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http://simple.wikipedia.org/wiki/Plausible_deniability

Plausible deniability are words first used by the Central Intelligence Agency (CIA) during the Kennedy administration. In that case it meant not to tell senior government officials about illegal CIA activities. These officials could then defend themselves if the activities were discovered.[1] They would be able to say quite plausibly, and perhaps truthfully, that they did not know anything about it (deniablity). It meant that actions of the CIA could not be blamed on the President of the USA.[1]

The concept is tied up with the idea of a "paper trail", whereby journalists find evidence of orders or discussions between senior officials and agents doing the forbidden acts. Interceptions of phone messages or e-mail messages may also be evidence of wrongdoing by officials. If there is no definite evidence of wrongdoing by an official, then his/her denial can be taken as sincere. The denial is "plausible" (or, at least, might be true). That achieves one of the main goals of public relations: for officials at least not to be caught red-handed doing something illegal. The effect of officials being caught red-handed can be extremely serious: see Watergate scandal.

Plausible deniability refers to the denial of blame in (formal or informal) chains of command. Senior people may give indirect and vague orders. For example, Henry II "Who will rid me of this turbulent priest?" or even less direct "Someone should do something about that". The intended message is understood. Later, when the deed is done, the higher man can say "I never intended that to happen".

Plausible deniability is achieved when no records are kept of any instructions. It becomes impossible to find out who was responsible for the actions taken. If these activities become public, high-ranking officials may deny any knowledge of such act or any connection to the people used to carry out such acts. It usually means that it has been planned in advance, setting up the conditions to avoid responsibility for future actions or knowledge.