Lobbyist drops suit against Times

A Washington lobbyist and the New York Times announced this afternoon a settlement of a $27 million defamation lawsuit with no money changing hands and no retraction.

Vicki Iseman sued the Times in December, alleging that the newspaper damaged her reputation last year by implying that she had an affair with Senator John McCain in 1999. The front-page story last February damaged McCain's presidential campaign, though he recovered to win the Republican nomination.

Under the settlement, the Times is publishing a "note to readers" that says in part, "The article did not state, and The Times did not intend to conclude, that Ms. Iseman had engaged in a romantic affair with Senator McCain or an unethical relationship on behalf of her clients in breach of the public trust."

Under the settlement, the Times also posted a note from Iseman's lawyers on its website this afternoon. "Had this case proceeded to trial, the judicial determination of whether she is entitled to the protections afforded a private citizen would have been the subject of a ferocious, pivotal battle, with Ms. Iseman insisting on her status as a private person and The New York Times asserting that she had entered the public arena, and was therefore fair game. That judicial contest has now been concluded in this instance, but the issue deserves ongoing scrutiny, certainly in our schools of law and journalism, but also in the arena of public debate," the lawyers wrote.

The Times also posted a response to Iseman's lawyers, saying it had not backed away from the story.

"We stand by our coverage, and we are proud of it," the statement said.

"The McCain campaign and some of its supporters set out aggressively to portray the article in question as a story about an unsubstantiated affair. But it was not that, either explicitly or implicitly," the response continued. "What the article set out to do, and did, was to establish that Senator McCain -- a man whose career was ensnared by scandal and then rebuilt on a reputation for avoiding even the appearance of impropriety -- was sometimes careless of that reputation."

(Full disclosure: The New York Times Co. owns the Globe.)