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Anderson Cooper 360 Degrees

Libby Indicted in CIA Leak Case

Aired October 28, 2005 - 19:00   ET

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

HEIDI COLLINS, CNN ANCHOR: Good evening everybody.
I'm Heidi Collins in for Anderson Cooper.

An indictment in the CIA leak case. A resignation and what it means for the White House.

360 starts now.

UNIDENTIFIED MALE: Today, a serious blow for the White House. One of the president's key advisers indicted.

UNIDENTIFIED MALE: A few hours ago, a federal grand jury returned a five count indictment against I. Lewis Libby also known as Scooter Libby.

UNIDENTIFIED MALE: Did Scooter Libby lie under oath and obstruct justice?

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: Today, I accepted the resignation of Scooter Libby.

UNIDENTIFIED MALE: The fallout begins. But, what comes next? Are more indictments ahead? And what about Karl Rove? Is he out of the woods?

UNIDENTIFIED MALE: Is the investigation finished? It's not over.

UNIDENTIFIED MALE: Behind the scenes, he's been a major player in the White House, more than just the chief of staffer Vice President Cheney. What does Scooter Libby's indictment mean for his bosses?

BUSH: I got a job to do and so do the people who work in the White House. We got a job to protect the American people and that's what we'll continue working hard to do.

UNIDENTIFIED MALE: A White House in crisis. Live from the CNN Broadcast Center in New York this is ANDERSON COOPER 360.

COLLINS: A dramatic day at the White House, to be sure. The indictment handed up today began with the leak of classified information more than two years ago. The case has centered on whether anyone broke the law by disclosing the name of CIA agent Valerie Plame. Today's indictment does not address that allegation. It focuses on an alleged cover up. At this moment Lewis Scooter Libby is facing a five count indictment. Together the charges carry a maximum possible sentence of 30 years in prison and $1.25 million, that's $1.25 million in fines.

The prosecutor in the case, Patrick Fitzgerald, said today the investigation is not over although the bulk of its work is done. He did not comment on whether anyone else faced indictment including Karl Rove.

Scooter Libby submitted his resignation today stepping down from his job as Vice President Dick Cheney's chief of staff and a powerful voice in the administration.

Earlier in the investigation, President Bush had vowed to fire anyone on his staff involved in the leak.

A fast moving day in Washington and CNN's David Ensor, Suzanne Malveaux and Jeffrey Toobin have been covering the story all day long. We're going to get to all of them in a moment.

We begin tonight, though, with the charges Mr. Libby faces laid out in the indictment that, for the first time, offers a window onto the case that Patrick Fitzgerald has been building for more than two years.

Here's CNN's David Ensor.

(BEGIN VIDEOTAPE)

DAVID ENSOR, CNN CORRESPONDENT (voice-over): The first indictment of a sitting White House official in 130 years comes down to this. The special counsel says that Lewis Scooter Libby, the vice president's right hand man, not only gave the identity of CIA clandestine officer, Valerie Plame Wilson, to several reporters. He then lied about doing so to FBI agents to a federal grand jury.

PATRICK FITZGERALD, SPECIAL COUNSEL: 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.

He was at the beginning of the chain of the phone calls. The first official to disclose this information outside of the government to a reporter and that he lied about it afterwards under oath and repeatedly.

ENSOR: The indictment charges Libby with one count of obstruction of justice, two counts of false statements to FBI agents and two counts of perjury, lying under oath to the grand jury.

Fitzgerald says Libby had at least seven discussions with other government officials about Mrs. Wilson's identity as a CIA officer. Even as he was passing that information on to reporters.

For example, the indictment says during a June 2003 meeting with a CIA briefer, Libby, quote, "expressed displeasure that CIA officials were making comments to reporters critical of the vice president's office, and discussed with the briefer, among other things, "Joe Wilson" and his wife, "Valerie Wilson," in the context of Wilson's trip to Niger."

He also spoke about it, says the indictment with then White House Spokesman Ari Fleischer.

FITZGERALD: What's important about that is that Mr. Libby, the indictment alleges, was telling Mr. Fleischer something on Monday that he claims to have learned on Thursday.

