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Michael Kranish, the Boston Globe reporter who co-wrote the paper's comprehensive biography of Kerry, described this story as a moment that changed Kerry's life:

KRANISH: Sean, I don't know if it's — that's a question that obviously some of the critics will raise. And I think what's fair to look at is how he was affected by Vietnam. He himself would say that you really have to look at a lot of his thought process as what was happening during Vietnam. And in one short anecdote I'll tell you, that in Christmas of 1968, he was on a small boat with his men, basically in Cambodia at a time when Richard Nixon was telling the American public that we're not in Cambodia. And he basically became skeptical. Well, the government is saying this, but he knew himself that wasn't true. And it's also why he says he came back to protest the war that he had served in.
HANNITY: Well, Michael...
KRANISH: So, from his perspective, and he's trying to — I think what he would say a little bit — I can't speak for him obviously — is that, you know, you look at a situation, very traumatic and sometimes you change your mind.
And clearly in Vietnam, when he volunteered, he served, came back to lead the protest.

This is not just some random anecdote. When Kerry has told this tale in the past, he has portrayed it as a decisive moment in his life. Were this a Hollywood movie, the music would swell over the explosions from the South Vietnamese and Kerry would look down, clench his jaw, ball his hands into fists, and then gaze up at the horizon, having learned a painful lesson and resolved to change the mixed-up world he has found himself in. On the Senate floor, he even repeated the word "seared" to demonstrate how clear and important that memory is.

But, it now appears, he wasn't in Cambodia. Which is, pretty much, the point of the story — not just that the South Vietnamese were a bunch of drunks and dangerous to be around on Christmas. The U.S. government wasn't being duplicitous. The president wasn't lying about him (partially because President Nixon wasn't going to be sworn into office for another month). In fact, one could conclude that it was Kerry in the intervening years who was duplicitous.