Paula Deen admitted to using the N-word and telling insensitive racial jokes during a May 17 deposition that was videotapped, the National Enquirer reported in its latest issue.

Deen is the defendant in a $1.2 million dollar lawsuit filed against her and her brother, which was filed in 2012. The former general manager of their Savannah, Ga., restaurant, Lisa Jackson, claimed that Deen used of the N-word. Jackson also alleged sexual harassment and infliction of distress and assault by by Deen's brother, Bubba Hiers.

The Emmy Award-winning cooking personality made the admission of using the N-world while being videotaped. Deen was questioned for three hours and responded that she had used the offensive term.

"Yes, of course," Deen said.

The 66-year-old gave examples of why she used the racist terms.

"It's just what they are - they're jokes...most jokes are about Jewish people, rednecks, black folks...I can't determine what offends another person," she said.

Deen also explained why she wanted black men to play slaves at a wedding. She got the idea from a restaurant where she and her husband dined at.  She described seeing the waiting staff as being middle aged black men in white jackets and bow ties.

"I mean, it was really impressive. That restaurant represented a certain era in America...after the Civil War, during the Civil War, before the Civil War...It was not only black men, it was black women...I would say they were slaves," Deen said.

An insider told the publication that Hiers also made defamatory comments against President Barack Obama and referred to him as the N-word. Deen's family was said to be shocked by her confession and the actions of her and Hiers.

"The personal disclosures uncovered have stunned Paula's family and could mark the collapse of her entire empire," a source said.