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Age of Obama
Barack Obama's presidency

Bush End Game
George W. Bush's presidency since 2007

Bush - Second Term
George W. Bush's presidency from 2005-06

Bush - First Term
George W. Bush's presidency, 2000-04

Who Is Bob Gates?
The secret world of Defense Secretary Gates

2004 Campaign
Bush Bests Kerry

Behind Colin Powell's Legend
Gauging Powell's reputation.

The 2000 Campaign
Recounting the controversial campaign.

Media Crisis
Is the national media a danger to democracy?

The Clinton Scandals
Behind President Clinton's impeachment.

Nazi Echo
Pinochet & Other Characters.

The Dark Side of Rev. Moon
Rev. Sun Myung Moon and American politics.

Contra Crack
Contra drug stories uncovered

Lost History
America's tainted historical record

The October Surprise "X-Files"
The 1980 election scandal exposed.

From free trade to the Kosovo crisis.

Other Investigative Stories



Inside America's 'Adjustment Bureau'

By Robert Parry (A Special Report)
March 14, 2011

Today’s American political crisis has many facets, but a key one is narrative – how the history and ideals of the United States are understood by the public. The strategic importance of narrative is why the Right has invested so much in building media to redirect and control the national storylines.

Thus, the challenge for those of us who believe that the lifeblood of a democracy is an informed electorate has been to pull the narrative back to facts, empiricism and, yes, truth. Traditionally, that has been the role of the mainstream press but – itself under extraordinary pressure from the Right – the U.S. news media has chosen, more often than not, to put careerism ahead of journalism.

Almost like scenes from Matt Damon's new movie, "The Adjustment Bureau," the national narrative gets diverted from one reality toward a storyline favored by the powers-that-be, with American right-wingers and neoconservatives playing the central roles in hijacking the reality, but with the mainstream press playing along.

For instance, one ugly truth of the 1980s was that President Ronald Reagan and his administration were tolerating drug trafficking by the Nicaraguan Contra rebels. Senior U.S. officials knew about the Contra crimes but recognized that if the American people learned the truth, they would turn against one of Reagan’s favorite foreign policy initiatives.

So, aided by the then rapidly growing right-wing media and abetted by an intimidated mainstream media, the Reagan administration created a false narrative, that the extensive evidence of Contra-connected cocaine smuggling was simply a “conspiracy theory,” nothing to be taken seriously.

This false narrative survived in Official Washington despite a CIA inspector general’s investigation which acknowledged in a 1998 report that the Contras, indeed, were deeply involved in drug smuggling and that CIA officers had looked the other way.

Yet, even after this CIA admission, the major national news media – including the New York Times, the Washington Post and the Los Angeles Times – continued to mock journalist Gary Webb, whose investigative work had forced the CIA’s inquiry. Condemned to live as a pariah for getting the Contra-cocaine story "wrong," Webb committed suicide in 2004. [See’s “Big Media’s Guilt in Gary Webb’s Death.”]

The Contra-cocaine story is instructive in another way, because what actually happened was the creation of two parallel narratives, one based on facts (i.e. the evidence that the Reagan administration covered up for the Contra-cocaine crimes) and the other (the old false “conspiracy theory” storyline) sustained by the immense power of Reagan’s apologists and the mainstream media’s complicity.

Though surely not unprecedented, this phenomenon of contradictory but coexisting narratives emerged as a regular feature of American politics during the 1980s. It stemmed, in part, from the need of national powerbrokers – who had been stung by the popular resistance to the Vietnam War – to devise new ways to thwart threats posed by a well-informed and engaged electorate.

The answer for how to negate an active population was to create – and amplify – false narratives that average Americans either believed (because they heard them so often on so many media outlets) or that at least created enough confusion to diffuse any concentrated response from the broad public.

The decisive moments in this post-Vietnam transformation of the American political/media system occurred during the 12-year reign of Ronald Reagan and George H.W. Bush as they developed sophisticated propaganda techniques that could quash what Bush derided as the “Vietnam Syndrome,” i.e. the public’s reluctance to be drawn into future imperial wars. [See’s “Kicking the Vietnam Syndrome.”]

Battle’s Turning Point

For me, having worked during this period as an investigative reporter on national security issues for the Associated Press, Newsweek and PBS “Frontline,” the turning point in the battle came during the Iran-Contra Affair, the biggest scandal to rock Reagan’s presidency.

