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THE SITUATION ROOM

Scooter Libby Indicted on Perjury Charges; Differing Opinions Are Voiced on the Investigation

Aired October 28, 2005 - 16:00   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.


(PRIOR HOUR SENT AS BREAKING NEWS)
BLITZER: Welcome back to our continuing coverage here in THE SITUATION ROOM.

Let's get some immediate analysis and reaction from a key member of the U.S. Congress.

Jane Harman is a Democrat from California. She is the ranking member of the House Intelligence Committee.

Congresswoman Harman, thanks very much for joining us.

REP. JANE HARMAN (D), CALIFORNIA: Thank you, Wolf.

BLITZER: Do you know, as the ranking member of the House Intelligence Committee, how much damage, if any, was done to national security as the result of Valerie Plame Wilson's name being made public?

HARMAN: We won't know the precise answer to that until the prosecution's over.

There's something called the After Action Report, which will be done then, which will tell us what damage was done by outing Valerie Plame. She was undercover. Before she returned to Washington, worked abroad in various capacities undercover.

She associated with other people. And, once her name is known, we can assume that foreign intelligence agencies and others have not only understood what she did, but associated her with others. And those others could be at grave risk now for all we know.

BLITZER: But you have you not been briefed by the CIA on any of this? Is that what you're saying?

HARMAN: Well, when he have been briefed on the scope of this, not the scope of the investigation, but we understand what the laws that are -- that apply. And we've been told just what I told you, that we can't be briefed on the specific --

BLITZER: But, have they themselves done an internal review? A postmortem to make sure if there are other officers, clandestine officers out who may be in danger by all of this?

HARMAN: Absolutely. BLITZER: They've cleaned it up? They've resolved it?

HARMAN: They've pulled together to protect her as much as possible. She still works at the agency, but she will never again work as an undercover agent. That will be impossible. There's damage to one career right there.

BLITZER: Because it's very important that we know, and I assume you're anxious to know if, in fact, lives were lost, how much, how many agents may have been compromised as a result of her name being made public.

HARMAN: That's right, Wolf.

BLITZER: But, you can't answer those questions.

HARMAN: No, I can't answer those questions. But, I do know that the CIA immediately did damage control.

When I'm telling you is we won't know the extent of damage until this is all over. But I think what happened today, while a personal tragedy for Scooter Libby, no question, and a political issue for this White House, is something that should send a positive signal to the men and women who work in our intelligence community.

That signal is that our government is going to prosecute people who intentionally leak classified information.

BLITZER: What do you think of the indictment against Scooter Libby today?

HARMAN: Well, I mean, this is a very careful lawyer. I saw the same press conference that you did. I've read the indictment. I am a lawyer.

But, bottom line here is, he's charged with crimes, he has to be convicted. Around this material and this charge of lying in various ways, is the fact that there was a leak.

There's no question about that, a leak of classified information. He Scooter Libby signed the same oath that members of Congress signed where we agree to protect classified information. In this case, that was not done.

BLITZER: So the fact that he's being charged with perjury, obstruction of justice, making false statements, as opposed to violating the original 1982 law that prohibits releasing the name of a clandestine CIA officer. Is that a big deal to you?

HARMAN: It's a different charge. But it's not a big -- this is a big deal. Five counts of lying, potential 30 years in jail, a million or more dollars in fines is a big deal.

This is one of the senior officials in government. Obviously he has to be convicted of these crimes. But what was this about? This was the intentional outing of a CIA operative for the purpose of discrediting her husband, who had revealed embarrassing information about Niger in connection with the war in Iraq.

BLITZER: Should the House Intelligence Committee or the Senate Intelligence Committee, or any committee of the Congress, now open up hearings into what happened or let the judicial process work itself out?

HARMAN: Well, there is a precedent for congressional investigations going on side by side with prosecutions. Obviously, we should not interfere with the prosecution. We should do nothing to interfere with the prosecution.

But our committee, the House Intelligence Committee, where I'm ranking member, is holding a series of hearings on leaks. The more general subject and I think it couldn't be more timely.

This 1982 law may have too high a standard. It may be too hard to prosecute. We may need something different. I personally favor the press shield law. But, there may be other things that we need to be doing to make certain that this never happens again.

BLITZER: Jane Harman is the ranking Democrat on the House Intelligence Committee.

Congressman Harman, thanks very much for joining us.

In the last hour, we spoke with Senator Orrin Hatch, himself a member of the Senate Intelligence Committee, and the judiciary committee as well.

Orrin Hatch, Jane Harman, two influential members of the United States Congress.

Bob Franken is over at the courthouse where so much of the action occurred over these past weeks and months. That's where the grand jury heard all this evidence.

Bob, what's the latest?

BOB FRANKEN, CNN NATIONAL CORRESPONDENT: I wanted to reflect on the explanation by the special prosecutor, Patrick Fitzgerald. He said at his news conference, we didn't get the straight story and we had to, had to prosecute.

