Government plans to buy off loyalists and the DUP with increased funding for working- class Protestant areas have hit an embarrassing snag.
The NIO wants to shower cash over the Orange masses to prove that it understands their concerns, recognises their fears and generally feels their pain. Money will be targeted at building up 'community infrastructure' and 'social capital', as agreed in separate discussions with the DUP and the UDA.
However, because it is illegal to allocate funding on a purely sectarian basis the department first has to prove that Protestant areas are uniquely disadvantaged. To accomplish this, last year it commissioned a piece of research whose frame of reference was carefully defined to focus on a perceived Protestant weakness specifically, that working-class Protestants are too demoralised and disorganised to compete for handouts against their sneaky Catholic neighbours. Unfortunately, this perception turns out to be totally wrong.
"Based on the survey results we conclude that there is no evidence of Catholic/Protestant differences in social capital," concluded the consultants Deloitte MCS Limited.
Worse still the report found that weak community infrastructure is mainly a feature of affluent suburbs, rendering ridiculous the whole concept of linking it to social deprivation.
Not surprisingly, this report was not made public.
Last October the Northern Ireland Council for Voluntary Action requested a copy and was stonewalled for almost a year.
The council's magazine, Scope, appealed to the Information Commissioner through the Freedom of Information Act and finally obtained the material in July along with associated documents.
These revealed near panic inside the Department of Social Development over the awkward findings.
A briefing paper written for the department's general management board, including its top civil servant Alan Shannon, warned of the "potential for controversy" if funding could not be targeted specifically at "loyalist communities".
Another briefing paper by a senior civil servant confirmed that the research was valid but the general management board rejected this, claiming that the report "didn't look right".
A working group was then set up within the Department of Social Development to re-examine the findings and 'validate DSD concerns'. But of course the real concerns being 'validated' are those of the DUP and the UDA, which insist that Protestant working-class areas are a special case of need regardless of all evidence to the contrary.
This is not the first time that the NIO has been caught fiddling the figures to flatter a sectarian political agenda.
In 2003 Stormont commissioned a report into religious bias in the labour market. Consultants DTZ Pieda concluded that Protestants and Catholics no longer face any discrimination when applying for jobs. In response the Northern Ireland Statistics and Research Agency refused to publish the findings for two years, only reluctantly releasing them this February following a Freedom of Information Act request by Ulster Unionist MLA Dermot Nesbitt.
Mr Nesbitt claimed the research had been concealed "as a concession to Sinn Féin" and it is difficult to see what other reason there could be for such strange secrecy. Sinn Féin is desperately fond of the fact that Catholics are more likely to be unemployed than Protestants but it will only attribute this to discrimination.
The simple economic geography of the various ethnic cantons into which Sinn Féin has corralled its supporters is never mentioned and apparently the NIO is not keen to mention it either.
Taken together these two instances of hiding good news in the name of bad politics leave the senior civil servants who really run Northern Ireland with serious questions to answer.
The peace process now operates by appeasing two extreme sectarian parties whose electoral appeal relies on exaggerating tribal division. That appeasement has clearly grown to include collaborating with the exaggerations themselves. Because it would undermine the DUP project to point out that Protestants aren't marginalised in the community and because it would undermine the Sinn Féin project to point out that Catholics aren't discriminated against in the workplace, the NIO chooses to play along and undermine society instead.
The cynicism required to pull this off is disgusting.
For loyalists, 'social capital' means that the local brigadier runs the youth centre.
For republicans, Catholic unemployment means fewer voters escaping to the suburbs where 'weak community infrastructure' might put them out of reach. For Stormont, a balanced approach means pandering equally to both sides as they contrive further grievances that everyone knows to be nonsense.
The price of moving the process forward has become the practice of moving Northern Ireland backwards.