Well, we can stop wondering whether The Wall Street Journal would allow Rupert Murdoch to screw up its editorial judgment. That already happened.

This morning, The New York Times published a story saying that Paul Steiger, the Journal’s managing editor (and my old boss), along with three other top editors at the paper, sat on news of News Corp’s blockbuster bid for the Journal’s parent, Dow Jones & Co., for at least a week. The stunner, by Andrew Ross Sorkin and Richard Perez Pena, is a case study in how news judgment is blurred when your own organization is at the center of the story. It’s also a preview of the journalistic disaster that would result from a successful Murdoch bid.

The story said that a few days after submitting a formal, written offer for Dow Jones to the company’s board on April 17, Murdoch, News Corp.’s chairman and CEO, wrote Steiger an e-mail marked “Personal and Confidential,” telling him of the bid and promising, ironically given the circumstances, to uphold the Journal’s editorial integrity.

Somehow, according to the story, the news gets to Dan Hertzberg, the longtime deputy M.E. and a great financial reporter in his day, Nikhil Deogun, who recently took over the head of the Money & Investing section, and Marcus Brauchli, a top editor and Steiger’s successor who takes over next week.

Welcome aboard, Marcus!

Murdoch handed Steiger a multi-horned dilemma:

First, this is the biggest business story of the year, and this is the Wall Street Journal. The paper should pursue the story. Must this even be said?

Second, deal stories are at the heart—the core—of the WSJ’s beat. A News Corp. bid for DJ is the biggest deal story in a deal-studded year. And Steiger, his deputy, his successor, and the man in charge of your mergers-and-acquisitions coverage, are sitting on it. Tick, tock. (I don’t think deal stories should be as important as they are, but the WSJ itself—Steiger—made these rules, not me.)

Third, this is valuable information. The bid, as it turned out, added $1.5 billion to DJ’s market capitalization. My 344 shares are now worth $6,500 more than before the bid. That’s real money, and that’s why Congress passed all sorts of laws, and the Securities and Exchange Commission issues all sorts of rules about who should do what with the information.

And of course, the SEC and the New York attorney general are both probing an unusual spike in DJ options before the formal announcement of May 1. Someone bought 280,000 on April 25, eight days after Murdoch’s letter.

The point is, information bouncing around like this leads to all sorts of stories. You should not be in them. But here we have Steiger issuing statements through a spokesperson denying that he spoke to anyone on the business side. And Hertzberg, Brauchli, and Deogun are declining to comment to The New York Times.

The Audit says: If you are a news person and you find yourself (1) speaking through a spokesperson to (2) deny things that should go without saying, and/or (3) not commenting, chances are that some decision you made earlier was the not best course of action.

According to The Times, quoting Dow Jones sources, Steiger felt bound by the ” ’ confidential’ nature” of the email.

The Audit says: someone sending an e-mail that says, “I have made some big news, but this is off the record,” does NOT by itself make it off the record. That goes double if the sender is a press baron, who should know better, sending it to a newspaper editor, whose first loyalty must be to readers. Off the record is an agreement between two parties, I feel; it’s not a one-sided deal, and that even applies to Rupert Murdoch.

Of course, if someone sends The Audit something really good, we can talk about it! I joke here, mostly to concede that this is not an easy question.

If Plato—the ideal editor—got that e-mail, he calls Murdoch on the phone, confirms that he sent it, expresses regret that Murdoch mistakenly believed it was “personal,” assigns fifteen reporters and a helicopter to the story, beats that jugger-not CNBC and the rest of the world, sets the e-mail in type and runs it, including the “Dear Paul,” and the “All best, Rupert.”

Listen, I’m not saying any of this is easy, or that I know what I would do.

Dean Starkman Dean Starkman runs The Audit, CJR's business section, and is the author of The Watchdog That Didn't Bark: The Financial Crisis and the Disappearance of Investigative Journalism (Columbia University Press, January 2014). Follow Dean on Twitter: @deanstarkman.