The Wen Ho Lee story was hardly a shining moment in American journalism. But the settlement Lee won recently from media organizations is likely to be far more damaging to the field.

It's easy to be sympathetic to Lee, a Taiwanese-American and former scientist at Los Alamos National Laboratory who was implicated as a spy for China but never formally accused of espionage. But beyond Lee's personal interests, a $750,000 settlement paid to Lee by several news media outlets compromises a fundamental notion of a free democracy: an informed public.

The settlement puts a price on protecting a journalistic source. When reporters can't protect the names of confidential sources, a major tool to get at the truth is taken away.

The Lee story had national impact and took a personal toll on the scientist.

Lee lost his job and spent nine months in solitary confinement. Ultimately, he pleaded guilty to a minor charge and a judge apologized to him for his incarceration.

But the resulting lawsuit Lee filed in 1999 didn't sue over defamation, or whether stories about him were inaccurate. Instead, Lee used the U.S. Privacy Act to sue the Energy and Justice departments for violating his privacy rights. The media was only party to the suit after five reporters were subsequently subpoenaed to give up their sources' names.

The reporters' media organizations — The Associated Press, The New York Times, the Los Angeles Times, The Washington Post and ABC — fought the subpoenas until June 2, when they agreed to settle. That protects the reporters and their sources, but it sets the alarming precedent: If you're the subject of a leak, you now have a prescribed way to effectively sue a news organization. If you're part of a news organization, you now have a price tag for the kind of breakthrough journalism in the public interest that relies on unnamed sources. For some media companies, it will be too high a price.

Invariably, the public is the loser.

This reinforces the need for a federal shield law that protects reporters and their confidential sources. But that's unlikely given the direction of other recent cases where reporters have been successfully compelled to testify.

The Lee settlement marks the further erosion of journalistic privilege, and a bad omen for all those who care about the truth.