One muggy August day in 1983, five advertising executives entered the stately Old Executive Office Building next to the White House and walked to the security checkpoint where uniformed officers handed them temporary clearance badges. The executives were then led to a briefing room where a young military aide explained why the director of the Central Intelligence Agency, William J. Casey, had invited them to the National Security Council offices. Casey, the aide explained, wanted these ad men to devise tactics for selling the American people on the strategic threat posed by the leftist Sandinista government in Nicaragua and by Marxist rebels in El Salvador. After lunch, the executives met with Casey and in a brainstorming session more likely on Madison Avenue than Pennsylvania Avenue, the group sketched some ideas for pitching the Central American threat to the public.

The story of the PR campaign inspired by this meeting is one of the lesser known aspects of Iran-contra; it was overlooked again when the Reagan administration's biggest scandal crept back into the news in September to rehaunt George Bush with "what-did-he-know" questions. But in 1983, Casey set up a highly unusual propaganda machine that for three years ran "private" fundraising fronts, spread unseemly lies about the Sandinistas, and bullied journalists and editors, all in an effort to encourage the media and Congress to be more pro-contra. It didn't entirely work; most Americans never believed the contras were the God fearing boy scouts Reagan said they were any more than they thought the Sandinistas were the devil's diplomats. But it did influence the congressional debate and discourage reporting about the contras in the nation's press. Casey's campaign was also extraordinary because it helped shield a secret White House contra aid program that was explicitly against the law. And it was a flagrant violation of the historic and legal barrier against the CIA's interference in U.S. political debates.

Casey initiated the PR offensive because, by the summer of 1983, Congress was losing patience with the contras. Stories were seeping northward about atrocities perpetrated by undisciplined contra units sweeping through Nicaraguan villages like born-to be-wild motorcycle gangs. Unarmed captives were executed, women raped, and farming communities devastated. But Casey knew that to toss out the Sandinistas, the contras needed to grow into an effective fighting force. That would take time and money; he was running out of the former and Congress was about to get tight with the latter.

The most pressing concern of all for the Reagan administration was the need to win the support of the US people for its policies in Central America. "I think the most critical special operations mission we have today is to persuade the American people that the communists are out to get us. If we can win this war of ideas, we can win everywhere else," explained Michael Kelly, Deputy Assistant Secretary of the US Air Force. "Psychological operations, ranging from public affairs on the one end, through black propaganda on the other end is the advertising and marketing of our product."

Public affairs" is the government's term for "public relations"- a rather pointless change in terminology adopted to get around a law which specifically enjoins federal government agencies against engaging in public relations activities. The law also forbids the White House from using ads telegrams, letters, printed matter or other media outside "official channels" to influence members of Congress regarding legislation. Rules against CIA involvement in domestic US politics are even more severe. It is against the law for the CIA to operate domestically, except in narrowly-defined circumstances such as cooperating with an FBI investigation. In 1982 however, reports of the secret CIA war in Nicaragua led Congress to pass the Boland Amendment, ending military aid to the contras and barring the Reagan administration from any further attempts to overthrow the Sandinistas.

In response, Reagan dispatched CLA Director William Casey in January 1983 to set up a "public diplomacy' machine that journalists Robert Parry and Peter Kornbluh describe as "America's first peace time propaganda ministry . . . a set of domestic political operations comparable to what the CIA conducts against hostile forces abroad. Only this time they were turned against the three key institutions of American democracy: Congress, the press, and an informed electorate.... Employing the scientific methods of modern public relations and the war-tested techniques of psychological operations, the administration built an unprecedented bureaucracy in the [National Security Council] and the State Department designed to keep the news media in line and to restrict conflicting information from reaching the American public."

As head of the operation, Casey appointed Walter Raymond, Jr. a 20-year veteran of the CIA's clandestine overseas media operations-described by one US government source as the CIA's leading propaganda expert. According to Washington Post editor Ben Bradlee, Raymond's involvement in the campaign symbolized "the wholesale integration of intelligence and PR at the National Security Council." During the Iran/Contra scandal, Congress investigated the Reagan administration's domestic propaganda operations and found that Raymond's name appeared on Oliver North's calendar more than that of any other White House staff member or government employee. A chapter detailing these domestic activities was drafted for the investigating committee's Iran/Contra report, but House and Senate Republicans successfully blocked even a paragraph of the draft from being included in the committee's final report. As a result the CIA's domestic propaganda activities in violation of its charter have received almost no public scrutiny.