(BEGIN VIDEOTAPE)

FRANKEN: Obstruction of justice, perjury, making false statements, all charges that allege that Libby lied to investigators trying to determine whether anyone had broken the law by revealing the identity of undercover CIA operative Valerie Plame Wilson.

She is the wife of Joseph Wilson, who had harshly criticized administration claims about Iraq's weapons of mass destruction. Libby is not charged with violating the law about revealing the name of a CIA operative, but, with attempting to mislead and deceive the grand jury.

PATRICK FITZGERALD, SPECIAL PROSECUTOR: At the end of the day, what appears, is that Mr. Libby's story that he was at the tail end of a chain of phone calls, passing on from one reporter what he heard from another, was not true. It was false.

FRANKEN: The two obstruction charges claim he made false statements to the grand jury, that he had learned of Plame's identity from other reporters when in fact, he was told by his boss, the vice president.

The alleged false statements were made to FBI agents about conversations he had with reporters Matt Cooper of TIME magazine and NBC's Tim Russert.

And perjury for his testimony about his conversations with the reporters. The theoretical penalty for all this is 30 years in prison and a fine of $1.25 million.

(END VIDEOTAPE)

FRANKEN: There were no charges about the underlying law. But, as so often happens, Wolf, in political cases, the people get in trouble because they cross into an alleged cover up -- Wolf?

BLITZER: Bob, what about Karl Rove?

We heard a lot about Scooter Libby today. Karl Rove, the president's top political adviser, the White House deputy chief of staff. What's his status?

FRANKEN: His status is limbo right now. His lawyer, we know, is negotiating with the special prosecutor making the claim that inconsistencies in Rove's testimony and statements were inadvertent. They were not willful, which is a legal standard that would have to be met before there could be prosecution.

And as far as that investigation is concerned, Fitzgerald said it's not over. But, the substantial bulk of the work is concluded, which translates to --- it could be over soon and then Karl Rove will decide whether he gets good or bad news.

BLITZER: We did hear the special counsel Patrick Fitzgerald say he was going to em panel a new grand jury that, if necessary, would be able to hear additional evidence witnesses.

FRANKEN: Well, he doesn't have to em panel, per se. Any grand jury is available to consider the evidence. Of course, there are regular grand juries that meet.

So at some point, if he decides that there is more prosecution needed, he would simply go in and use that grand jury and provide them the background he needed to do so he could make his case to that grand jury.

BLITZER: Bob Franken at the courthouse, thank you very much.

We now know who the CIA leak grand jury decided to go after. But many questions about this case and its origins remain very much unanswered.

Our senior political analyst, Bill Schneider is joining us now with more on that.

WILLIAM SCHNEIDER, CNN SENIOR POLITICAL ANALYST: Wolf, why did the White House go after Joe Wilson so aggressively?

That's a question hanging over this whole investigation.

(BEGIN VIDEOTAPE)

SCHNEIDER: Why did high-level White House staffers see Joe Wilson as such a political threat to President Bush?

Go back to the summer of 2003. The major fighting had ended in Iraq only two months before. This claim had been central to the administration's case for war.

DICK CHENEY, VICE PRESIDENT OF THE UNITED STATES: There is no doubt that Saddam Hussein now has weapons of mass destruction.

SCHNEIDER: Two months before the invasion, President Bush had asserted...

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: The British government has learned that Saddam Hussein recently sought significant quantities of uranium from Africa.

SCHNEIDER: In the July 6th, 2003 article, Wilson wrote that CIA officials had sent him to Africa to investigate that claim.

His conclusion? It was highly doubtful that any such transaction had ever taken place.

A year later, a Senate Intelligence Committee report called Wilson's findings inconclusive.

But, when Wilson went public in 2003, the president faced a growing insurgency. His own upcoming re-election campaign and no evidence of any weapons of mass destruction.

So what did they do? They played hardball. They went after Wilson's background, his politics and then it seems, his wife.

TIME reporter Matthew Cooper wrote that White House adviser Karl Rove informed him that Wilson's wife worked for the CIA and was responsible for sending Wilson to Africa, although Rove didn't use her name. Columnist and CNN contributor Robert Novak subsequently revealed her name. Tensions between the White House and the CIA grew. Shortly after Wilson published his criticism, then CIA Director George Tenet issued a statement saying the CIA should have ensured that the claim about Saddam Hussein seeking uranium in Africa was removed from President Bush's speech.

Administration officials were worried that the CIA would blame the White House for pre-war intelligence failures. Who asked the Justice Department on July 30th, 2003, to investigate the leak of Wilson's wife's identity? The CIA.

(END VIDEOTAPE)

SCHNEIDER: Politics as usual, that means hardball. But critics say there's a line between hardball and criminal acts -- Wolf.

BLITZER: Bill Schneider, thanks very much. Bill Schneider is our senior political analyst. Coming up, much more. The president's line of political defense in the CIA leak prosecution. Can he beat the ethical rap being pursued by his critics? A question for our "Strategy Session."