ENSOR: Fitzgerald defended jailing "New York Times" reporter Judy Miller for 85 days to compel her testimony, saying, it was crucial.

FITZGERALD: I was not looking for a first amendment showdown.

ENSOR: In a statement, Libby responded to the charges saying, quote, "I am confident that at the end of this process I will be completely and totally exonerated."

"Libby is innocent," said his lawyer, Joseph Tate.

UNIDENTIFIED MALE: I have no comment.

ENSOR: The spy's husband, former ambassador Wilson, declined to speak to CNN but his lawyer red a statement for him.

CHRISTOPHER WOLF, WILSON'S ATTORNEY: I continue to believe that revealing my wife, Valerie's secret CIA identity was very wrong and harmful to our nation.

And I believe -- I feel that my family was attacked for my speaking the truth about the events that led our country to war.

(END VIDEOTAPE)

ENSOR: Special Counsel Fitzgerald said he's neither Democrat nor Republican.

In response to some Republican that the charges that he's made of perjury and false statements are excessive, Mr. Fitzgerald said, quote, "those talking points won't fly" -- Heidi.

COLLINS: David Ensor, tonight.

Thank you, David.

The story of the indictment of I. Lewis Libby has a great many twists and turns. Many of which you would really have to have been a U.S. attorney to understand.

Luckily, that's is just what CNN Legal Analyst Jeffrey Toobin was before picking up a reporter's pad and pencil.

JEFFREY TOOBIN, SR. LEGAL ANALYST: An assistant U.S. attorney, but I think I do understand what happened today.

COLLINS: We'll upgrade you here.

TOOBIN: All right.

COLLINS: All right. So, let's get straight to the heart of this, which I think is the fact that Scooter Libby was charged with obstruction, not with the leak itself. What do you make of that?

TOOBIN: Well, it's, kind of a classic Washington scandal indictment. Because the old saying in Washington, is it's not the crime, it's the cover-up.

And in this case, as in so many scandals before, the high government official, ultimately, does not get charged with the substantive offense, which is improperly disclosing Valerie Wilson's name, but lying in the course of the investigation of that disclosure.

COLLINS: If he hadn't admitted that he lied in front of the grand jury and pleaded the fifth, let's say. What would we be talking about tonight?

TOOBIN: Well, he would probably be out of work, but he certainly would not be facing indictment.

In a normal criminal investigation, a defense attorney would have said, what are you crazy? Take the fifth. Don't talk to the investigators.

But, President Bush said everyone in my administration is going to cooperate. So, everyone has to go down there and testify, who is asked to testify. Libby chose to do that. He's paying the price right now.

COLLINS: All right, so how serious do you think these charges are? I mean, there's a legal side and there's the political side.

TOOBIN: Well, I think Scooter Libby is out of political business for now. He's trying to stay out of prison. So, it's very -- they are very serious.

You know, it's a maximum of 30 years in prison, theoretically. He's not going to go to prison for 30 years but he might go to prison for one year for this kind of offense.

And politically, the question is, I think, how much is the administration...

COLLINS: Absolutely.

TOOBIN: ...particularly Vice President Dick Cheney threatened by this because if you read the indictment he is clearly going to be a witness in the trial.

And then the question is what was his involvement in all these activities that lead to the indictment? He's never answered those questions.

COLLINS: And if he took a stand, what he would say.

What about Karl Rove? Is he in the clear?

TOOBIN: Well, Pat Fitzgerald wouldn't say definitively. But, certainly, I picked up the vibe in that very long news conference gave, that he is in the clear. That it is basically over.

The investigation, there may be some mopping up, but basically there is no more investigation. If Karl Rove was going to be indicted, today was going to be the day. He didn't get indicted. I think he's sighing a big sigh of relief this weekend.

COLLINS: He said he was going to have a good weekend.

TOOBIN: He said he was going to have a fantastic weekend, which I bet he is.

COLLINS: All right.

Well, Jeffrey Toobin, we appreciate it. Assistant district attorney or U.S. attorney, or whatever you were, we are glad you were here tonight. Thank you, Jeff.

