Copyright law?

Some folks are swooning over this photograph of Obama. 

De gustibus non disputandem est. But since there are lawyers persent, I’m very curious about this part of the caption:

This official White House photograph is being made available only for publication by news organizations and/or for personal use printing by the subject(s) of the photograph. The photograph may not be manipulated in any way and may not be used in commercial or political materials, advertisements, emails, products, promotions that in any way suggests approval or endorsement of the President, the First Family, or the White House.

If this is an official White House photo, doesn’t that mean it was produced by a government employee in the course of his official duties? And if that’s the case, isn’t it in the public domain, meaning I can do whatever the profane metaphor I want with it, including Photoshopping a mustache on Caroline Kennedy?

It does sound like I’m free to use it unaltered, since I’d never use it in a way that “suggests approval or endorsement of the President.”