This is a rush transcript from "On the Record," October 2, 2009. This copy may not be in its final form and may be updated.

GRETA VAN SUSTEREN, FOX NEWS HOST: Now, is this really something to joke about, Dave? Now, David Letterman admits he has had sex with multiple female staffers, and he says someone tried to blackmail him. The extortion plot started when Dave received a letter. Someone wrote, Give me $2 million or I will expose the affairs.

Last night was no ordinary show for Letterman, and this is just flat-out awkward.

(BEGIN VIDEO CLIP)

DAVID LETTERMAN, HOST, "LATE SHOW WITH DAVID LETTERMAN": The creepy stuff was that I have had sex with women who work for me on this show. Now, my response to that is, Yes, I have.

(LAUGHTER, APPLAUSE)

LETTERMAN: I have had sex with women who work on the show. And would it be embarrassing if it were made public? Perhaps, it would. Perhaps it would.

(LAUGHTER)

LETTERMAN: Especially for the women.

(LAUGHTER, APPLAUSE)

LETTERMAN: But that's a decision for them to make if they want to come public and talk about the relationships, if I went to go public and talk about the relationships. But what you don't want is a guy saying, Oh, I know you have sex with women, so I would like $2 million or I'm going to make trouble for you.

It's been a very bizarre experience. I feel like I need to protect these people. I need to certainly protect my family. I need to protect myself, hope to protect my job, and the friends, everybody that has been very supportive through this.

(END VIDEO CLIP)

VAN SUSTEREN: Joining us live is Alicia Quarles, entertainment editor for the Associated Press. And when I listen to that last thing, where he says he needs to protect his family -- you know, might have been a good idea to sort of have that sort of idea a little earlier, like, before he did it.

ALICIA QUARLES, ASSOCIATED PRESS: (INAUDIBLE) you might have thought about that before you were sleeping with your employees. I can agree with you on that one.

VAN SUSTEREN: Might have been a much better idea. All right, what happened?

QUARLES: This is so odd. So last night on the show, he comes out in this 10-minute-long speech, which is a long time in TV, basically saying, You know what? I did this. But I'm the victim here. This guy is really putting me in a bad place. Odd, odd, odd.

VAN SUSTEREN: And what's this guy supposedly do? What's the...

QUARLES: This guy allegedly is accused of extorting David Letterman for $2 million. Now, the person in question has pled not guilty of allegedly trying to get $2 million from Dave.

VAN SUSTEREN: Where does this guy work?

QUARLES: This guy works at CBS's "48 Hours." And it's interesting because he's an Emmy Award-winning producer, but it seems like he might have had some financial trouble. He had to pay $6,000 a month in child support. There's been reports that the woman he's currently dating may have had a relationship with David Letterman in the past. So it's all extremely murky.

VAN SUSTEREN: And the women -- the women are actually employees, they're subordinates within the organization?

QUARLES: Yes, and what's interesting is you heard him say not, I had sex with one woman, he said, I had sex, plural, with a few. So I think the next step is going to be, Who are these women? Are they still currently employed? When did these affairs take place?

VAN SUSTEREN: Well, you know, the -- not funny thing -- I use the word "funny" loosely. But I mean, the interesting thing is that he thinks he's, quote, protecting them by doing this, but if I were the defense lawyer for this guy, I mean, I -- I mean, when everyone gets on the witness stand and starts (INAUDIBLE) Who are these people?

QUARLES: Exactly.

VAN SUSTEREN: You know, like, these names -- we're just getting the beginning of this because all these women's names (INAUDIBLE) you know -- of course, you know what? They're up to their eyeballs in it, too. I mean, it's, like, I don't give a pass to the women.

QUARLES: I don't give a pass to the women, either. But I think it's hard. You know, if you have a boss that maybe is hitting on you or flirting with you, again, you are two adults and...

VAN SUSTEREN: Now, this is not hitting on you! This is sleeping with.

(CROSSTALK)

QUARLES: ... if you had a boss hitting on you, I mean, how do you react to that?

VAN SUSTEREN: Of course, I met my husband of some 30 years at work, so I might -- I mean, things have changed a little bit, but anyway...

QUARLES: Exactly.

VAN SUSTEREN: But in terms of this, is CBS scandalized?

QUARLES: I don't think CBS is too scandalized because they didn't try to sweep it under the rug. They came straight out. Dave Letterman approached America. He said, You know what? Not, I might have done this, I kind of did this -- yes, I did it. I slept with these people. So they were very honest about it.

VAN SUSTEREN: I'm curious, though, whether there'll be sort of an audience cost because he said -- he said something about there's -- there's been a report or there's an allegation I've been sleeping with women who work for me, and he says, Yes, I have, and then the audience laughs.

QUARLES: The whole thing was awkward. Now, there might be an audience cost. I mean, this is a guy that's pretty much appeals to middle America, wholesome, good values. He's gone after Sarah Palin's underage daughter. He goes after politicians who do the exact same thing, so there's a level of hypocrisy here.

VAN SUSTEREN: But -- but if the audience is laughing, it sounds like -- I mean...

QUARLES: I think the audience...

(CROSSTALK)

VAN SUSTEREN: I mean, that doesn't -- I mean, that doesn't -- people didn't seem to be appalled sitting there if they're laughing.

QUARLES: I think they were laughing because it was awkward. Here you come to David Letterman, and you think that you're going to be in for a great hour of comedy, and he starts out with this. To be honest, I think the audience was thinking, Wait, is this a joke? What's going on here?

VAN SUSTEREN: all right. And I can only think (INAUDIBLE) I mean, I know that he's only been married about six months, but he's been with this woman for a long time.

QUARLES: He's been with this woman since 1986. They just got married in March. They have a son together. But yes, they've been together for a very long time.

VAN SUSTEREN: And I bet his son is really proud of him. I know he's a young boy. But I mean (INAUDIBLE) to this poor -- you know, poor young boy.

QUARLES: Same thing with a lot of men in power. I mean, you look at the South Carolina governor. You look at Eliot Spitzer. A lot of men in power do some bad things.

VAN SUSTEREN: And you know what? As I noted earlier, is that, you know, while I'm -- you know, I think it's, you know, bad what David Letterman did, you know, with employees who are of lesser stature in the organization with him, but I also blame the women. I mean, I don't know where they are on sort of the -- the totem pole, but you know, while we criticize the men, it takes two to tango.

QUARLES: Yes. It absolutely takes two to tango. And you know, no matter how old these women are, you're adults. You know what it's like to be a professional in the workplace. You know how to conduct yourselves. And also, if they knew that he was with his now wife for many years, there's some moral ground here.

VAN SUSTEREN: But it sounds like he's laughing it off. He may be laughing all the way to the bank.

QUARLES: We'll see.

VAN SUSTEREN: Anyway, Alicia, thank you.

QUARLES: My pleasure.

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