Plus we'll have a closer look at the charges against Lewis Scooter Libby and how it plays into the partisanship that's already rampant here in Washington.

And she was live outside the courthouse and in THE SITUATION ROOM as the news was breaking. Kathleen Koch will give us the inside story on today's courtroom drama. Stay with us.

(COMMERCIAL BREAK)

BLITZER: Welcome back. The indictment and resignation of Vice President Dick Cheney's top aide, Lewis Scooter Libby raises all sorts of question. Let's turn to our "Strategy Session" now for some answers. Joining us, CNN political contributor Paul Begala; and Gary Bauer, president of American Cause.

You've been in a White House, Paul Begala, a White House that knows -- Clinton White House -- how to deal with these kinds of issues. So far, what do you think of the way the White House is handling the indictment of Scooter Libby?

PAUL BEGALA, CNN POLITICAL CONTRIBUTOR: Not great, frankly. The president I thought as brief as his statement was, it was fine so far as it went. But you can't say I have a job to do and then get on the helicopter and go to Camp David for the weekend. What I would do, seriously if I were advising him, is tell him, first, you've got to beef up your staff. You've got to have a stronger, broader staff because you're losing one of your key players in Scooter Libby.

Second, you need a substantive agenda, Mr. President, that people actually support. They don't support you on Social Security. They don't support you on the war. Propose popular ideas. That's what Clinton did.

And then third, the president ought to now come out for reform. He ought to crack down on lobbyists. He ought to use this as an opportunity to reposition himself as somebody who's for reform. John McCain did that when he got caught up in the Keating 5 scandal.

BLITZER: Gary, do you agree.

GARY BAUER, PRESIDENT, AMERICAN CAUSE: No, I don't agree. I mean, I think the president is handling it just fine as of now. And, quite frankly, this administration hasn't had as much experience as Paul's administration did with these kinds of legal problems.

But look, nobody likes this. I think Paul would agree with that. When somebody's indicted, it's obviously a negative factor, something you've got to deal with. But he's innocent until proven guilty and I think we're going to wait it out and see what happens.

BLITZER: This is the big, unanswered question that goes through my mind. I'm sure a lot of viewer minds, as well. A smart guy like Scooter Libby, himself a highly respected lawyer here in Washington, served in the Defense Department, the State Department, now the White House for so many years, why?

If in fact these charges -- and they're simply charges right now -- are true, that he lied to the grand jury repeatedly, why would he do that? Was he protecting someone? Was he trying to shield information? What do you suspect, Gary?

BAUER: Well, we'll, obviously, have to wait and see. But this is a very murky area. The man is trying to recall conversations that took place many months before and trying to remember when the first time was that he heard the CIA agent's name. So I don't think ...

BLITZER: But it's -- I've got to stop you on this because, you know, this is very sensitive. He's apparently, according to -- Patrick Fitzgerald, the special counsel, says he repeatedly said he heard about this from journalists, the three journalists, specific journalist. Tim Russert, Matt Cooper of "Time" magazine, Judy Miller of the "New York Times" all said they heard it from him. They didn't hear it from them.

And they got three journalists who had testified before a grand jury to that point. And he had repeatedly heard it from State Department official, and you named undersecretary of state, heard it from the vice president himself, heard it from another member of the vice president's staff and an official at the CIA. Those kinds of things you remember.

BAUER: But look, Wolf, you pointed out yourself, he's a bright man. If he intended to deceive a grand jury, why would he cite the names of reporters that he certainly had to know would be brought up before the grand jury and questioned?

BLITZER: Well, maybe he thought that those members, those reporters would not testify, they would protect their source.

BAUER: You know, I wouldn't want to put my career based on what somebody else is going to decide to do in that situation. I think it's just as likely that he thought in his own recollection that this is how he heard the name, but obviously, in the trial that will follows we're going to find out a lot more than we know right now.

BLITZER: What do you think, Paul?

BEGALA: I think it's fairly obvious he was doing two things. He was trying to protect the boss, Vice President Cheney. There's no crime -- as Fitzgerald said in his press briefing today, there's no crime at all in Dick Cheney telling his chief of staff that Mrs. Wilson works at the CIA. But there is a crime in lying about it in front of the grand jury. I suspect Libby, a loyal guy, didn't want to drag his boss front and center into this scandal, but that's where he is. I think secondarily ...

BLITZER: So he's taking the bullet, in your mind, for Dick Cheney.

BEGALA: For Dick Cheney, and for the war. I think that there seemed to be an obsession as you look at the indictment and you read the coverage, with trashing Joe Wilson's arguments so as to protect their cause for the war, their argument that we needed to go to war because Saddam Hussein was trying to build a nuclear bomb, which wasn't true.

And I think those twin obsessions, trying to protect Dick Cheney and trying to advance the cause of President Bush's invasion of Iraq, is probably what drove this guy to ruin his whole career and maybe ruin his whole life and lie to the grand jury.

BLITZER: You're shaking your head, Gary.

