A controversial U.S. military propaganda program used in the Iraq war was legal, a Pentagon investigation has found. The Defense Department inspector general’s report said laws on psychological operations were followed when the military planted and paid for favorable stories in Iraqi newspapers, defense officials said Thursday. The report has been completed, but not yet released. “Based on the available information … the report found that (commanders in Iraq) complied with applicable psychological operations laws and regulations in their use of a contractor to conduct psy-ops and their use of newspapers as a way to disseminate information,” said Col. Gary L. Keck, a Pentagon spokesman. The inspector general looked at three contracts awarded to the Washington-based Lincoln Group. The report was forwarded to Sen. Edward M. Kennedy, D-Mass., who had asked for the review, another official said. Kennedy was not immediately available for comment.