TOOBIN: I'm an ex. Whatever I am.

COLLINS: An ex, all right, still know your stuff and so does someone else tonight.

And for more insight now into the very powerful figure, who was not indicted today. We are joined by the author of "Rove Exposed: How Bush's Brain Fooled America." That's James Moore, a Texas journalist, who joins us tonight from Austin.

Mr. Moore, thanks for being with us. I want to begin with asking you the same type of question. What do you make of fact that Rove was not indicted?

JAMES MOORE, AUTHOR, "ROVE EXPOSED": Well, I confess to being a bit surprised. I think that it's difficult for anyone who has watched Mr. Rove for all these years to think that he was not involved, much less did not have knowledge of this kind of thing.

He tends be aware of every sparrow that falls and anything he's involved in. So, that's a bit surprising to me. But, even something that I anticipated and have said for some time, is that I would not be surprised to see him get away, and I think that's precisely what's about to happen.

COLLINS: Well, what sort of strategy do you think Rove is advising Bush at this point, now that the indictment against, at least, Libby has come down?

MOORE: Well, historically, what they do is they send out surrogates and third parties to do their spin and suggest this is a technicality. He thought he was doing something that was not wrong. That it was simply in the course of business.

I think it's possible we still may see some surrogates attack the U.S. direct attorney. That would be a very bad move by this White House and this president. Mr. Rove has used these tactics to great effect in the past. So, I wouldn't be the least bit surprised to see that kind of thing happen again.

COLLINS: Is it surprising to you that the Republicans aren't actually lining up to support Libby? I mean, do you think Rove is reaching out to Republican members of Congress in order to do that?

MOORE: No, I don't think he's going to be making those phone calls, because he knows that the great risk and the problems that occur for any politician who steps out and associates themselves right now and says, "This man is innocent," if in fact he turns out be guilty.

I think the greater fear though for the White House and for Mr. Rove is that people begin to realize and start reminding themselves of the fact that this is a president who said he was going to bring accountability and responsibility back into his administration and claimed that he was going to improve things. And these are people he supervises, he and the vice president, and they are not in charge and unaware of what their staff is up to, and this is a major problem for the White House.

COLLINS: And a good point that you make, remembering that this is the indictment phase only. We will see how it plays out.

MORE: Correct.

COLLINS: James Moore, thank you.

MOORE: You're welcome.

COLLINS: Still to come tonight on 360, the man whose wife was outed as a CIA agent reacts to the charges brought against Lewis Libby.

Joe Wilson says this is, quote, "a sad day for America."

And a little later, another reaction -- this one from the president of the United States, who calls the investigation serious.

Also tonight, the prosecutor who brought the charges steps out of the shadows and into the spotlight.

We've barely heard anything from Patrick Fitzgerald in the last couple of years; today we heard a lot.

(COMMERCIAL BREAK)

COLLINS: In a moment, possible crimes and cover-ups.

But first, Erica Hill from Headline News joins us with some of the other stories we're following tonight. Hi, Erica.

ERICA HILL, HEADLINE NEWS ANCHOR: Hey, Heidi.

This coming to us tonight out of New Orleans: 51 members of the New Orleans Police Department have now been fired for deserting their posts in those critical days after Hurricane Katrina. That number includes 45 officers and six civilian employees. Fifteen other officers resigned while under investigation, and other cases are pending. Superintendent Riley said many of the deserters still have not been heard from.

The Pentagon, meantime, inviting a group of United Nations investigators to visit the U.S. detention camp in Guantanamo Bay. They will observe conditions at the prison. They'll also have the opportunity to question military command officials. But they will not have access to the prisoners. Human rights activists have accused the U.S.'s detention policy. The Pentagon, though, says it has, quote, "nothing to hide."

Rosa Parks, the woman widely credited with giving birth to the civil rights movement, will now lie in honor in the Capitol Rotunda. She is the first woman ever to be accorded the honor. Parks, who refused to give up her seat on a segregated bus in 1995, died on Monday at the age of 92. Lawmakers today approved a motion to allow Americans to pay their respects to Parks on Sunday and Monday. Now, this will be just the fifth time in the past 20 years the Rotunda has been used for a public viewing of the deceased.

