David Letterman dropped a bomb on "The Late Show" audience Thursday, revealing that 1) he has had sex with employees of the CBS program and 2) someone tried to extort $2 million from him over these affairs. (See video below.)

From the Los Angeles Times:

During a taping for tonight's broadcast, Letterman told viewers that three weeks ago he was approached by a person who claimed to have information about the host's affairs with female staff members. This person, Letterman said, threatened to expose the relationships unless payment of $2 million was received. The CBS star approached the Manhattan district attorney's office, which began an investigation that culminated in today's arrest of the person, whom Letterman did not identify.

"This morning, I did something I've never done in my life," Letterman said after the opening monologue. "I had to go downtown and testify before a grand jury."

Letterman told the audience that, in his testimony, he admitted to having had sex with female show employees.

"My response to that is, yes I have," he said. (By the way, he got big laughs and applause after saying that.) "Would it be embarrassing if it were made public? Perhaps it would. (More laughs.) I feel like I need to protect these people. I need to certainly protect my family."

The laughter probably isn't coming as readily at home, where Letterman has a wife and child. The talk show host married Regina Lasko, his companion since 1986, on March 19. Their son, Harry, was born in 2003.

I can't help but think a certain former governor of Alaska is enjoying Letterman's public discomfort and private pain.

Update: TMZ.com reports that the arrested suspect is Robert Halderman, 51, an employee of "48 Hours" who lives in Norwalk, Conn.