1. CIA created black propaganda in USSR linking Soviets and international terrorists to foment dissent in Russia.
2. Somebody picked it up from outside and wrote a book about Soviet-terrorism links.
3. CIA director read the book, took it seriously, freaked out, lobbied for more powers.
4. CIA and NSA got more powers.
It's clearly not the first time in history that an intelligence organisation engineered a privilege escalation from fraudulent circumstances, but doing it by accident seems almost funny.
As retold by Adam Curtis in the excellent BBC three-parter "The Power of Nightmares":
3a. CIA people told new director, "er, boss, that was actually us".
3b. CIA director does not believe his own people.
And of course the whole "Team B" episode (Rumsfeld etc.), where the complete lack of evidence that the Soviets had <weapon-of-choice> was reinterpreted to mean they MUST OBVIOUSLY HAVE <even-worse-than-weapon-of-choice-even-if-physically-impossible> and perfect secrecy, otherwise how could we not have found any evidence?
Curtis wrote also wrote a great piece about the role incompetence played in the formation of intelligence agencies, titled "BUGGER: Maybe the Real State Secret Is That Spies Aren't Very Good At Their Jobs And Don't Know Very Much About the World".
Yep, that was also excellent. Some confirmation from the highest places:
Former German Chancellor Helmut Schmidt recounts that he never read the BND reports, because anything they wrote was tainted. He just asked other world leaders directly instead.
The Reagan era was so bizarre that even late-model le Carré can't do it justice. Claire Sterling's work (referenced in the article) was basically hackwork hearsay that came in via two key sources: a right-wing journalist closely linked to the Moonies, and a Tory speechwriter-turned-novelist who believes that he is in contact with Native American shamans via his dreams.
These are not, I should stress, the strangest people who held influence over the intelligence community in those days.
The official CIA judgement on the matter was more qualified, pointing out that the USSR supported "national insurgencies and some separatist-irredentist groups," but did not directly support terror groups (although they did support states like Libya that, in turn, supported and directed terror operations): "[T]he terrorist activities of these groups are not coordinated by the Soviets. The Soviets have on occasion privately characterized certain nihilistic terrorism as 'criminal,' and have urged other revolutionary groups to cease and desist from terrorist acts the Soviets considered 'self-defeating.'"
One certainly could point out that US support for groups like the Afghan mujahideen and the Pakistani government, the Central American Contras and their narco-trafficking allies, and right-wing "Gladio" networks in Europe would have, from the banks of the Moskva, looked a lot like US support for terrorism as well.
But CIA's considered analysis was basically ignored by senior political leadership, including CIA director Bill Casey, and a pervasive and almost hysterical suspicion of the Soviet leadership overshadowed US foreign policy for most of the 1980s, resulting in lost diplomatic opportunities and a few close calls with general war.
It all seems logical to me: if (3) and (4) didn't happen (because the CIA knew it was the source of the material in the book), then it would have sent a strong signal to the Soviets confirming that the CIA was behind the propaganda. That may have bought extra KGB attention to bear on in-country CIA assets responsible for spreading it. The corollary being that a CIA reaction of (3) and (4) further bolsters the apparent legitimacy of the propaganda.
And, of course, what spy agency wouldn't want (4)?
Lessons are here for groups outside intelligence as well: political, corporations, not-for-profits, universities, etc.
If you create enough propaganda, repeat it long enough, and put great effort in to suppressing the debunking of that propaganda eventually your own people will fall victim to that propaganda and believe that it is unquestionably true. At that point any remaining success is not the result of good decision making but of either randomness or some very dominant advantage over all other parties.
Politics is particularly sensitive to this weakness. While the original group of propaganda producers understand what the bullshit in the message is, and understand the actual purpose of the action being justified is, even the brightest outside of this group will struggle to figure it out.
Without naming names, you can watch politicians and political groups trip and choke on their own propaganda all of the time. The simple explanation stuff sounds farcical, while incredible complex propaganda can often only be identified by someone with a deep understanding on the topic. Sometimes it is more dangerous to the producing group than the intended target.
You just described the war on drugs. Generations of leaders who were brainwashed in grade school now perpetuate the exact same hysteria and junk science. Just goes to show how long-lasting this process can be.
Bingo, it applies to a wide range of areas. Sometimes it is better to exclude examples when explaining a concept and let people think about it for themselves a while.
1. CIA created black propaganda in USSR linking Soviets and international terrorists to foment dissent in Russia.
2. Somebody picked it up from outside and wrote a book about Soviet-terrorism links.
3. CIA director read the book, took it seriously, freaked out, lobbied for more powers.
4. CIA and NSA got more powers.
It's clearly not the first time in history that an intelligence organisation engineered a privilege escalation from fraudulent circumstances, but doing it by accident seems almost funny.