The polling firm Gallup has agreed to pay $10.5 million to settle civil charges that the company had kept two sets of books in order to overbill federal agencies by millions of dollars. The Daily Caller and Fox News had previously floated a conspiracy theory suggesting that the lawsuit was related to supposed efforts by the Obama campaign to “subtly intimidate” the firm to compel them to produce polling results more favorable to Obama.

The Daily Caller had also helped to smear the whistleblower who first exposed Gallup's alleged practices, Michael Lindley, publishing a variety of unsubstantiated criticisms of Lindley from an unnamed “senior Gallup official.” Under the terms of the settlement, Lindley, who says he was fired in July 2009 after warning his superiors that he would go to the Justice Department if the company did not stop illegally overbilling the federal government on their contracts with the U.S. Mint and the State Department, will receive $1.9 million.

In a September 6, 2012, story, headlined “Justice Dept. Gallup lawsuit came after Axelrod criticized pollsters,” then-Daily Caller reporter Matthew Boyle wrote:

Internal emails between senior officials at The Gallup Organization, obtained by The Daily Caller, show senior Obama campaign adviser David Axelrod attempting to subtly intimidate the respected polling firm when its numbers were unfavorable to the president. After Gallup declined to change its polling methodology, Obama's Department of Justice hit it with an unrelated lawsuit that appears damning on its face.

Boyle summarized on Twitter:

The alleged “intimidation” cited in the emails Boyle highlighted were complaints among Gallup executives that Obama strategist David Axelrod had sent a tweet criticizing Gallup's “methodological problems” in its polling of the presidential race. In June, Gallup acknowledged that their methodology had indeed been flawed, leading the firm to consistently overestimate Mitt Romney's support.

As even conservative bloggers noted, Boyle's conspiracy theory made little sense: a single tweet from an Obama aide did not suggest Gallup's polling was a priority, there was little upside to trying to intimidate the firm, and the timeline showed that the Justice Department had been involved with the case for years before the tweet was issued.

Nonetheless, Fox quickly adopted Boyle's conspiratorial frame. In a September 7 segment on his Fox Business program, Stuart Varney fabricated direct contacts between Axelrod and the Gallup employees to claim that the Gallup executives “had felt threatened.” A few hours later on Fox News' America Live, guest anchor Shannon Bream said the Caller's story “suggests a conspiracy theory” between the filing of the DOJ lawsuit and Axelrod's “angry tweet.” Both guests, attorney Brian Claypool and GOP pollster Chris Wilson, agreed that there was a connection between the two events; Wilson said it was indicative of “Chicago-style politics” on the part of President Obama and called it “frightening,” while Claypool said the DOJ “needs to hire Houdini right now as a legal consultant” to “get them out of this mess.”

In fact, the DOJ's own lawyers were sufficient to convince Gallup to pay more than $10 million rather than risk continued legal action.