Essentially, Iran-Contra was a clandestine operation that involved the Reagan administration engaging in two illegal activities simultaneously: selling weapons to Iran, which was then designated a terrorist state, and using some of the profits to arm the Nicaraguan Contras in defiance of a law passed by Congress prohibiting such assistance.

President Reagan and Vice President Bush undertook these two operations without notifying Congress, which they were legally obligated to do. The few early press reports about these illegal activities, including some stories of mine, were brushed aside as “conspiracy theories.”

Official Washington mostly bought into that "conspiracy theory" narrative, though there were still a few of us in mainstream journalism who were arguing for the other narrative, that there was an actual conspiracy underway, one overseen by the White House.

Then, in October and November 1986, two events – the shooting down of a Contra supply plane and an article in a Lebanese newspaper – exploded the Reagan-Bush narrative, though Reagan, Bush and other senior officials continued issuing dishonest denials in a desperate bid to save it.

Finally, those lies collapsed when the administration was forced to disclose that some Iranian profits had gone to the Contras, giving the scandal its name.

At that point, the White House and its media acolytes had no choice but to shift their false narrative, but only slightly. They began insisting that Reagan and Bush had been kept in the dark about these illegal operations which had been run by “rogue” national security aide Oliver North and other “men of zeal.”

In my first days at Newsweek in February 1987 (after leaving the AP), I reported that this new narrative was simply a revised cover story meant to protect Reagan from possible impeachment. Still, the “men of zeal” storyline evolved into a popular conventional wisdom and my Newsweek superiors made clear to me their displeasure that the magazine had briefly veered off in the direction that my reporting had indicated.

I soon came to understand that top Newsweek editors, especially executive editor Maynard Parker, shared the view that, in Parker’s words, it would not be “good for the country” for the Iran-Contra scandal to reach President Reagan. Like many elite media executives, Parker saw his role as less helping to inform the public than to guide the public down certain desired paths.

As a member of banker David Rockefeller’s Council on Foreign Relations and an associate of former Secretary of State Henry Kissinger (who was also a favorite of Washington Post-Newsweek publisher Katharine Graham), Parker acted as if he feared the consequences if the American people developed too negative a view of the national ruling class.

A senior Newsweek researcher once warned me that I should watch my back with Parker because he was considered “CIA” due to a cozy relationship with the agency earlier in his career. As it turned out, Parker became the chief obstacle to my efforts to pursue promising avenues of the Iran-Contra scandal. [For more details, see Robert Parry’s Lost History.]

Reshaping the Narrative

But Parker was not alone in wanting to wrap up the Iran-Contra controversy and be done with it. In Congress, the investigation – led by Rep. Lee Hamilton, D-Indiana – also pulled up short of the Oval Office door, faulting Reagan for bad policy decisions but not specific criminal acts.

The new official narrative was that Reagan authorized arms shipments to Iran in 1985 to gain Iran’s help in freeing American hostages in Lebanon and that he was essentially taken in because each time one American was freed another was kidnapped. And while Reagan wanted North and others to assist the Contras, the President didn’t specifically know about the diversion of Iranian profits to the Contras.

However, this narrative didn’t really explain the facts. For instance, the evidence was that the Reagan administration had approved weapons shipments to Iran, via Israel, as early as 1981 when there were no U.S. hostages in Lebanon. One Israeli flight had crashed inside the Soviet Union in July 1981 – and the Reagan administration had issued misleading press guidance to conceal its prior knowledge of the operation.

In other words, the facts pointed to a different narrative, one in which Reagan and Bush had agreed on weapons sales to Iran much earlier, possibly right after taking office on Jan. 20, 1981, if not before. As Reagan was being inaugurated, the Iranian government freed 52 American hostages who had been held in Iran for 444 days, a crisis that had helped destroy President Jimmy Carter’s campaign for reelection.

There were also more and more witnesses claiming knowledge of secret contacts between Republican emissaries and Iranian leaders during the 1980 campaign. In other words, the evidence suggested that the original Reagan-Bush arms deals with Iran were part of a Republican effort to derail Carter’s attempts to get Iran to release the hostages before the election.

