AN American public relations firm at the centre of a row about planting propaganda in Iraqi newspapers is run by a dapper, upwardly mobile young British entrepreneur with a taste for fine parties and friends in high places.

Lincoln Group, which has a $6m (£3.4m) contract with the Pentagon to help with the information war in Iraq, was co-founded by Christian Bailey, 30, who grew up in Surrey and was educated at Lincoln College, Oxford.

The Washington-based company has reportedly been translating rosy articles written by the US military and passing them off as independent news stories by Iraqi journalists, some of whom allegedly paid newspapers to run them.

President George W Bush was said by his White House national security adviser last week to be “very troubled” by the news at a time when America is trying to encourage free institutions, including an independent media, in Iraq.

Bailey said this weekend that he had no regrets. “We have handled ourselves very appropriately. The confidence and trust of our clients is much more important to us than the temporary press flap.”

The baby-faced Bailey has a reputation as a socialite with ties to young Republicans. He left Britain in 1999 to try his luck as a dotcom entrepreneur in California before heading to New York and then Washington.

In New York, Bailey quickly became known as a charming host. A friend said: “He was a very popular boy because he would always have fun people and beautiful, intelligent girls around. He was always very fashion-conscious.”

In 2003 Bailey was treasurer of The Oxonian Society in New York, a club for anglophiles, where the former prime minister John Major was recently guest of honour. Bailey is a licensed helicopter and aircraft pilot, who has hired planes and flown guests to elegant picnics on the beach.

He was tempted to leave New York, where he worked for a hedge fund, after being drawn to Washington’s social scene by a friend, Jennifer 8 (sic) Lee, 29, described by one newspaper as the latest “hostess with the mostest”.

Bailey said he was “not at all” interested in politics at university. “I was entrepreneurial,” he said. He founded two companies and sold them both before graduating with a degree in economics and management.

In America, he linked up with fashionable young Republicans and became a co-chair of Lead 21, an organisation linking business and politics, which he once described as “the big supporters, the big donors to the Republican party in five years’ time”.

Public relations firms with warfare information experience — some of which have come under uncomfortable scrutiny themselves — were amazed when Bailey’s fledgling firm leap-frogged over theirs to win huge defence department deals.

The potential sums involved are staggering. In June this year the Pentagon awarded Lincoln Group an “indefinite delivery, indefinite quantity” contract worth up to $100m (£57m) over five years to give media support to the military’s “joint psychological operations”, commonly known as psyops.

The company’s willingness to work outside the fortified Green Zone in Baghdad helped it to land the lucrative deals. Bailey said the American military was impressed by Lincoln Group’s relations with Iraqis in the war-torn Anbar province last year and after that their work “expanded dramatically”.

The money spent by the Pentagon on psyops has flowed freely since the September 11, 2001 attacks. Concerned about the battle for public opinion over the Iraq war, a defence department advisory panel last year recommended greater use of the private sector because of its “built-in agility, credibility and even deniability”.

Iraqex, a subsidiary of Lincoln Group, boasted in an online recruitment advertisement that it was working on the “PR challenge of the decade: how to alter Iraqis’ perception of the coalition forces”.

It added that it had “select relationships” with the Bush administration, Congress and the state department, and had worked with “over 300 Iraqi journalists” through its “thriving network of offices” across Iraq.

Bailey himself is described on Lincoln Group’s website as executive vice-president with responsibility for investments in steel processing plants near Basra, property in Baghdad and brick factories near Erbil in the country’s northeast, as well as “information gathering and analysis and outreach through PR, advertising and strategic communications”.

“My background is financial,” Bailey said. “There are others in the group with decades more experience than me who run that side of the business.”

He may face questions by Congress in the new year about his firm’s role in Iraq. Republican congressman Walter Jones, a member of the armed services committee, said: “When a company is getting contracts of $50-$100m, the taxpayer has a right to know what they are doing for the money.”

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