BEGALA: Well, look, I mean, I don't know when Paul and his party are going to stop arguing about the war. Your administration alleged numerous times that Saddam Hussein had weapons of mass destruction. I don't think it's about the war. I don't think Fitzgerald thinks it's about the war.

It's a question of whether during testimony before a grand jury, honest answers were given about a specific leak of a name at the CIA. If Paul's party wants to have another debate about the war, I believe the president will win that debate again.

BEGALA: But the war may have been right or wrong. I believe deeply that the president and his team misled us into this war. Congress ought to play that role, not a prosecutor.

I thought Fitzgerald did a great job of saying this is not my job, to litigate the war. Congress should hold hearings though. They should look at what the president knew and when he knew it, what he told us and why -- whether it was true because I think there's abundant evidence that it wasn't. But we now know also that so committed to this war was the Bush White House that at least one of them was willing to ...

BLITZER: Gary, we're out of time, but go ahead and respond. BAUER: Well, look, I think the history here is pretty clear. A number of presidents said that Saddam Hussein had weapons of mass destruction. So did U.N. inspectors say and allege and the same thing. There was a wide variety of history here. Saddam Hussein's on trial because of mass murder of his own people.

Again, if the Democrats want to have another debate about the war using this particular criminal matter, I think they're making a big mistake.

BLITZER: All right, we'll leave it right there. Gary Bauer, thanks very much, Paul Begala, thanks to you, as well.

Much more ahead here in THE SITUATION ROOM on the CIA leak indictment. What was it like inside the courthouse as that bombshell was exploding literally, indictment? Insights, that's coming up next.

Plus, another major story still playing out. The aftermath of Hurricane Wilma. How many Florida residents remain powerless right now? Stay with us. You're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: It was certainly a tense situation here in Washington in the hours and minutes before we got official word on the indictment of Scooter Libby. Our Kathleen Koch was on the scene as the huge CIA leak story broke.

Kathleen is now here in THE SITUATION ROOM. We saw that dramatic video of you walking out. We'll show it to our viewers. Kathleen, tell us what we're seeing. You had just come out from the courtroom.

KATHLEEN KOCH, CNN CORRESPONDENT: Right. We actually had just gotten the surprise because we expected that when Patrick Fitzgerald was in the courtroom, that he, that the grand jury foreperson, that someone would read out the indictment, that they would say exactly who it was directed to. But that didn't happen. So that was part of the drama.

The early drama, Wolf, these grand jury proceedings are secret. Often they keep it very secret from reporters, from the sketch artists, from everyone else in the courthouse, where the proceeding is going to take place.

So, all morning there was this guessing game going on, who would be the judge handling it, where would we end up and so there was a lot of bouncing around in the courtroom just to make sure we were in position in the right place for this historic moment.

BLITZER: All right, so you were walking out. We didn't want to waste any precious seconds. You had a cell phone that you were talking to, but our camera from afar was watching you every step of the way.

KOCH: And you know, Wolf, I had no idea because what I was focusing on was reading the information that I jotted down on my notepad very quickly because the proceeding lasted only about two minutes. It was very quick.

BLITZER: Well, talk about that proceeding inside the room.

KOCH: Well, it was about 12:23 when Patrick Fitzgerald filed in. He came in with his legal team. And they sat down at a long rectangular table. And across from him sat the jury foreperson, an African-American woman wearing a dark black dress. And they spoke very quietly in hushed tones. It wasn't really a sense really of excitement.

There was a lot of anticipation on the part of the reporters, the sketch artist, producers, everyone in the courtroom. But, they were very quiet, very orderly, very serious. And about 15 minutes later, then the judge came in, that was the federal magistrate, Judge Debra Robinson (ph), she came in and took her seat, as did the 18 other members of the grand jury. And that was when everything unfolded very quickly.

The judge asked the jury foreperson, do you have any materials to present? She said yes, she walked up, handed them to the clerk. The clerk gave them to the judge. The judge then spoke to Patrick Fitzgerald and she said, do you -- does you team -- do you have anything else to say, anything further to say, any other motions?

They said no. And she took this material and said these materials should be tendered to the deputy clerk for filing, and that was it. And there was this, that's it, that's all? And suddenly, as soon as she left, you have to let the judge leave the courtroom first, people just bolted for the doors and ran in this mad scramble downstairs to get to the clerk's office to get this material.

BLITZER: Kathleen Koch, you were on the scene of history being made here in Washington. Thank you very much.

Let's go online for more on this developing story. Our Internet reporters -- Internet reporter Jacki Schechner standing by with that.

JACKI SCHECHNER, INTERNET REPORTER: Wolf, there's just one of me. If it's not available online, it's made available online very quickly. We are learning that. Scooter Libby's indictment available online at the web site of the special counsel, Patrick Fitzgerald, this at the U.S. Department of Justice web site.

Now, you can read the indictment for yourself in its entirety. And essentially the five counts for which he's been indicted boil down to three separate U.S. codes: obstruction of justice, false statements, and perjury.