At Newsweek, I thought I might have reached a breakthrough in my embattled Iran-Contra investigation in early 1990 when I gained access to former Israeli intelligence officer Ari Ben-Menashe, who had been arrested by the FBI over plans to sell planes to Iran and was awaiting trial in Manhattan’s federal prison.

When I interviewed Ben-Menashe in jail, he offered a strikingly different Iran-Contra narrative than Washington’s conventional wisdom. Ben-Menashe traced the Israeli arms sales to Iran back to 1980 – and to a collaboration between the Likud Party and the Republicans to get rid of President Carter, who was disdained as much by Likud as by the Republicans.

Selling war materiel to Iran during the eight-year-long Iran-Iraq War also profited Likud extravagantly allowing the party to divert some of the tens of billions of dollars to support Jewish expansion onto the West Bank, Ben-Menashe said.

According to Ben-Menashe’s narrative, the so-called Iran-Contra sales of 1985-86 represented an effort by Israel’s Labor Party to get in on the lucrative business. He said the bitter Likud-Labor rivalry explained some of the troubles that beset these later deals with Iran.

Though there was logic in Ben-Menashe’s account, it was also clear to me that the Israeli government would go to extraordinary lengths to discredit him and his story. Otherwise, the American people might conclude that Israel had not only spied on its U.S. ally (as in the Jonathan Pollard case) but had covertly interfered with a U.S. presidential election.

If Americans came to believe that Israeli hardliners would dare to be that audacious, the political ramifications for Israel could have been severe.

Nevertheless, I began checking out Ben-Menashe’s storyline – and his bona fides. Initially, the Israeli government insisted that Ben-Menashe was an imposter. However, I was able to obtain several letters of reference that Israel Defence Forces officials had written when he left his military intelligence unit in 1987. They attested to his important work on sensitive operations over the preceding decade.

For instance, one signed by IDF Col. Pesah Melowany said Ben-Menashe had been “responsible for a variety of complex and sensitive assignments which demanded exceptional analytical and executive capabilities.” [To see three of Ben-Menashe's letters of reference, click here.]

Confronted with this evidence, Israeli government spokesmen backtracked, admitting that Ben-Menashe had worked in an IDF intelligence unit, but they began insisting, at least to journalists that they considered friendly or gullible, that Ben-Menashe was only a low-level translator.

Though that claim didn’t match with the descriptions in the letters – none mentioned anything about language skills – the low-level-translator assertion became a crucial firebreak that Israel used to stop Ben-Menashe’s allegations from spreading too far into the mainstream U.S. news media.

Also, despite the growing body of evidence that Washington's favored Iran-Contra narrative was just another bogus cover story, I knew the deck was stacked against me convincing my Newsweek editors to press ahead on Ben-Menashe’s stories or any other aspect of the scandal.

Indeed, by then, it was clear my days at Newsweek were numbered. I was told that executive editor Parker wanted me out and I had concluded that there was no longer any point in me staying. So, in June 1990, I departed Newsweek and began work on my first book, entitled Fooling America, which chronicled how the Reagan administration had pioneered new domestic propaganda tactics.

(After winning acquittal on the federal charges against him, Ben-Menashe further antagonized his former employers by providing fresh details about Israel’s nuclear weapons program to investigative journalist Seymour Hersh for his book, The Samson Option.)

A New Assignment

In summer 1990, after leaving Newsweek, I was approached by PBS “Frontline” producer Martin Smith, who asked me to examine the controversy over whether Reagan’s 1980 campaign had contacted Iranians to stop President Carter from pulling off a pre-election hostage release, a set of allegations that had become known as the October Surprise.

At first, I hesitated, concerned that such a difficult assignment might further damage my career, but I eventually agreed, undertaking the investigation which reached from the United States to Europe to Israel to Iran.

In April 1991, we broadcast a documentary, “America Held Hostage,” that laid out much of the evidence for believing that the Republicans had struck a deal behind Carter’s back, but we also raised red flags about the credibility of some “witnesses.” That same week, former National Security Council staffer Gary Sick published an op-ed explaining why he had come to believe the October Surprise allegations were true.

Less publicly, other investigative discoveries were putting cracks in the Iran-Contra conventional wisdom. In 1991, special prosecutor Lawrence Walsh broke through the White House-organized Iran-Contra cover-up with the discovery of Defense Secretary Caspar Weinberger’s hidden notes, showing that Vice President George H.W. Bush had lied about being out of "the loop."

