The old gray lady has some explaining to do.

Officials at the New York Times have admitted a liberal activist group was permitted to pay half the rate it should have for a provocative ad condemning U.S. Iraq commander Gen. David Petraeus.

The MoveOn ad, which cast Petraeus as “General Betray Us” and attacked his truthfulness, ran on the same day the commander made a highly anticipated appearance before Congress.

But since the liberal group paid the standby rate of $64,575 for the full-page ad, it should not have been guaranteed to run on Sept. 10, the day Petraeus warned Congress against a rapid withdrawal of troops from Iraq, Times personnel said.

“We made a mistake,” Catherine Mathis, vice president of corporate communications for The Times, told the newspaper’s public editor.

Mathis said an advertising representative left the liberal group with the understanding that the ad would run that Monday even though they had been charged the standby rate.

The group should have paid $142,083 to ensure placement that day.

This also leaves some of those who defended the Times’ discounted rate by claiming that the critics didn’t understand the ad business in an awkward position.

UPDATE: Heh: “No full explanation, but a sober assessment of the available information would suggest that the dog ate NYT’s homework.”

ANOTHER UPDATE: More here: “Terrible. Embarrassing, too, now that we know it. What else is there that we don’t know. Could Hoyt look into that?” And, from the comments: ‘ To those who said this was a fake controversy (ahem), it is a surprise that it isn’t. To those who at least suspect it was, it is a surprise they came clean about it.”