A senior executive with the network confirmed Thursday that Peter Arnett, a Pulitzer-Prize winning journalist and perhaps the network's most prominent correspondent, had been reprimanded for his work on the story.
April Oliver and her colleague Jack Smith, the producers who had led the eight-month reporting effort, refused to resign and were fired. Pamela Hill, the executive producer, and who made the basic decision to broadcast the report, resigned.
The most-cited source, Admiral Thomas Moorer, who was chairman of the Joint Chiefs of Staff from mid-1970 to mid-1974, is 87 and lives in an assisted-care retirement home in Maryland.
Here is the text of the statement which CNN is broadcasting:
"Nothing is more important to a news organization than its reputation for accuracy, fairness and responsibility.
"Building and maintaining high standards of journalistic excellence have been critical to the success of CNN since its launch 18 years ago.
"As chairman of the CNN News Group, I am responsible for assuring our staff and viewers that we get the story right.
"CNN NewsStand's recent coverage of Operation Tailwind, a covert action conducted by U.S. servicemen in Laos more than 28 years ago, reported that a deadly nerve gas was used and that American defectors were a primary target of the military action.
"The original report came to us from personnel involved in the Tailwind Operation and was supported by individuals who were in a position to know about the operation.
"Since the first NewsStand Tailwind broadcast, hundreds of veterans and other former government officials have denied the reports.
"As a result, CNN commissioned an independent investigation of NewsStand's reporting on Operation Tailwind, led by a highly respected outside media attorney, Floyd Abrams.
"The report concludes that NewsStand's broadcast on Operation Tailwind cannot be supported.
"There is insufficient evidence that sarin or any other deadly gas was used.
"Furthermore, CNN can not confirm that American defectors were targeted or at the camp as NewsStand reported.
"CNN alone bears responsibility for both the television reports and for the printed article in the June 15 issue of Time magazine.
"We acknowledge serious faults in the use of sources who provided NewsStand with the original reports and therefore retract the Tailwind story.
"We apologize to our viewers and to our colleagues at Time for this mistake.
"CNN owes a special apology to the personnel involved in Operation Tailwind, both the soldiers on the ground and the U.S. Air Force pilots and U.S. Marine Corps helicopter pilots who were involved in this action.
"CNN's system of journalistic checks and balances, which has served CNN exceptionally well in the past, failed in this case.
"The fault lies with the editors, producers and reporters and executives responsible for the report, the program and its contents.
"We are taking vigorous steps to strengthen our internal procedures to assure that mistakes of this type do not occur in the future."
WASHINGTON (CNN) -- The United States used lethal nerve gas during a mission to kill American defectors in Laos during the Vietnam War in 1970, according to the results of an eight-month investigation broadcast Sunday on the premiere of "NewsStand: CNN & Time."
The report was based on interviews with 200 people, including dozens who fought or flew on the mission, called Operation Tailwind.
Retired Adm. Thomas Moorer, a Vietnam-era chief of naval operations and former chairman of the Joint Chiefs of Staff, told CNN that the Nixon White House's national security team had to approve use of the nerve gas, and that the CIA had partial responsibility for Operation Tailwind.
Then 1st Lt. Robert Van Buskirk
At the time, Nixon had pledged the United States to a policy of "no first use" of nerve gas. The American government had also signed a treaty restricting chemical weaponry, though the Senate had not ratified it.
In a companion story to the "NewsStand" report appearing in the latest issue of Time magazine, a Pentagon official said the Army "has found no documentary evidence to support CNN's claims that nerve gas of any type was used on Operation Tailwind."
"NewsStand's" investigation reveals that on September 11, 1970, a "hatchet force" of 16 U.S. soldiers and approximately 140 Montagnard mercenaries helicoptered 60 miles deep into Laos from a Vietnamese base, Dak To.
The Montagnard are a group indigenous to the central mountains of Vietnam.
These soldiers were part of SOG -- the Studies and Observations Group -- a small, elite unit of the U.S. Special Forces.
SOG commandos carried out "black operations" against unusual targets, using unusual weapons. On Operation Tailwind, officers were briefed that anything in the non-nuclear U.S. arsenal would be available to them. That arsenal included a weapon known as "sleeping gas."
According to military officials with knowledge of the operation, that "sleeping gas" was, in fact, a nerve gas known as sarin -- the same gas that was used in the attack on a subway in Tokyo on March 20, 1995. The military name for the nerve gas was GB.
Tailwind's commander, U.S. Army Capt. Eugene McCarley, told CNN that he equipped all his men with M-17 gas masks -- masks that are designed to protect against nerve gas. The men also carried atropine, a nerve gas antidote.
A few days before the hatchet force was deployed, a reconnaissance team had been scouting the area in Laos, looking for defectors. Jay Graves, a reconnaissance team leader, saw what he called "roundeyes," meaning Caucasians, in a village base camp. He radioed the sighting back to his superiors. Graves was told to stay hidden and wait.
Jim Cathey, who was a U.S. Air Force non-commissioned officer in charge of resupply for the SOG commandos, also was in the area before the hatchet force team dropped in. He spent five hours closely observing the village base camp. Like Graves, he spotted what he believes were Americans in that village base camp.
"I believe that there were American defectors in that group of people in that village, because there was ... no sign of any kind of restraint," he said.
From the time the SOG commandos were put on the ground, they were in constant firefights. By the third day, more than half the commandos were wounded and getting low on ammunition.
According to military officials, during the evening, American planes gassed the camp with deadly sarin, using a special weapon, CBU-15, a cluster bomb unit designed to drop the nerve gas.
The next morning, the hatchet force attacked the camp, killing more than 100 people, according to McCarley and other Tailwind veterans.
1st Lt. Robert Van Buskirk, a platoon leader, spotted two Caucasians. They ran from him and slid into a spider hole. Convinced they were defectors, Van Buskirk threw a white phosphorous grenade down the hole. Van Buskirk believes he killed both of the men.
"It was pretty well understood that if you came across a defector, and could prove it to yourself beyond a reasonable doubt, do it, under any circumstance, kill them," Van Buskirk said. "It wasn't about bringing them back. It was to kill them."
The commandos, firing automatic weapons and tossing grenades, wiped out the camp in approximately 10 minutes.
John Singlaub, a former SOG commander, told "NewsStand" that it could be more important to the survival of U.S. troops to kill defectors than enemy soldiers because the defectors' knowledge of communications and tactics "can be damaging."
Montagnard fighters reported to their U.S. superiors that there were bodies of people who "look like Americans" dead in the village's huts. Van Buskirk and other SOG commandos say no bodies were identified and no bodies were brought out.
Several former senior military officials confirmed to CNN that eliminating defectors was Tailwind's objective, but McCarley denies that was the mission's purpose.
"We weren't looking for any village," he said. "We stumbled upon it by accident."
After the camp was overrun, the hatchet force prepared to evacuate. But enemy troops were gathering on a ridge line with anti-aircraft guns. Desperate, the SOG commandos called for gas and put on their gas masks.
Two A-1 Skyraider planes dropped the special sarin-filled weapon CBU-15 on the enemy positions.
The effect of the gas was immediate. Tailwind veterans describe enemy troops convulsing and throwing up. "I don't think too many of them got up and walked away," said Tailwind veteran Michael Hagen.
Many of the American and Montagnard commandos had lost or damaged their masks during the four days of fighting. They describe mucus coming from their membranes, vomiting and convulsing -- all classic signs of nerve gas exposure.
But the SOG force got a milder dose because the down draft from the helicopters coming to rescue them dispersed the gas. All 16 Americans, though wounded, survived the operation.