In late 2001, the US government realized that it was rapidly losing international support for its war on terrorism, particularly support in Islamic countries.

The US State Department, a civilian agency, typically had the role of public diplomacy and general PR for the United States. However, on February 19, 2002, the New York Times reported that a small but well-funded new office in the Pentagon had been created shortly after September 11, 2001, called the Office of Strategic Influence. They reported that "The Pentagon is developing plans to provide news items, possibly even false ones, to foreign media organizations as part of a new effort to influence public sentiment and policy makers in both friendly and unfriendly countries," according to their military officials. "As part of the effort to counter the statements of the Taliban, Osama bin Laden and their supporters, the State Department has already hired a former advertising executive to run its public diplomacy office, and the White House has created a public information "war room" to coordinate the administration's daily message domestically and abroad."

Various plans have emerged from this office, including planting news items with foreign media organizations and sending journalists, foreign and civic leaders e-mail messages that promote American views and/or criticize unfriendly governments. This would all appear to be from somewhere other than the government, like a .com instead of a .gov or .mil.

To help the new office, they hired the Rendon Group, run by a former aide to Jimmy Carter, paying them $100,000 a month for their work. The Pentagon hired them under a no-bid contract, as they were already experienced in overseas propaganda. The group claims to specialize in "assisting corporations, organizations, and governments achieve their policy objectives," and their past clients include the CIA, USAID, the Kuwaiti government, Monsanto Chemical Company, and the official trade agencies of countries including Bulgaria, Russia, and Uzbekistan, and the Iraqi National Congress (an exile group bent on ousting Saddam Hussein and headed by Ahmed Chalabi, a controversial guy who appears to have been playing both the US and Iran in an effort to trigger the war and become Iraq's next president). ABC reports that Rendon came up with the name for the INC itself. Their website brags that they have done business in more than 78 countries. Whatever they are doing is classified, however. The group is also well known for their past work, running propaganda campaigns in Arab countries, including one that denounced atrocities by Iraq during its 1990 invasion of Kuwait as well as creating public support for Operation Desert Storm, for which the Kuwaiti government paid $100,000 per month. John Rendon himself once confessed in a speech at the National Security Conference:

"If any of you either participated in the liberation of Kuwait City [after the first Gulf War]... or if you watched it on television, you would have seen hundreds of Kuwaitis waving small American flags, did you ever stop to wonder how the people of Kuwait City, after being held hostage for seven long and painful months, were able to get hand-held American flags? And for that matter, the flags of other coalition countries? Well, you now know the answer. That was one of my jobs."
This isn't new. There used to be an Office of Strategic Services which existed for several years until it was absorbed by the CIA. By law, the Pentagon and the CIA are barred from propaganda activities in the US, they can only work outside its borders. In the mid-1970's, it was disclosed that some CIA programs to plant false information in the foreign press had spilled over, resulting in articles published by the American media. Also, the US military airdropped leaflets in Iraq and Afghanistan to try and convince the public. CNN's translators said they heard shortwave radio messages, giving suggestions to one-time Taliban supporters that it was hopeless to continue fighting, and also giving explicit instructions on how to surrender. The Wall Street Journal attributes that to the "4th Psychological Operations (Psyops) group" which designed the leaflets and radio broadcasts in Afghanistan "to persuade enemy fighters to quit, and to convince civilians that U.S. bombs raining down on their country will result in a better future for their families." (their words, not mine)

This office, however is different from the Voice of America or the Radio Marti broadcasts in Cuba, which have been more objective. The mission of the OSI is to manipulate public opinion in other countries that will win their support of the US and its “war on terrorism.” The manipulation is at the core of the mission; the OSI intends to feed “disinformation” into the global population in ways that will lead the people of the world to obey and support America. “Disinformation” is a nice word for “falsehoods,” and when the government does it officially, the dictionary word is “propaganda.”

This Office has had many critics. There was some fallout from the Times' announcement of its existence. It definitely undermined the US administration's credibility, accusing it of hiring Joseph Goebbels to work for them. Disinformation planted in Reuters or AFP could make its way into American news, like the coup d'etat in Venezuela that failed, but was initially reported to have succeeded. Governments in other countries are upset over an effort like this, particularly ones that support the US. It was just profoundly undemocratic.

