It looks like Paul Krugman's "gotcha" of Army Secretary Thomas White may have been fabricated. (Thanks to Henry Hanks for the heads-up.)

In an article published in the New York Times on Sept. 17, Krugman quoted from an e-mail allegedly sent by White, then an Enron executive, where he urged an underling to "Close a bigger deal. Hide the loss before the 1Q."

Krugman received this document from a freelance writer for Salon a left-leaning Internet magazine.

As Andrew Sullivan points out today (scroll down to the third item for Oct. 2 -- why doesn't Andrew set his blog up so we can link directly to the post in question?), Salon is now retracting the entire article for numerous reasons, not limited to failure to confirm the validity of the smoking gun e-mail and several instances of plagiarism.

National Review Online also weighs in on the controversy.

Now that Salon has backed away from the e-mail story, Krugman's allegations seem completely baseless.

Of course, Thomas White has been saying that all along. After Krugman's column was published, White wrote a letter to the Times saying of the critical e-mail, "I am not aware of the document in question, nor to the best of my knowledge has Mr. Leopold contacted me to validate his interpretation. For the record, I do not recall saying or writing anything close to the quote attributed to me."

When he wrote those words, White could not have known that Salon was about to begin its retreat from the Leopold story. Now Salon has removed the piece from its website. The question is: What will Paul Krugman do?

I pointed out at the time that Krugman wrote his piece that it sounded fishy. Why? Because if White knew that the fraudulent accounting was going on, why did he wait so long to liquidate his Enron shares as required by the government ethics office. White isn't a stupid man, if he knew what was going on, he'd have sold those things as quickly as possible -- before the stock price started to drop.

NRO asks the key question, how will Krugman respond? We don't have long to wait. Krugman's next scheduled column is due out Friday.

*UPDATE* The author of the original Salon article, Jason Leopold, has written a letter to Andrew Sullivan. Leopold is claiming that Salon caved to pressure -- I doubt it. Whether left- or right-wing, journalists don't back down when they know they've got the truth on their side. If Salon was sure of the authenticity of the e-mail, they wouldn't be backing down.