Walsh’s investigators also were contemplating the possibility that the two controversies – October Surprise and Iran-Contra – were linked.

It made little sense, the investigators thought, that the Reagan administration would keep selling arms to Iran to free American hostages in Lebanon only to have others taken. So, they considered a different narrative, that Reagan’s men had no choice but to make these deals with Iran because they had begun doing so in 1980 before taking office.

Walsh’s investigators even polygraphed Bush’s national security adviser Donald Gregg regarding his alleged role in the 1980 contacts with Iran. The denials from Gregg, a former CIA officer, were judged deceptive. [See Final Report of the Independent Counsel for Iran/Contra Matters, Vol. I, p. 501.]

The October Surprise motivation also fit better with Reagan’s initial reaction to the Iran-Contra disclosures in 1986. Reagan flatly denied that the sales were arms for hostages – and only grudgingly reversed his position under immense political pressure as the substitute narrative of a botched but well-meaning hostage initiative was being put in play by his White House aides.

Momentum for the Truth

In spring 1991, the combination of the PBS documentary and Sick’s op-ed in the New York Times created momentum among some Democrats in Congress to examine what was beginning to look like the October Surprise prequel to the Iran-Contra story.

But the stakes were also rising on the other side. Not only was President George H.W. Bush beginning his campaign for reelection, but the Republicans faced the prospect of seeing their treasured Reagan legacy shattered – if the public came to accept that the GOP icon had obtained national office, in part, through an act of treachery with a foreign enemy.

Other powerful Americans also faced potential damage if the full October Surprise story were told. At Frontline, our investigation had turned up evidence that David Rockefeller, who had been the banker to the ousted Shah of Iran, and his longtime aide Henry Kissinger were hovering in the background.

Rockefeller and Kissinger could be detected pulling strings and holding secret meetings with Reagan’s campaign chief William Casey, a key October Surprise suspect. [For details on the Rockefeller-Kissinger tie-in, see Parry’s Secrecy & Privilege or’s “How Two Elections Changed America.”]

And, the Israelis were determined to head off any investigation into the possibility they had helped remove a sitting U.S. president who had pressured them into accepting a land-for-peace swap with Egypt in 1978 and was expected to push for a similar deal with the Palestinians if he won reelection.

In other words, some very powerful forces would do whatever they could to prevent an aggressive investigation of the October Surprise controversy, an inquiry that might establish a dangerous new narrative, drastically reshaping how Americans understood their recent history.

So, it was not surprising that U.S. news organizations with close ties to these powerful forces would step to the fore in 1991 to do whatever was necessary to diffuse this investigative momentum.

The major pushback against the October Surprise story came from my old colleagues at Newsweek and from The New Republic, a once-leftist magazine that had been purchased by neoconservative Martin Peretz, a staunch and proud defender of Israeli government interests.

After the PBS documentary aired in April 1991, I received a call from a Newsweek correspondent who told me that executive editor Parker had considered the program an act of “revenge” on my part and was ordering up his own investigation. I responded that revenge was the last thing on my mind.

However, it soon became clear that Newsweek’s top brass was determined to knock down the story, although I came to the conclusion that this assault was motivated less by animus toward me than by a desire to protect the image of the Establishment, i.e. the likes of Rockefeller, Kissinger and Bush.

At The New Republic, Peretz gave the knockdown assignment to Steven Emerson, who then was still regarded as a mainstream journalist though one known to have extremely close ties to Likud and Israeli intelligence.

On the same weekend in November 1991, the two magazines splashed on their covers similar October Surprise debunking stories containing matching alibis which supposedly proved  that another witness, Iranian financier Jamshid Hashemi, was lying about a July 1980 meeting between William Casey and senior Iranians in Madrid.

The two magazines reported that Casey couldn’t have attended the meeting in Madrid, as Hashemi described, because Casey was at a London historical conference on one key morning (July 28, 1980) when Hashemi’s account would have placed him in Madrid.

The two magazine articles and their over-the-top ridicule of the October Surprise mystery had a powerful effect on Washington’s conventional wisdom. The old narrative, which held that the Iran-Contra scandal was just an aberration confined to 1985-86 and that the October Surprise allegations were a hoax, was bolstered.

