Jesse James Talks About Sandra Bullock Baby, Nazi Rumors

May 25, 2010— -- Jesse James said he lost two of the things he loves most in the world: his wife, Sandra Bullock, and the baby they spent four years waiting for.

For James, seeing the recent People magazine cover of his estranged wife smiling up at their 3 1/2-month-old newborn was a difficult reminder that he was absent.

"It made me sad, but I realize why things have to be done in a certain way," he said in an elxlusive interview with ABC News Nightline, pointing out that adoption agencies could be critical given his villainous image in the tabloids.

James, 41, said he and Bullock, 45, found out around Christmas 2009 that the adoption went through and welcomed Louie, born in New Orleans, into their family on New Year's Day.

Watch the exclusive interview with Jesse James tonight on a special edition of "Nightline" at 11:35 p.m. ET/PT.

When asked why they adopted a black child, James said he "didn't care what color" the baby was.

"My only prerequisite for adopting a baby: I want the baby that needs us the most," he said.

In the months before James' infidelity made headlines, the 41-year-old owner of West Coast Choppers garage said watching Bullock be a mother to Louie strengthened their relationship.

"To see her in the role as mother is, like, one of the most amazing things I've ever seen. She is like a fish to water ... as soon as she put that baby into her hands it was automatic and amazing," James said. "I found a new trust for her, like I knew she wasn't going to leave, and our relationship blossomed."

Bullock had been a stepmom to James' three children -- daughter Chandler and son, Jesse Jr., whom he had with his first wife, Karla; and a daughter, Sunny, whom he had with his second wife, adult film star Janine Lindemulder.

James admits he shattered a seemingly-perfect relationship by having affairs outside his marriage.

I "took a pretty amazing life and amazing success and marriage ... and threw it away by my own hands," he said.

But in the midst of his affair, James told Mabrey, he wanted to get caught.

"When I was doing it, you know, one, I knew it was horrible, it made me feel horrible. And two, I knew I would get caught eventually, and I think I wanted to get caught," he said. "I know for a fact now what it was, you know. I mean, it was me trying to self-sabotage my life."

Once a magazine printed a story from one of his alleged mistresses, James said he told Bullock "basically everything" about his transgressions. But had Bullock known any of it was going on?

"I think she's had her suspicions in the past, but, you know, I lied, and lied my way out of it," he said. "I lied to everyone about everything, even to myself."

Bullock 'Proud' When James Went to Rehab

The first reports of James' infidelity came less than two weeks after Bullock took home the best-actress Oscar for her role in "The Blind Side." A string of women came forward claiming to have slept with him, making James into the villain of the tabloids.

James publicly apologized to Bullock, his wife of nearly five years, and his three kids. Before James checked himself into rehab at the Sierra Tuscon Treatment Center in Arizona in late March, he told Bullock where he was going and why.

"I just told her I was going to get some help and I wanted to make sure she would take care of [his daughter] Sunny," James said. He said Bullock agreed, and said that she was "proud" of him.

James: 'There's Not a Racist Bone in My Body'

But while in rehab, James' reputation took another hit when US Weekly magazine ran a photo of him wearing a German S.S. officer's hat, posing in a Nazi salute. James said the photo, which was taken before his marriage to Bullock, was meant as a joke, but he understands why it has stirred such controversy.

"I could tell by the look on my face it was a joke that was funny then, probably for a minute, but then looking at it in the context of now and in my life, it's not funny," he said. "There's not a racist bone in my body."

After months of keeping a low profile, James said one of the reasons why he sat down for the "Nightline" interview was to dispel these rumors.

"I think out of everything, this is why I'm doing this interview the most, because you know, dealing with losing my marriage and my son and embarrassing everyone and decimating my life, but to be called a racist on top of that is, it makes me really sad," James said.

James told his side of the story and opened up on his past, his time in rehab and what made him cheat, in his first television appearance since news of his affairs came out in March. At one point in the interview, while speaking about the reasons why he was unfaithful, James teared up and asked for a moment to collect himself.

"I've spent my whole life with the kids and with her trying to ... protect her from everything, but the most hurt she's ever been caused is by the person that wanted to protect her," James said. "It's terrible, and she's going to be hurt for a long time."

Watch the exclusive interview with Jesse James tonight on a special edition of "Nightline" at 11:35 p.m. ET/PT.