Conservative 'filmmaker' James O'Keefe appearing on Fox News in 'pimp' regalia
Looking back, there may have been signs it was a fake.
Amazing. Only days before the November elections, conservative website The Daily Caller ran with a story accusing Democratic Sen. Robert Menendez of visiting prostitutes during a vacation to the Dominican Republic, based on a videotape from the supposed prostitutes themselves. An FBI investigation wasn't able to find any evidence supporting the story, and now it turns out the whole thing looks to have been faked:
An escort who appeared on a video claiming Sen. Robert Menendez (D-N.J.) paid her for sex has told Dominican Republic police that she was instead paid to make up the claims in a tape recording and has never met or seen the senator before, according to court documents and two people briefed on her claim.

The woman identified a lawyer who approached her and a friend to make the videotape, according to affidavits obtained by the Post. That man has in turn identified another lawyer who gave him a script for the tape and paid him to find women to fabricate the claims, the affidavits say.

There's no confirmation so far on who paid for the fake claims, but since the Daily Caller video surfaced a mere five days before Menendez's reelection, it seems quite likely to be politically motivated (yes, I managed to say that with a straight face—congratulate me).

In any event, The Daily Caller looks to have been either badly burned, gullible, or both. Good show, conservative news sources. Again.