Now, if you want to read more what Scooter Libby allegedly did you can do that at Cornell University Law School, also available online. This is called the Legal Information Institute.

For example, obstruction of justice, the first count on the indictment, translates into this: It's Code 1503, influencing or injuring officer or juror generally. Clearly, obstruction of justice, a nice neat tidy title. But, you can read more in depth also about the false statements and the perjury charges.

Again that through Cornell University Law School, and the indictment itself on the U.S. Department of Justice web site -- Wolf.

BLITZER: Jacki, thank you very much.

Jacki Schechner with the situation online.

Zain Verjee is on assignment, she's been on assignment all this week working on "American Morning."

Our Mary Snow, though, is joining us from New York with a closer look at some other stories making news.

Hi, Mary.

MARY SNOW, CNN CORRESPONDENT: Hi there, Wolf.

Florida's largest utility says it's restored power to 1.4 million customers who lost electricity because of Hurricane Wilma, but at least as many Florida Power & Light customers are still in the dark. Some of them may not get power until Thanksgiving week.

Utility is giving first priority to gas stations and supermarkets.

Still another storm is threatening Central America. Tropical storm Beta is expected to become a hurricane. The U.S. National Hurricane Center predicts Beta will hit Honduras and Nicaragua Sunday. The storm is expected to drench the region with up to 15 inches of rain.

In part of Nicaragua evacuations already are under way.

Defense Secretary Donald Rumsfeld says he won't take part in any government discussions about medical treatment for bird flu. In the 1990s, Rumsfeld chaired the company that patented Tamiflu, a medicine that may ease bird flu symptoms. Rumsfeld still owns stock in the company and Rumsfeld can make decisions about using the military to deal with bird flu.

And to the Middle East where Palestinian sources say one person was killed and another wounded in an Israeli rocket attack in Gaza today. The Israeli defense forces confirm its aircraft targeted militants who they say were going to carry out a rocket attack.

According to Palestinian security sources, the person who was killed was a member of the Al Aqsa Martyrs Brigades. And the wounded person was from Islamic Jihad -- Wolf.

BLITZER: Mary Snow in New York, thank you very much.

We are now getting important news in from Lewis Scooter Libby, himself.

A statement has just been released the he has prepared, Lewis Scooter Libby, under indictment. And a separate statement released by his attorney, Joseph Tate.

Dana Bash is on the White House lawn.

Dana, are you ready to tell us what these statements say?

DANA BASH, CNN WHITE HOUSE CORRESPONDENT: I am.

You see some of it up on the screen.

We just got this, as you said, from -- one from Scooter Libby himself and one from his attorney.

From Scooter Libby, he discusses, as we know, that he submitted his resignation to the president. He said, "Obviously, today is a sad day for me and my family," and he talks about the privilege of serving the country -- his country.

He says, quote, "I've spent much of my career working on behalf of the American people and for the safety of our citizens. I've conducted my responsibilities honorably and truthfully, including with respect to this investigation."

He says, "It is with regret that I step aside from that service today. I'm confident that at the end of this process, I will completely -- be completely and totally exonerated."

That is from Scooter Libby himself, putting out this written statement.

Now, from Scooter Libby's attorney, Joseph Tate, who has kept quite a low profile during this whole process, he puts out his statement saying that he and Scooter are very dismayed that the special prosecutor decided to pursue charges against him. He said, "This case began because of concerns that somebody had intentionally and knowingly disclosed the identity of a covert agent. The special counsel has concluded that Mr. Libby did not violate this law."

He goes on to say that "Mr. Libby testified to the best of his honest recollection on all occasions and that he cooperated fully with the investigation," and talks about the fact that he and Scooter Libby -- Scooter Libby and his attorney are distressed that the special counsel sought to pursue alleged inconsistencies in his recollection of what he said and others have said.

So clearly this is a statement from -- both from Scooter Libby and more specifically from his attorney, quite a combative statement making clear that they believe that he testified honestly and that he will be exonerated and be found innocent at the end of the day.

BLITZER: All right, Dana, thank you very much.

That is especially -- I just want to point out one line in here, the line about -- that Scooter Libby says, "it's just an honest mistake. As lawyers, we recognize that a person's recollection and memory of events will not always match those of other people, particularly when they are asked to testify months after the events occurred."

I guess that's going to be the thrust, Dana, of his defense, that he just had a different recollection of how this information was passed on to him. He thought he was getting the information about Valerie Plame Wilson, the wife of the former U.S. ambassador Joe Wilson, from reporters. The reporters say, hey, no, they didn't know about it until he told them about this.

BASH: And I can tell you something interesting.

That a few weeks ago when Judy Miller was released from prison, that was sort of the one time I think that at least I was able to get through to Joseph Tate to talk about this whole issue. And at that time, he said that before the discussions began with Judy Miller of the "New York Times," with her attorneys and then the special prosecutor, he had not had any kind of conversation with the prosecution at all, he said, for a year until that time.