And, Heidi, those are the headlines at this hour.

Back over to you.

COLLINS: Great. All right, Erica, we'll see you again in about 30 minutes.

Today's indictments against Scooter Libby charge him with perjury, making false statements and obstruction of justice, not though -- significantly -- with divulging classified information. That puts Libby in company with a long line of high-profile defendants who got caught not for the crime, but for a criminal cover-up -- both serious offenses, especially when it happens within the president's inner circles.

CNN senior political analyst Jeff Greenfield joining us now.

So what about this?

We heard Jeffrey talking about it a minute ago. Not the crime, the cover-up.

JEFF GREENFIELD, CNN SENIOR ANALYST: Yes.

I think this is a little bit different, because what Mr. Fitzgerald said repeatedly is that the identity of a CIA operative was disclosed, that these identities were supposed to be kept secret. And he kept referring to the fact that this was a matter of national security. He just used that phrase I think three or four times -- that national security was at stake and that was the reason for trying to find out what happened, and because of Mr. Libby's alleged acts, said Patrick Fitzgerald, we couldn't discover exactly what happened. And that's why these alleged acts were crimes.

In other words, he was saying, "We don't know whether or not a substantive crime was committed because he lied to us." That's what he's saying.

COLLINS: So is it similar to the infamous Chicago case all those years ago -- you know what I'm going to say -- Al Capone, getting him for tax evasion, not murder?

GREENFIELD: Yes, I think there's a real difference, because the Fitzgerald analogy was really interesting.

He said suppose a batter is hit in the head by a pitch and you're trying to find out did the pitcher throw it deliberately, was he maybe aiming at this back, maybe he just let go of the ball by accident, and somebody deliberately stands up and blocks your view of what happened.

So you can't find out, but it's that act of standing up which is what -- in effect, the analogy that Libby is accused of doing. That was the crime.

So he's saying, "I don't know what happened substantively because Mr. Libby criminally behaved in a way that made me not be able to find out."

COLLINS: But why didn't he go that extra step to indict on charges of violating the Espionage Act?

GREENFIELD: Yes, or the 1982 (inaudible).

Because he couldn't find -- that's the whole point. He said, "I don't know."

First of all, the Identities Act requires a very burden of proof. They would have had to have shown that Libby deliberately set out to blow the cover of a covert agent the government was actively protecting.

But beyond that, the whole argument here is Libby prevented the grand jury from finding out what happened so he couldn't indict because of what Libby did.

Now, that's the allegation.

But Fitzgerald, you know, keeps coming back to the point; he said, "Look, we need human intelligence to fight the war on terror. And if people are going to risk their lives and safety being covert agents for the United States, their identities have to be protected."

So he's trying to say this isn't some technical, cutesy violation of the law.; this goes to the heart of why we protect covert agents.

COLLINS: He also said, everybody take a deep breath, this is only an indictment.

GREENFIELD: Just purely on the atmospherics.

We hadn't seen this guy for 22 months, he was like the great unknown. He's a New York-raised Irish kid whose dad was a doorman.

The only thing that's amazing is he went to Harvard, because guys like this who are the treasure of New York City usually go to places like Fordham and St. Johns. And Pat Moynihan once said, Those guys go hunt the white-collar criminals who went to Harvard and Yale. I mean, Bush is looking for a new Supreme Court nominee.

(LAUGHTER)

COLLINS: That will happen on Monday, right?

GREENFIELD: Well, I'm looking at Fitzgerald. I mean, he's absolutely a natural in terms of that kind of effect, a sense of humor, and yes, in telling the reporters repeatedly -- he was talking to us -- look, take a deep breath, fellows.

So he's very engaging, I think, just on the...

COLLINS: Maybe you're on to something with the Supreme Court nomination. We'll have to see what happens.

GREENFIELD: They don't ask me.

(LAUGHTER)

COLLINS: We do, though.

