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In a blistering report, the investigators, from the Government Accountability Office, said the administration had disseminated "covert propaganda" in the United States, in violation of a statutory ban.
The contract with Mr. Williams and the general contours of the public relations campaign had been known for months. The report Friday provided the first definitive ruling on the legality of the activities.
But the accountability office said on Friday: "The failure of an agency to identify itself as the source of a prepackaged news story misleads the viewing public by encouraging the audience to believe that the broadcasting news organization developed the information. The prepackaged news stories are purposefully designed to be indistinguishable from news segments broadcast to the public. When the television viewing public does not know that the stories they watched on television news programs about the government were in fact prepared by the government, the stories are, in this sense, no longer purely factual. The essential fact of attribution is missing."
Congress tried to clarify the ban on "covert propaganda" in a bill signed by Mr. Bush in May. The law says that no federal money may be used to produce or distribute a news story unless the government's role is openly acknowledged.