And obviously, that did not indicate that he was not a target of this investigation, but it's sort of interesting to know the way the process worked according to Joe Tate, Scooter Libby's attorney.

BLITZER: And Scooter Libby's attorney saying, "We will defend vigorously against these charges."

All right, Dana, thank you very much.

Still ahead, much more of our coverage.

Patrick Fitzgerald, the man and his case. I'll ask a former prosecutor whether he thinks it's likely that Patrick Fitzgerald will get a conviction.

Plus, the president promises to keep on working but can he with the White House under the cloud of Lewis "Scooter" Libby's indictment?

Much more of our coverage from THE SITUATION ROOM right after this.

(COMMERCIAL BREAK)

BLITZER: Welcome back.

The now former chief of staff to the vice president, Dick Cheney, stands indicted. But the special counsel on the CIA leak case says his investigation isn't quite over.

We're joined now by Andrew McBride. He's a former federal prosecutor, a former lawyer in the Justice Department, now in private practice here in Washington.

Thank you, Andrew, very much for joining us.

ANDREW MCBRIDE, FORMER FEDERAL PROSECUTOR: Great to be here, Wolf.

BLITZER: How strong of a case does Patrick Fitzgerald have?

MCBRIDE: I think Patrick Fitzgerald has put together a very strong case, particularly on the perjury counts.

When you look at the testimony that was given before the grand jury, it does appear designed to mislead the grand jury as to how Mr. Libby found out the name and who he discussed that with afterwards. And it seems that there are three or four witnesses in the case, including the vice president of the United States, who will contradict testimony at trial, would contradict testimony that Mr. Libby made under oath before the grand jury.

BLITZER: So this could be -- if the vice president is forced to testify, CIA officials, State Department officials, journalists, this could be quite an extravaganza.

MCBRIDE: This would be one of the biggest extravaganzas Washington has ever seen.

And I predict that Mr. Libby will come to a resolution of this case before it comes to the vice president of the United States, the undersecretary of state having to actually testify in open court as to what they did.

BLITZER: You mean -- you're talking about a plea agreement.

MCBRIDE: I'm talking about some kind of plea agreement.

And I think when Mr. Fitzgerald left open the future of the investigation, that in part may be he may be anticipating some cooperation from Mr. Libby or others who may enter pleas in the case.

BLITZER: So why wasn't that done in advance of this?

What would normally -- wouldn't normally the prosecutor go to Libby's attorney and say, "Let's talk plea. You plead guilty to something and we'll reduce the potential charges"?

MCBRIDE: I am surprised by that, Wolf.

And I think the difference between how Mr. Rove's attorneys handled themselves and how Mr. Libby's attorneys handled themselves is startling.

Mr. Rove requested to go into the grand jury that fourth time to try and clear up the very kind of perjury charges that Mr. Libby faces. And there's a statute that says if you go into the grand jury and you admit a false statement and correct it before the end of the term of that grand jury, which was today, it is an affirmative defense of the charge of perjury.

And that's what the back and forth between Mr. Rove and the independent counsel was over, whether or not he had satisfactorily done that, corrected the record in that fourth appearance.

BLITZER: But we don't know what the extent of any misstatements or any clarifications that Karl Rove might have had to make during that fourth appearance, which lasted for more than three hours, maybe four hours, before the grand jury.

But what you're suggesting though is that there was a different legal strategy by the attorney representing Karl Rove as opposed to the attorney representing Scooter Libby?

MCBRIDE: I think that's definitely so.

I think Mr. Rove's attorney was very smart to ask for that last appearance in the grand jury. Obviously, there was a contradiction at least in the public reports we had between Mr. Rove's testimony and Mr. Cooper's testimony, much as between Mr. Cooper and Mr. Libby.

In Mr. Rove's case, I think he went in and tried to correct that, and he was at least successful for the moment.

Of course, the grand speculation about this indictment I think is who is official A? Official A is listed in this indictment as one of the sources for Robert Novak's story. The speculation is that, that may be Karl Rove and that he may not be out of jeopardy possibly for the substantive charge of disclosing Mrs. Plame's covert identity.

BLITZER: So if there is going to be a plea agreement before a trial were to begin, how would that work out? Talk a little bit about the logistics of that.

MCBRIDE: Well, actually, I went down to the courthouse and got the indictment as stamped. It has been assigned to Judge Reggie Walton, who is a very conservative law and order judge, a former prosecutor, appointed to the bench by Ronald Reagan and then by Bush 43 -- by this president, and was actually an aid to Bill Bennett as the drug czar. So you're looking at a law and order judge.

BLITZER: You're looking at a good Republican.

MCBRIDE: You're looking at -- he is a good Republican, but he is also known as a law and order judge, not a defendant's judge. I think what you'll see here -- and people talk about the possible sentence of up to ten years, but I think Mr. Fitzgerald was quite clear what's important is the sentencing guidelines.