Inquiries in Retreat

The widespread smirking within the power circles of Washington had a predictable impact on Congress, where the Senate backed away from a full-scale investigation and a House task force -- again headed by Lee Hamilton -- acted as if it would do little more than go through the motions.

Those of us who had worked on the Frontline investigation soon determined that the Newsweek/New Republic alibi was the real hoax, but we had no ready access to a media outlet for countering the magazines’ false account. All we could do was get to work on a follow-up documentary that would not be ready to air for months.

In the meantime, the renewed conventional wisdom that the October Surprise story was a crazy conspiracy theory hardened like concrete.

By the time, the Frontline update aired in April 1992, it didn’t matter that we showed how the New Republic/Newsweek alibi for Casey was false. No one seemed to care that the two magazines had misread the evidence of attendance reports for the London conference and had failed to do the interviews with participants that would have shown their “reporting” was completely wrong.

Though we talked to a variety of conference participants, our key follow-up interview was with historian Robert Dallek, who had given the presentation on the morning of July 28, 1980. Dallek told me that he had looked around the conference room for Casey but that Casey was not there.

The real evidence showed that Casey did not arrive at the conference until the afternoon, thus opening up the time “window” for a morning meeting in Madrid as described by Hashemi.

In other words, The New Republic and Newsweek alibi was bogus, a point that even the determined-to-debunk-the-scandal House task force was forced to acknowledge. It then concocted a different (and equally false) alibi to fill the hole. [See Parry’s Secrecy & Privilege or’s “The Bushes & the Death of Reason.”]

Later, I was told by investigative reporter Craig Unger, who had been hired by Newsweek to work on the October Surprise story, that he had been shocked by the magazine’s disingenuous assessment of Casey’s time “window.”

“They knew the window was not real,” Unger said of his Newsweek editors. “It was the most dishonest thing that I’ve been through in my life in journalism.”

Biased Journalism

Neither Newsweek nor The New Republic ever corrected their error regarding the bogus alibi for Casey or their false claim that the alibi proved Jamshid Hashemi to be a liar.

Meanwhile, Emerson’s escalating attacks on me after his October Surprise debunking article also were exposed as involving false claims.

Not only was his Casey alibi wrong, but Emerson insisted that he had obtained, through the Freedom of Information Act, unredacted versions of George H.W. Bush’s 1980 Secret Service records, suggesting that I was lying when I reported that the released forms had redactions.

When I checked with the Secret Service as to why Emerson would have received unredacted versions when Frontline, the U.S. Congress and even federal prosecutors were only given redacted documents, a Secret Service spokesman explained the reason simply: Emerson was lying.

So, I wrote letters to his editors challenging Emerson to produce his supposedly unredacted documents. His response was to threaten me with a libel suit for asserting that he had lied about having the unredacted documents, but he still refused to produce his claimed documents.

Emerson also seemed to have unlimited resources to bully me with high-priced lawyers. I was forced to dig into my children’s college fund to come up with money for my own attorney.

For months, the Kafkaesque standoff continued – with Emerson demanding that I admit that he possessed documents that he refused to reveal. If I didn't recant, his lawyers warned, I would face a financially ruinous trial.

Finally, I made a FOIA request for Emerson’s FOIA request. Sure enough, when the Secret Service delivered exactly what it had given to Emerson, the documents were filled with redactions.

Emerson was forced to admit that he never had the unredacted records, blaming the error on one of his researchers but still refusing to apologize for pursuing a legal strategy designed to intimidate or financially bleed a journalist (myself) into confirming a lie as the truth. [For more details, see a report in FAIR’s “Extra!,” November-December 1993.]


Emerson’s deep-seated biases are also better known today. He is now notorious for his Islamophobia, with his “investigative journalism” on the dangers from “radicalized” American Muslims underpinning the controversial hearings on the topic by Rep. Peter King, R-New York.

Emerson has boasted about his role in structuring King’s hearings, but also lashed out at King for not including him on the witness list. In a particularly bizarre letter written last January, Emerson vowed to withhold further assistance as retaliation for the snub.

"I was even going to bring in a special guest today and a VERY informed and connected source, who could have been very useful, possibly even critical to your hearing, but he too will not attend unless I do," Emerson wrote. “You have caved in to the demands of radical Islamists in removing me as a witness.”

