I believe that with this, politico does not realize the extent to which it has damaged itslf...but it will.
How did it damage itself? This is what Politico is, this is what Politico does. There is no lawsuit here, and Politico has no credibility left to lose with conservatives. If pressed, Martin will probaby imply (but not state clearly) that Levin lied to protect his friend Sarah Palin. If pressed harder, he will grudgingly admit that perhaps his source was not quite as "familiar with the situation" as he had, in good faith, believed. In fact, he probably just made the whole thing up.