The offense of obstruction is a Level 14 offense which carries a sentence of 15 to 21 months in prison. If you plead guilty, the offense level is reduced such that he would be eligible -- Mr. Libby would be eligible I think for a half suspended sentence, something like home detention and then probation.

So the three points in the sentencing guidelines between going to trial and pleading guilty and getting what's called acceptance of responsibility could make a big difference. And you have to believe ...

BLITZER: We're still talking felonies though.

MCBRIDE: We're still talking felony, but you have to believe that if Mr. Libby were willing to go into the grand jury and mislead the grand jury in an attempt -- I think a vain attempt -- to protect the vice president, he's certainly going to be willing to plead guilty to these charges, I would think, to avoid a show trial where the vice president of the United States himself is going to have to testify against him.

BLITZER: Well, let me press you on that point because the assumption is that if he did what the allegations are, that he lied to the grand jury, he was doing that to protect the vice president of the United States. Why can't we assume he was doing that to protect himself?

MCBRIDE: That's a good point, wolf. And if you read the testimony at the end of the indictment, it is clear that it is possible that he is one of the two sources that Robert Novak referred to in his column as outing Valerie Plame. And the testimony is designed to say, I did not -- his testimony is designed to suggest, I didn't receive this information from government sources.

I received it as hearsay gossip from outside sources and I didn't confirm or deny it. And there are quite pointed questions that are recited at the end of the indictment that were made in the grand jury and by the grand jurors themselves, posed by the grand jurors themselves. Well, why were you so careful in not admitting or denying the information if you didn't know it was classified?

And his answers, I think, on the record as Mr. Fitzgerald has laid them out in the indictment if one reads the indictment, it is quite troubling the mountain of evidence that he knew in advance that it was classified information, that it came from the CIA, and the statements he made, in fact, that he only received it from outside sources and he didn't know that it was classified.

BLITZER: Yes, because I would suspect there would be two motivations if he did what is charged, the one would be to protect the vice president's friend -- he's very loyal to the vice president -- the other to protect himself from what he feared, if he were to say you know what? I did tell these reporters that. He probably feared he could have been indicted under the 1982 law that prohibits releasing the identification of a covert CIA officer.

MCBRIDE: That's correct. And I think you have to be clear, and Mr. Fitzgerald was. It's perfectly legal for the vice president and Mr. Libby to discuss classified information. And there is no evidence that the vice president did anything wrong in this indictment. But whatever his motive, I think there is a strong case here of perjury before the grand jury that any good prosecutor would have indicted.

BLITZER: Andrew McBride is a former federal prosecutor. Thanks very much.

MCBRIDE: Thank you, Wolf.

BLITZER: Good discussion.

Coming up, it's rare but it has happened before. High level presidential officials investigated for alleged crimes or improper deeds. Our Bruce Morton will remind all of us of some of them. Stay with us here in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: Call it whatever you want. A controversy, a crisis, a scandal, we'll see just how powerful a punch is delivered to the Bush administration now that an indictment has been issued in the CIA leak probe. Our political analyst, Carlos Watson is joining us from New York with a closer look. How do you suspect, Carlos, this is going to play out as far as the president's substantive policy decisions are concerned?

CARLOS WATSON, CNN POLITICAL ANALYST: Two big things to note here, Wolf. One is that not only is the controversy here but the hurricane and other issues have already caused three and arguably four substantive policy items to be sacrificed. So the estate tax, Social Security, and arguably even immigration reform are largely dead for this year, things that the Bush administration wanted to get done.

Going forward, I would actually look for substantive changes in two ways in which the administration hopes to maybe gain a little bit of notice. One, you might hear a little bit more about compassionate conservative policies, and I would look for that in the State of the Union address.

And two, frankly, you may hear in part coming out of the House of Representatives some new proposals in terms of energy policy, basically how to get gas prices down. In that way I think you're going to see Republicans trying to regain some momentum following this Libby indictment.

BLITZER: What about the whole notion that the whole world was literally watching? We were simulcast on CNN and CNN International. People no doubt around the world were watching all of this. What are the ramifications for international policy?

WATSON: Well, two significant things, again, to think about here, Wolf. I had an interesting conversation with European political analysts who said in the UK, you saw a similar sort of investigation in Parliament looking into whether or not those folks involved with supporting Tony Blair's involvement in the war kind of sexed up the documents.

And that investigation ultimately didn't yield too much. But you might see some in his own Labor Party move to reinvestigate it, particularly seeing what's happened here in the U.S., so that kind of ripple effect.

The other pretty significant thing internationally is whether or not the U.S. will now be seen as stagnant in terms of negotiating, whether people will say I'm not sure who's going to be in charge over there in terms of the White House and other places.

And consequently when we're negotiating on trade issues, when we're trying to move the world on questions of Iran or North Korea, whether we, frankly -- we won't be able to make as much progress as we hoped. Instead, there will be a cloud not only over the president but over the United States' ability to engage.

BLITZER: Carlos Watson, our analyst. Thanks very much, Carlos for that.

WATSON: Good to see you.