In another weird twist, Emerson somehow envisioned himself as the victim of McCarthyism because he wasn’t being allowed to go before the House Homeland Security Committee and accuse large segments of the American-Muslim community of being un-American. [Politico, Jan. 19, 2011]

in the nearly two decades since The New Republic’s deceptive October Surprise debunking, the magazine also has revealed more about its commitment to quality “journalism,” through such debacles as the serial fraud of its correspondent Stephen Glass.

And, publisher Peretz has exposed more about his personal agenda. He now lives part time in Israel and -- like Emerson -- has taken to smearing Muslims, such as in this TNR blog post from last year regarding the proposed Islamic community center near Ground Zero in southern Manhattan. He declared:

“Frankly, Muslim life is cheap, most notably to Muslims. And among those Muslims led by the Imam Rauf [the promoter of the Islamic center] there is hardly one who has raised a fuss about the routine and random bloodshed that defines their brotherhood.

“So, yes, I wonder whether I need honor these people and pretend that they are worthy of the privileges of the First Amendment which I have in my gut the sense that they will abuse.” (Facing accusations of racism, Peretz later issued a half-hearted apology which reiterated that his reference to Muslim life being cheap was “a statement of fact, not opinion.”)

A New York Times magazine profile of Peretz, dated Jan. 30, noted that Peretz’s hostility toward Muslims was nothing new. “As early as 1988, Peretz was courting danger in The New Republic with disturbing Arab stereotypes not terribly different from his 2010 remarks,” wrote Stephen Rodrick.

The article also noted Peretz’s personal readiness to “happily carpet-bomb any opponent.”

Both tendencies were on display in The New Republic’s war on the October Surprise story.

Successful Counterattack

But the combined assault from Newsweek and The New Republic worked. After those articles, the House October Surprise task force sought mostly to debunk the allegations rather than seriously pursue them.

The powerful interests that could have come under fire were protected. Not only were Ronald Reagan and George H.W. Bush cleared of any wrongdoing but implicitly so were David Rockefeller, Henry Kissinger, various CIA officers who had been implicated by witnesses, and Israel’s Likud. [For details, see’s “The CIA/Likud Sinking of Jimmy Carter.”]

So, even as more evidence of a Republican-Iranian scheme – implicating CIA officers and Likud – surfaced in the past two decades the debunking narrative survived largely unscathed, much as the Contra-cocaine “conspiracy theory” narrative remains dominant despite the CIA’s admissions.

It didn’t even matter last year when the former House task force chairman, Lee Hamilton, revealed that a remarkable document – a Russian government report corroborating the October Surprise allegations – had been withheld from him. The report also was kept from other congressmen on the task force.

Nor did it matter when the task force’s chief counsel, Lawrence Barcella, told me that so much evidence of Republican guilt had poured in late in the investigation that he asked for a three-month extension to examine it but was told by Hamilton simply to wrap up the investigation with a finding of Republican innocence. [See’s “Key October Surprise Evidence Hidden.”]

One wonders why the American people distrust their government and why all kinds of kooky conspiracy theories get traction on the Internet?

In effect, the October Surprise/Iran-Contra storyline has been split into two contradictory narratives that coexist in the same confused space that is now American history, like the shifting diagrams maintained by the felt-hatted operatives in "The Adjustment Bureau."

One of these narratives – embraced by the U.S. political/media powers-that-be – holds that the October Surprise was a myth and that Iran-Contra was just a minor bump in the otherwise majestic Reagan presidency.

The other hews to the evidence and suggests that a serious crime was committed against American democracy and history itself.

[For more on these topics, see Robert Parry’s Lost History and Secrecy & Privilege, which are now available with Neck Deep, in a three-book set for the discount price of only $29. For details, click here.]

Robert Parry broke many of the Iran-Contra stories in the 1980s for the Associated Press and Newsweek. His latest book, Neck Deep: The Disastrous Presidency of George W. Bush, was written with two of his sons, Sam and Nat, and can be ordered at His two previous books, Secrecy & Privilege: The Rise of the Bush Dynasty from Watergate to Iraq and Lost History: Contras, Cocaine, the Press & 'Project Truth' are also available there.

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