Did Green and her crew see the lake's legendary lake monster, the Pend Oreille Paddler? Or a giant sturgeon? Or something quite different, a manmade secret that the U.S. military has guarded since World War II?

In this picture-postcard lake, twice as deep as Scotland's Loch Ness, the U.S. Navy has developed and tested the latest in submarine technology for the past 50 years--almost exactly as long as reports of the Pend Oreille Paddler have been surfacing. Until recently, the Navy kept its activities on the lake strictly under wraps, a policy that no doubt contributed to the deep suspicion with which the local residents regard the Navy base.

At first glance, the Case of the Pend Oreille Paddler looks open and shut: People are mistaking high-tech submarines for a lake monster. But it's a bit more complicated than that. Among the wild rumors that circulate around Lake Pend Oreille--including allegations that the Navy tests nuclear-powered subs there and launches torpedoes and Polaris-type missiles from the lake's depths--is one that bears closer examination. It contends that, over the years, the Navy deliberately fostered reports of the Paddler--and perhaps even "created" the Paddler in the first place--in order to cover up its top-secret doings at the lake.

Various groups have accused the government of using the public's growing belief in the paranormal as a handy tool when it wants to cover up questionable activities. There's substantive evidence, as revealed in the September 1993 issue of Omni, for instance, to support the notion that the Air Force spread the story of a crashed UFO in Western Pennsylvania in December of 1965. The goal: shielding its recovery of Kosmos-96, a failed Soviet probe. Now, the government is under siege from organizations that fervently believe it's using paranormal techniques in warfare and hiding remains of aliens and UFOs. If it willfully used paranormal cover stories like the Pend Oreille lake monster, then blame for these groups' beliefs, the public's distrust of the government, and the growth of pseudoscience falls squarely in its lap.

History shows that the U.S. military is no stranger to nonparanormal cover stories. For example, when U.S. Army planes sprayed live bacteria over North American cities during the 1950s and 1960s in mock biological-warfare attacks, the Army insisted it was merely testing radar-deflecting chaff. And the military still uses the ploy: In 1992, the Federation of American Scientists obtained a draft of a security manual that authorized the use of cover stories by government agencies and contractors involved with classified programs, specifying only that the stories "must be believable." But with belief in such paranormal phenomena as UFOs and Bigfoot skryocketing over the past few decades, the line between believable and preposterous has gotten pretty blurry, a development that the military has likely been tempted to exploit for its own purposes.

Would the Navy 'fess up to such exploitation in encouraging belief in the Paddler? Was there, in fact, any truth to the cover-story hypothesis? Intrigued, I went to Lake Pend Oreille and talked with witnesses, amateur historians, and Navy scientists in an effort to find the truth behind the Lake Oreille Paddler.