a very public spotlight was shining into the darker nooks of Letterman’s very private life. On Oct. 1, the same day that Halderman was arrested for allegedly trying to extort $2 million from the Late Show host by threatening to expose his infidelity, Letterman, 62, made his now in-famous on-air admission: “I have had sex with women who work for me.” A few days later, after Birkitt was named as the woman at the center of the scandal, Letterman apologized on-air to his wife, Regina Lasko, 48—the mother of his 5-year-old son, Harry—whom he married last March after dating for more than 20 years. Regina, he said, “has been horribly hurt by my behavior.”

A source close to Letterman says the host is working hard on his marriage and is set to take a much-needed vacation week: “Dave has that midwestern work ethic to persevere and do great shows. But the truth is, he’s 24-7 focused on his wife and son.” This source maintains that the relationships Letterman acknowledged “all preexisted his marriage this year.” Birkitt has made no public comment, and Letterman’s attorney Daniel J. Horwitz slams accusations made by Halderman’s camp. “The D.A. has described overwhelming evidence against Mr. Halderman,” he says in a statement to PEOPLE. “Everything else is simply an effort to divert attention away from that evidence.” Counters Halderman’s lawyer Gerald Shargel: “Mr. Letterman’s conduct will be inextricably intertwined with the proof that both the prosecution and the defense will introduce at trial.”

No one disputes that the scandal has torn back the curtain on Letterman’s idiosyncratic—and, according to friends and sources, rather messy—love life. Lasko, who never speaks to the press and is rarely photographed, is “wonderfully nice” but “long suffering because of the length of time Letterman dated her but wouldn’t marry her,” says one longtime Late Show insider. “She was crazy about him, so she put up with the situation.” But Letterman was always drawn to other smart, funny women as well. “Stephanie is sweet, goofy and quirky, which is a major allure for David,” says the source, who has discussed both Lasko and Birkitt with Letterman. “She’s a peculiar character and David is fascinated with peculiar women. I am quite sure David loves Regina after all these years. But he was in love with Stephanie.”

The two women have much in common. College friends recall Lasko as “sharp and bright and funny,” says Northwestern University classmate Leilani LaBelle. Friendly and always game for pranks, she was “wholesome looking with the cutest dimples,” recalls another. Letterman started dating Lasko when she joined the staff of his NBC Late Night show in 1986, while he was still seeing Late Night writer Merrill Markoe. “David was having flings with lots of girls at NBC,” the Late Show insider says. “He liked Regina because she was fiercely smart.” (Letterman admitted he was terrible at breakups. “He doesn’t know how to say goodbye,” says the source.)

Birkitt, an athletic New Hampshire native, became part of the Late Show staff as an intern in 1996 and later returned to the show after a stint at 48 Hours. “She’s got this incredibly dry, wry sense of humor,” says a longtime pal. “She’s very bright and self-effacing.” When the alleged affair became public, Birkitt took a leave from Letterman’s production company Worldwide Pants and hasn’t been seen in public since. “She knows [the negative publicity] is temporary,” says one close friend who has been in touch with her since the scandal broke. “It hurts for a little while. Her biggest concern continues to be for her family and their privacy.”

Lasko must cope with an even greater burden. “She has made a huge point not to be in the spotlight,” says a TV insider who knows her. So the publicity alone “must be really hard on her.” Should the marriage not be salvageable, a split could be costly: Letterman reportedly made $45 million last year alone, and he and Lasko have homes in Manhattan and North Salem, N.Y., and a sprawling ranch in Montana.

And where does this leave the midwesterner whose gift for offbeat comedy has kept him on the air for nearly three decades? “He’s already weathered this storm,” says one ex-staffer. But “this will be his legacy, and that’s a shame, because he’s better than that.”

Beyond the world of comedy, he has another legacy—and one who matters more than ever. “The most important thing in the world to David is his son Harry,” says the Late Show insider. “That little boy means the world to David.” And that is one crucial reason to make amends. “He did the right thing by coming clean and apologizing,” says a friend of Letterman and Lasko’s. “Now he has to put his life back together.”