By fallout, I meant there was outrage. CNN picked up on the story, as did many other news organizations worldwide. People once again compared it to a Ministry of Truth in 1984-esque times. One blogger termed it "tactical lying." Within a week of the story breaking, the Pentagon closed down the Office, despite the fact that it was open and running for months, using money earmarked as "emergency funds" after September 11, 2001. The Pentagon told the Associated Press that all the negative publicity damaged the Office's reputation so badly “that it could not operate effectively." Days later, Donald Rumsfeld tried to distance himself from the organization, claiming that he had “never even seen the charter for the office.” The New York Times then reported that Thomas Timmes, the OSI’s assistant for operations, said that Rumsfeld had been briefed on its goals “at least twice” and had “given his general support” (New York Times, 2/25/02).

A few months later, after the whole thing blew over, Rumsfeld seems to have felt safe enough to own up in a Press Conference that the work of the OSI didn't end:

"And then there was the Office of Strategic Influence. You may recall that. And 'oh my goodness gracious isn't that terrible, Henny Penny the sky is going to fall.' I went down that next day and said fine, if you want to savage this thing fine I'll give you the corpse. There's the name. You can have the name, but I'm gonna keep doing every single thing that needs to be done and I have."
As Rumsfeld himself all but admitted, nobody got fired; the description of what they did simply changed slightly. The office itself was located adjacent to the Office of Special Plans at the Pentagon, the office that managed the Iraq war buildup and postwar scenarios (and botched it up by many accounts). The Pentagon's Defense Policy Board, a neoconservative HQ staffed with Richard Perle, Gingrich, Woolsey, et al., was located one floor directly below the OSI. This could mean something.

In October, 2003, a number of identical letters appeared in scattered local newspapers supporting the war on Iraq, with signatures of different soldiers. When the newspapers called these soldiers back, they claimed they had never signed the letters. The letters turned out to be identical fakes, an apparent attempt to show some sort of grassroots support for the war. Accusations have been made that the Bush administration perpetrated the act, or perhaps some part of the OSI.

In a slightly more blatant vein, the Office of Strategic Communication, also known as "Stratcom" made the news, or should I say "makes" the news. An April 4, 2004 Associated press report described the US-Led coalition's press office, where "Republican Party operatives lead a team of Americans promoting mostly good news about Iraq. Dan Senor, a former press secretary for Spencer Abraham, now the Energy Secretary, heads the office packed with former Bush campaign workers, political appointees and ex-Capitol Hill staff members. A third of the U.S. civilian workers in the press office have GOP ties, running an enterprise that critics see as an outpost of Bush's re-election effort. ..." one of Stratcom's main goals "is to ensure Americans see the positive side of the Bush administration's invasion, occupation and reconstruction of Iraq, where 600 Americans have died already and a deadly insurgency thrives. 'Beautification Plan for Baghdad Ready to Begin,' one news release in late March said in its headline. Another statement cautioned 'The Reality Is Nothing Like What You See on Television.'" They also have ties to the US-funded Al Hurra and Al-Iraqiyah television stations.

Also, in January 2003, George W. Bush used his executive power to create an "Office of Global Communications" which, in his words, "disseminating truthful, accurate, and effective messages about the United States, its Government and policies, and the American people and culture." Whether this office is tied into the above efforts is unclear to me at this time.

Sources:
http://freerepublic.com/focus/fr/631175/posts
http://www.fair.org/press-releases/osi-followup.html
http://www.dod.gov/news/Nov2002/t11212002_t1118sd2.html
http://www.cnn.com/2002/US/02/19/gen.strategic.influence/
http://www.fas.org/sgp/news/2002/02/dod022602.html
http://www.workingforchange.com/article.cfm?ItemID=16754
http://www.guardian.co.uk/worldlatest/story/0,1280,-3940735,00.html
http://news.bbc.co.uk/2/hi/americas/1830500.stm
http://www.thismodernworld.com/weblog/mtarchives/week_2004_05_23.html#001558
http://www.prwatch.org/prwissues/2001Q4/rendon.html
http://www.whitehouse.gov/news/releases/2003/01/20030121-3.html