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On a Friday morning in April, Fox News talk host Jesse Watters walked onstage to a room stuffed with hundreds of insurance executives and agents. Watters was the featured speaker at a breakfast for the Big “I” Legislative Conference, the signature annual event hosted by the Independent Insurance Agents & Brokers of America, where he was invited to participate in an interview with the organization’s retiring president, Bob Rusbuldt.

Watters — who Fox News this week promoted to the all-important 8pm hour — began his interview with Rusbuldt at the Renaissance Washington hotel as expected. The gathered audience, which included a healthy contingent of conservatives, was excited to see Watters speak. But matters quickly took a turn, according to people familiar with the matter who spoke to me on the condition of anonymity.

Watters, who has a history of making offensive remarks on Fox News, made a crude comment questioning the gender of Vice President Kamala Harris, the people said. The gross attempt at humor prompted some laughs, but also outrage.

Some executives, many of whom planned to attend a diversity and inclusion luncheon later in the day, squirmed in their seats as a wave of awkwardness washed over the audience. Others walked out of the room and conveyed to the trade association that they were appalled at the behavior exhibited by Watters.

“It was an epic meltdown afterward,” one of the people familiar with the matter told me. “The organization went into damage control.”

The chat between Watters and Rusbuldt, which continued on after the appalling remark, had immediate consequences. Rusbuldt, who was set to officially retire in August, apologized to those gathered at the diversity-focused luncheon later that day. But ultimately it was not enough to quell the outrage. He was later quietly sidelined from most duties at the insurance organization.