The congressional investigation into the Iran/Contra affair uncovered a domestic side to the Reagan administration’s efforts to circumvent the law in pursuing its foreign policy aims. The chapter dealing with this aspect of the scandal was deleted from the final public report at the insistence of House and Senate Republicans. According to anonymous sources on the staff of the investigative committee, the White House detailed a senior CIA propaganda expert to head up a covert domestic operation designed to manipulate congress and the American public. In 1982, William Casey assigned Walter Raymond to the NSC staff to set up a public diplomacy program. Raymond is a veteran of the CIA’s overseas media operations and has been described as the CIA’s leading propaganda expert. Raymond put together an Office of Public Diplomacy for Latin America and the Caribbean (S/LPD) in the State department, which took its orders from, among others, Oliver North and Elliott Abrams.

An (anonymous) NSC official who worked with North and Raymond told the authors that they were trying to manipulate US public opinion, using the tools of Walt Raymond’s trade craft which he learned from his career in the CIA covert operation shop. Another public diplomacy official characterized the effort as a vast psychological warfare operation.

The congressional investigation revealed that they: pressured journalists and news executives into giving a sympathetic portrayal of administration activities WRT Latin America, deployed secretly funded private sector surrogates to attack anti-contra legislators in TV and newspaper ads, funded non-profit political organizations to push the contra cause, used the FBI to mount intimidating investigations into groups opposed to Reagan’s policies in Central America, and manipulated ongoing criminal investigations to protect their domestic operation from exposure.

The original name for the Reagan-Bush administration's plan to mount its own propaganda campaign within the United States was "Project Truth." It later merged with a broader program that combined domestic and international propaganda under the umbrella of "Project Democracy." The central figure in the administration's media operations was Walter Raymond Jr., a 30-year veteran of the CIA's propaganda office who was assigned to the National Security Council staff in 1982.

President Reagan took the first formal step to create the propaganda bureaucracy on January 14, 1983, by signing National Security Decision Directive 77, entitled "Management of Public Diplomacy Relative to National Security." The secret directive deemed it "necessary to strengthen the organization, planning and coordination of the various aspects of public diplomacy of the United States Government." Reagan defined public diplomacy broadly as "those actions of the U.S. Government designed to generate support for our national security objectives."

To direct these "public diplomacy" campaigns, Reagan ordered the creation of a Special Planning Group - or SPG - within the National Security Council. "The SPG ... shall ensure that a wide-ranging program of effective initiatives is developed and implemented to support national security policy, objectives and decisions."

Reagan turned to Raymond to manage the public diplomacy operations at home and abroad. The veteran CIA propagandist was a slight, soft-spoken New Yorker who reminded some of a character from a John le Carre spy novel, an intelligence officer who "easily fades into the woodwork," according to one acquaintance. Associates said Raymond's CIA career stayed close to headquarters because of special care required for a sick child. Still, he rose to senior levels of the CIA's Directorate of Operations - the DO which is responsible for spying, paramilitary actions and propaganda - where his last job title was considered so revealing about the CIA's disinformation capabilities that it remained a highly classified secret.

Critics would later question the assignment of a career CIA propagandist to carry out an information program that had both domestic and foreign components. After all, in CIA propaganda operations, the goal is not to inform a target population, but rather to manipulate it. The trick is to achieve a specific intelligence objective, not foster a full-and-open democratic debate. In such cases, CIA tactics include disinformation to spread confusion or psychological operations to exploit cultural weaknesses. A skillful CIA operation will first carefully analyze what "themes" can work with a specific culture and then select - and if necessary distort - information that advances those "themes." The CIA also looks for media outlets to disseminate the propaganda. Some are created; others are compromised with bribes to editors, reporters or owners.