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Black propaganda has other intelligence applications as well, and is often used to recruit informants, and create deserters and defectors.
In his autobiography Soldier, Anthony Herbert told how he reported for duty in 1965 in Saigon at the joint CIA-military Specials Operations Group. The spooks asked him to join a secret psywar program. What they wanted me to do was to take charge of execution teams that wiped out entire families and tried to make it look as though the VC themselves had done the killing. The rationale was that other Vietnamese would see that the VC had killed another VC and would be frightened away from becoming VC themselves. Of course, the villagers would then be inclined to some sort of allegiance to our side.
As counter-terror guru David Galula explained, Pseudo insurgents are a way to get intelligence and sow suspicion at the same time between the real guerrillas and the population.
In a similar case in 1964, a famous CIA propaganda officer organized three armed survey teams which operated in neighboring hamlets simultaneously. When Vietcong propaganda teams departed from a hamlet, his cut-throat cadre would move in and speak to one person from each household, so the VC would...
http://www.counterpunch.org/2013/09/16/the-cia-the-press-and-black-propaganda/