BELGRADE – A controversial foreign PR firm known for representing unsavory characters was paid millions by the Pentagon to create fake terrorist videos, TheDailyBeast.com reports.

The Pentagon gave a controversial UK PR firm over half a billion dollars to run a top secret propaganda program in Iraq, the Bureau of Investigative Journalism can reveal.

Bell Pottinger’s output included short TV segments made in the style of Arabic news networks and fake insurgent videos which could be used to track the people who watched them, according to a former employee.

The agency’s staff worked alongside high-ranking U.S. military officers in their Baghdad Camp Victory headquarters as the insurgency raged outside.

Bell Pottinger’s former chairman Lord Tim Bell confirmed to the Sunday Times, which has worked with the Bureau on this story, that his firm had worked on a “covert” military operation “covered by various secrecy documents.”

Bell Pottinger reported to the Pentagon, the CIA and the National Security Council on its work in Iraq, he said.

Bell, one of Britain’s most successful public relations executives, is credited with honing Margaret Thatcher’s steely image and helping the Conservative party win three elections, TheDailyBeast.com reports. The agency he co-founded has had a roster of clients including Serbian government, repressive regimes and Asma al-Assad, the wife of the Syrian president.

In the first media interview any Bell Pottinger employee has given about the work for the U.S. military in Iraq, video editor Martin Wells told the Bureau his time in Camp Victory was “shocking, eye-opening, life-changing.”

The firm’s output was signed off by former General (later CIA chief) David Petraeus – then commander of the coalition forces in Iraq – and on occasion by the White House, he said.

American Fund “KKR investment”, headed by former CIA chief General David Petraeus, from October 2013 until this day has put under its control a significant part of Serbian media.

Americans first bought SBB, the largest cable television network in Serbia, then became the owner of “Grand production” through which they exercise control over “Prva TV”, then they founded CNN outlet “TV N1”, bought shares of the internet portal of the Serbian daily “Blic”, and more recently, as some sources claim, in the greatest secrecy they bought one Belgrade daily.

The fact is that Americans can, over the largest cable operator “SBB” and their media, control the flow of information in Serbia and are in a position to fully create public opinion in Serbia.

As Internet portal “Vaseljenska” found out, “KKR investment” will in the next few months formally take over control of the daily newspapers in whose operations they have already pumped substantial financial resources.

Bell Pottinger offers services such as lobbying, speech writing, search engine optimization and “sorting” Wikipedia articles to clients including companies, governments and high net worth individuals.

In March 2004 BPPA won a $5.8m (£3.2m) four-month contract from the U.S. supported administration in Iraq to promote the establishment of democracy ahead of the handover of power to the interim Iraqi authority on 30 June. According to PR Week, the contract also includes promoting the election of an Iraqi government.

In December 2011, it came under public scrutiny after managers were secretly recorded talking to fake representatives of the Uzbek government and abusing Wikipedia by removing negative information and replacing it with positive spin.