Jeff Greenfield, thanks so much for that.

Still ahead tonight on 360, one of the most powerful men in Washington is indicted on cover-up charges and resigns his position as the vice president's most trusted adviser.

Also tonight, where does that leave Dick Cheney? Those in the know say Lewis Libby was to him what he is to the president.

And a little later, the vice president and his now-indicted adviser were among the architects of the war in Iraq. What sort of shadow does this scandal cast on that?

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

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 to one reporter what he heard from another was not true. It was false. (END VIDEO CLIP)

COLLINS: Almost everyone involved in the Plame affair weighed in on today's development in Washington. Reporters got to hear from the special counsel in the investigation for a full hour. And later in the day, a much briefer response from President Bush.

(BEGIN VIDEO CLIP)

BUSH: Today I accepted the resignation of Scooter Libby. Scooter has worked tirelessly on the behalf of the American people and sacrificed much in the service to this country. He served the vice president and me through extraordinary times in our nation's history.

Special counsel Fitzgerald's investigation, and ongoing legal proceedings are serious and now the proceeding, the process moves into a new phase. In our system, each individual is presumed innocent and entitled to due process and a fair trial.

While we're all saddened by today's news, we remain wholly focused on the many issues and opportunities facing this country. I got a job to do and so do the people that work in the White House. We got a job to protect the American people and that's what we'll continue working hard to do. I look forward to working with Congress on policies to keep this economy moving, and pretty soon I'll be naming somebody to the Supreme Court. Thank you all very much.

(END VIDEO CLIP)

COLLINS: Joining now from Washington, Cliff May of the Foundation of the Defense of Democracies. Cliff, nice so see you tonight.

CLIFF MAY, FND. FOR THE DEFENSE OF DEMOCRACIES: Thank you.

COLLINS: You said that former Ambassador Joe Wilson lied in his book about his trip to Niger? Is that relevant to this case now, and what particularly did he lie about that concerns you?

MAY: It's probably not relevant to this case now, but there are a number of things. One is, when he talked to people like Nick Kristof at the "New York Times" and Walter Pincus, he said that the way he knew the stories about Saddam seeking uranium were not true were based on the forgeries. Well, we know -- and this is all in the Senate Intelligence Report -- that those forgeries didn't come out until something like eight months after he had been to Niger. So that couldn't have been the case.

He also said that his wife had nothing to do with sending him to Niger. In fact, again, according to the Senate report on that, his wife did indeed. She was instrumental in recommending him for the trip and so that was relevant. And so there area whole numbers of things he said, and again, it's not my accusation.

Look at this Senate bipartisan report that shows that he was telling untruths or he was inaccurate in many of his statements, both in public in his book, and I think also if you look when he was a secret source leaking information to Nick Kristof at the "Times" and Walter Pincus particularly at the "Washington Post" and David Corn at "The Nation" I would argue too.

COLLINS: Is just the first step then? I mean, will we get to all of that possibly later?

MAY: Possibly not. And I think why in a way what happened today is a little bit disappointing to just about everybody because I think a lot of people -- myself, I think, included -- wanted to mysteries cleared up. Wanted to know, OK, so what really happened here? What are the parts of the puzzle that we haven't known that he knows?

And we didn't find that out. We didn't even find out today whether or not Valerie Plame was indeed a covert agent. We just don't know that yet. That her status was classified is not the same as her being a covert agent.

The original charge made by Wilson and by his allies has been that there was a high-level conspiracy, a conspiracy in the White House, to expose Valerie Plame as a secret agent as a way to punish Wilson and send a message to others. No charge along those lines were made.

In fact, Fitzpatrick even said we're not charging that Scooter Libby tried to out a secret agent. Well, my question is, did anybody? Did nobody? There is no evidence so far about any kind of conspiracy so there's a lot of mysteries here.

COLLINS: A lot of mysteries, and that being said, I think it's important to question if Scooter Libby was not involved in outing a CIA agent, as the indictment does not say, why would he obstruct justice if he didn't have anything to hide?

