Last June, McClatchy reporter Tom Lasseter described how an unwarranted stay at Guantánamo had transformed a common Afghan criminal named Mohammed Naim Farouq into a dangerous, America-hating terrorist.

Farouq had no proven ties to the Taliban or al-Qaida when he was captured by US troops in 2002, Lasseter wrote. But during a year of "abuse and humiliation" at Guantánamo, he met and befriended "high-level militants". By mid-2008, Lasseter reported, Farouq was a Taliban leader in eastern Afghanistan – radicalised by his experience, like a number of his compatriots.

Which brings us to the latest screw-up by the New York Times, committed on 21 May, eagerly pounced upon by former vice-president Dick Cheney later that morning, fingered as suspect by Talking Points Memo that afternoon and finally (and firmly) debunked by Times public editor Clark Hoyt this past Sunday.

That's the short version. Here's the slightly longer one. The 21 May story, by Elisabeth Bumiller, claimed that the Pentagon was preparing to release a study showing that 74 Guantánamo prisoners who had been freed – about one in seven – had "returned" to terrorism.

Bumiller's story came amid rising tensions over President Barack Obama's plans to close Guantánamo, and Cheney used the figure in his speech that day – the one he delivered as soon as the president had finished giving his own address on what to do with the remaining prisoners.

The Times' story was gleefully received by the conservative Weekly Standard, which had run a story back in March claiming the Pentagon study was being kept under wraps so as not to embarrass Obama.

Later that day, though, Justin Elliott wrote at TPM Muckraker, one of the Talking Points Memo sites, that Bumiller had popped up on MSNBC and said that perhaps "returned" was the wrong word. Noting the Times had dropped the suggestion of recidivism from its online version, Elliott wrote: "Bumiller and her editors seem to have realised the possibility that they might have gotten spun – though too late to change the front-page story in the print edition."

Five days later, Elliott got hold of the Pentagon study and found that though it described former prisoners as having "re-engaged" in terrorism, it provided no evidence to back that up. As best as Elliott could tell, the Pentagon's data showed a recidivism rate of 5% – one in 20, a far cry from one in seven. Others who had taken up terrorism upon being released from Guantánamo, the study showed, may never have engaged in terrorist acts before their imprisonment.

After a considerable amount of online goading, including a campaign by the media-watch group Fairness and Accuracy in Reporting, the Times ran an editors' note acknowledging the flaws last Friday.

Then, on Sunday, Hoyt weighed in, writing: "I think the difference between one in 20 and one in seven made it a much less compelling story that should have run inside, with stronger warnings that the Times had its doubts."

As described by Hoyt, it appears that a considerable amount of messy journalistic sausage-making went into Bumiller's story. Bumiller is described as having doubts about the study but being essentially overruled by her editors.

Yet it has to be said that Bumiller herself is something of a recidivist. In a March 2004 presidential debate among the Democratic contenders, Bumiller asked what may have been the dumbest question ever uttered in such a forum: "Really quick, is God on America's side?"

At the time, Bumiller's question seemed like a faint echo of the insanity that had fallen over much of the American media following the terrorist attacks of 9/11 – insanity that was practically defined by Bumiller's former colleague Judith Miller, whose credulous reporting on Saddam Hussein's non-existent weapons of mass destruction and terrorist ties helped set the stage for war and disaster.

This time, at least, it didn't take years for the Times to come to terms with how it had been manipulated. But there's something especially troubling about this particular mistake, because it turns the truth upside-down.

Bumiller's story played into the darkest fears promoted by Cheney and his fellow conservatives by making it appear that terrorists captured on the battlefield and sent to Guantánamo would resume their jihadist ways upon being released.

The far more disturbing truth, borne out by the Pentagon's own figures, is that we are creating terrorists at Guantánamo. What to do with those people is a horrendous dilemma for Obama. But it is not a dilemma of his making.

Issa Khan, a former Guantánamo prisoner, was interviewed by McClatchy's Tom Lasseter last year. His words stand as both a warning and a rebuke.

"A lot of our friends are working against the Americans now," he said. "Because if you torture someone without any reason, what do you expect?"