Up ahead, Harriet Miers. She has withdrawn her nomination to the U.S. Supreme Court. But what role will she play in picking the next justice to the high court?

And the blogs have been very busy about possible indictments for weeks. So what are they saying now? We'll tell you. You're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: Watergate, of course, is one of the most memorable. But there have been other cases of high-level White House officials involved in high-level investigations.

CNN national correspondent Bruce Morton reminds us of some of them.

(BEGIN VIDEOTAPE)

BRUCE MORTON, CNN NATIONAL CORRESPONDENT: Have other trusted White House aids gotten in trouble? You bet.

Harry Truman had an old army buddy, Harry Vaughan, as his military aide. A Senate subcommittee once reprimanded Vaughan for accepting a gift of seven home freezers.

And when the government of Argentina gave him a medal, prominent columnist Drew Pearson said Vaughan ought to be fired. Truman's answer, quote, no SOB is going to tell me who to have on my staff or in my Cabinet, unquote.

When Eisenhower lost his chief of staff, Sherman Adams, in the scandal over Adams accepting a Vicuna fur coat from a businessman with interests at the White House.

Walter Jenkins, a top aide to Lyndon Johnson, resigned after being charged with having sex with a man at a YMCA bathroom a block from the White House.

Jimmy Carter lost his budget director and friend Burt Lance over charges of financial irregularities back home in Georgia before the presidential election.

Oliver North and others deceived President Ronald Reagan by taking money Iran had paid for U.S. arms. The president knew about that. And giving it to the contra-rebels in anything Nicaragua.

Reagan said he didn't know about that. And Congress had voted against funding the rebels.

The first President Bush lost his chief of staff, John Sununu, because Sununu was using government planes for private business. Like trips to his desks in Boston.

What is it about life in the White House?

(END VIDEOTAPE)

MORTON: Sometimes, they do it just because they can. Harry Vaughan can't really have needed seven freezers, can he?

Sometimes like Oliver North and his friends, they do it because they're absolutely certain they know what's best for the country, whatever the Congress has decided.

And hey, why bother the president with this? Whatever the reason, a lot of top aides have fallen from grace.

Bruce Morton, CNN, Washington.

BLITZER: The indictment today certainly dominates the news. But, let's take a look at some other important political developments, specifically the president's next move in the U.S. Supreme Court showdown.

That's in our "Political Radar."

Many people now expect Mr. Bush to name a replacement for Harriet Miers, sooner rather than later, to show among other things, that he's moving ahead despite the CIA leak indictment against Lewis Scooter Libby.

On this day, after she withdrew her high-court nomination, Miers is expected to play a key role in deliberations underway within the administration.

We saw her leaving the White House with the president as he headed for Camp David this weekend where he's likely to weigh options.

Andy Card, the White House chief of staff, also on that flight.

Our new poll taken overnight shows most Americans do see the Miers withdrawal as a setback for the Bush administration. With 42 percent characterizing it as a minor setback.

The poll shows more conservatives are disappointed by Miers's withdrawal than are pleased, in contrast to many activists on the right who opposed Miers's nomination.

And most Americans, 59 percent, say it's important that Mr. Bush choose another woman to replace Miers.

Still to come here in THE SITUATION ROOM, what are the blogs saying about today's indictment of Lewis Scooter Libby? We'll go inside for reaction. And where does Libby go from here? For that matter, what should the White House do next?

We'll discuss that, as well. Stay with us.

(COMMERCIAL BREAK)

BLITZER: Welcome back.

Blogs are certainly all over today's indictment of Lewis Scooter Libby.

Our Internet reporter Jacki Schechner checking the situation online. JACKI SCHECHNER, CNN INTERNET REPORTER: Wolf, let's check in with the bloggers who have been on the story from the very beginning.

Tom Maguire, a conservative blogger, justoneminute.typepad.com, has been following the CIA leak investigation since the day that Bob Novak's column came out. Some say even probably before that.

Some open questions at this hour. Who was Novak's source? Is there a threat to national security? Will there be other charges against other officials?

This is what we're seeing a lot of today. This isn't over.

Jeralyn Merritt, TalkLeft.com, a criminal defense attorney in Denver, Colorado, who's been blogging also extensively since very close to the very beginning.

Has anyone agreed to plead guilty? Who was Pincus's source? These are the things that are piling on. People are adding their own questions over there.

As for liberal reaction, here's a visual for you. This is from AMERICAblog. They are very, very happy that something came down today.

Also pointing out, Josh Marshall at Talking Points Memo, that Scooter Libby didn't just work for vice president Dick Cheney. Also worked for President Bush, keep that in mind. They think this is going to go even farther.

Heading over to some of the conservative blogs, Ace of Spades, this is an anonymous blogger in New York, pointing out in his opinion that Libby was not indicted on anything involved national security.

But, Wolf, we're seeing a lot of this on the right, saying that if Scooter Libby lied, he should have resigned. This was the right outcome in that regard.

We'll send it back to you.

BLITZER: Thanks very much, Jacki.

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