It had all the trappings of a classic Pentagon scandal: an Army report, mysteriously ordered destroyed; billions of dollars’ worth of military gear; fuming Congressmen; maligned generals; screaming headlines. But the Army has just concluded that this whole flap over competing intelligence systems was the result of a bureaucratic screw-up, not malicious wrongdoing.

Yes, that report was strangely squashed, writes Army Lt. Gen. William Grisoli in a review obtained by Danger Room. The move wasn't "attributable to anyone attempting to improperly advance" his own agenda, Troy says.

So, scandal over? Not quite, says one of the congressmen at the heart of the affair.

"The issue is by no means over," says Joe Kasper, the spokesman for Rep. Duncan Hunter.

The imbroglio centers around a system called Palantir, which teases out connections from giant mounds of data, and visualizes those links in ways that even knuckle-draggers can understand. With its slick interface and its ability to find hidden relationships, Palantir has attracted a cult of fanboys in the military and intelligence communities not unlike the one Apple has amassed in the consumer gadget world.

The problem is the Army already has a $2.3 billion system that does what Palantir is supposed to do – plus several dozen more things, besides. The DCGS-A ("Distributed Common Ground System – Army") is meant to be the one resource that Army intel analysts can use to find links between events, build dossiers on high-level targets, and plot out patterns in enemy attacks. Accessing 473 data sources for 75 million reports, it's supposed to be the primary source for mining intelligence and surveillance data on the battlefield — everything from informants' tips to satellites' images to militants' fingerprints.

But many in the military found DCGS-A too complicated, too hackable, and not nearly reliable enough. And the Palantir crowd, they just wouldn't quit pushing for their favorite software, even though Palantir was something of a roach motel of intelligence data – once inside, it was hard to export information to other systems.

So the military brass at the start of the year ordered the Army Test and Evaluation Command to make a so-called "Forward Operational Assessment" of Palantir. At the same time, the Army's Deputy Chief of Staff for Intelligence, or G-2, office began its own investigation.

On April 25, the Army Test and Evaluation Command rendered its decision. To paraphrase: Palantir is awesome and DCGS-A sucks. To quote: The Army should "install more Palantir servers in Afghanistan." (.pdf)

But less than a month later, the Army took it back. "Please ensure that any and all copies of the 25 April report are destroyed," (.pdf) read an e-mail from the command. The report was replaced with a nearly identical document (.pdf) – minus the recommendation to buy Palantir.

The replacement caused a stir when it was first reported by the Washington Times in July. "The Army's got their priorities wrong.... The bureaucracy is caught in a web of their own making, and in the end the war fighter is not getting what they need." Rep. Duncan Hunter told the paper in a story headlined In Anti-IED Software Case, Army's Buying Rules Trump Troops' Safety.

House Oversight Committee chiefs Rep. Darrell Issa and Rep. Jason Chaffetz warned of "possible manipulation" in a letter to Defense Secretary Leon Panetta (.pdf). "These actions could be construed as limiting positive feedback on Palantir's system, in an effort to justify the continued use of a more expensive and less effective program."

Meanwhile, often nasty internal Army documents began leaking to the press. They included an accusation by a DCGS defender that a top general (and Palantir fan) was a corporate stooge, submitting requests for the software that were "clearly ghost-written by a Palantir engineer."

The Army asked Lt. Gen. William Grisoli, the director of the Army's office of business transformation, to look into the matter. His 71-page report, submitted on Oct. 17 and obtained by Danger Room, says there was no cover-up and no favoritism – just a series of bureaucratic pratfalls. The G-2 and ATEC groups got in one another's way, he concludes. And ATEC screwed up by directly comparing DCGS-A to Palantir. That was outside of the group's charter. And besides, the two systems don't really do the same thing.

"I find that the changes made to the 25 April 2012 FOAR [Forward Operational Assessment Review] were not attributable to anyone attempting to improperly advance the Army's DCGS-A program of record but, rather, to the ATEC leadership's intent to ensure that the FOAR properly reflected the strengths and weaknesses of Palantir and that the recommendations in the report were in line with the report's purpose," he writes.

But for Hunter – the California Republican who has pushed the Palantir controversy harder than any Congressman on Capitol Hill – the matter's not settled. Even if the ATEC report wasn't purposely cooked, that still leaves the matter of the Army has been so slow to adopt Palantir. Just last year, for example, Special Operations Task Force 10 in Afghanistan requested a Palantir server; the Army turned them down, saying there were plenty of DCGS-A installations in their area.

Kasper, the spokesman for Hunter, tells Danger Room that "the Army's report in no way satisfies why the ATEC changed its findings, or why ground combat units were denied these critical capabilities." The fight over the Army's battlefield brain continues.