MAY: Right. And of course, we don't know that he did. He is saying very plainly through his lawyer, I didn't do this. I'm innocent. He's says he's going to fight it, so let's give the presumption of innocence. in terms of why he might have, I can only speculate. I hate to do so, but I know you'll twist my arm so I will.

Let's suppose there was something that he did had done that was not at all criminal but he that was embarrassed about or that was -- that he didn't like to talk about. That might cause him to do it. For example, it is not illegal -- very important to understand -- to discredit somebody like Joe Wilson.

The Clinton administration discredited all it's critics all the time. Nothing illegal about that. Maybe he didn't want to say he was doing that. A very important part of the question is -- and, again, I just don't know the answer. If Scooter Libby knew that she worked at the CIA -- I assume that if Valerie Plame worked there, he did -- did he know that he wasn't allowed to tell that to anybody?

Again, he should have, I suppose. But did he? Was he in a trap where he couldn't say anything about her but he was dying to say to somebody, look, the story that Cheney, my boss, sent this guy Wilson to Africa is a lie. He didn't send him. And I know how he got to go there. His wife did it, and she works at the CIA. So he might have been trying to cover up something that wasn't a crime but that was maybe wrong or maybe embarrassing.

COLLINS: Certainly. Certainly. As you say, a lot of mysteries tonight. We'll have to wait to see what happens after the indictment. Cliff May from Washington tonight. Thank you.

MAY: Thank you, Heidi.

(COMMERCIAL BREAK)

COLLINS: It's a safe bet that the lights at 1600 Pennsylvania Avenue won't be going off anytime soon tonight, and maybe won't be going off at all. CNN's Suzanne Malveaux has more on the mood at the White House.

(BEGIN VIDEOTAPE)

SUZANNE MALVEAUX, CNN CORRESPONDENT (voice-over): The cloud that has been hanging over the Bush administration for nearly two years from the CIA leak investigation finally broke. Scooter Libby was a trusted member of Mr. Bush's most inner circle, but the five-count indictment of Vice President Cheney's chief of staff is not the end of the probe.

KARL ROVE, DEPUTY CHIEF OF STAFF: I'm going to have (INAUDIBLE).

MALVEAUX: Karl Rove, the president's top political adviser, escaped indictment today, but his lawyer says he remains under investigation.

PATRICK FITZGERALD, SPECIAL COUNSEL: I will not end the investigation until I can look anyone in the eye and tell them that we have carried out our responsibility sufficiently.

MALVEAUX: A beleaguered Mr. Bush, departing for his Camp David retreat, tried to soften the blow.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: While we're all saddened by today's news, we remain wholly focused on the many issues and opportunities facing this country. I've got a job to do; so do the people who work in the White House.

MALVEAUX: Following the indictment, Libby submitted his resignation letter to White House Chief of Staff Andy Card, who notified the president. Then Libby left. White House insiders say they are saddened by Libby's departure, but are relieved that Rove seemed to have been spared.

Cheney, who stuck to his schedule of fund raising and rallying Georgia troops, said in a written statement he accepted his top lieutenant's resignation with deep regret.

"Scooter Libby is one of the most capable and talented individuals I have ever known. He has given many years of his life to public service and has served our nation tirelessly and with great distinction."

BUSH: I look forward to working with Congress on policies to keep this economy moving.

MALVEAUX: For President Bush, the strategy is to pivot towards his political agenda.

AMY WALTER, COOK POLITICAL REPORT: The first-term Bush White House was marked by incredible focus and discipline. That has certainly been waning in the second term. The question now is, can this White House get that famous first-term focus back? That is the real challenge.

KEN DUBERSTEIN, FORMER WHITE HOUSE CHIEF OF STAFF: Certainly he needs some fresh blood. He needs to focus on big, bold things.

(END VIDEOTAPE)

MALVEAUX: And president Bush of course has a lot at stake here when it comes to this leak investigation. We're told he kept a very close eye on it. He watched about 20 minutes of the press conference, Fitzgerald's press conference, from the dining room, we're told, and also two very important things happened here at the White House. Two memos going out, one from Chief of Staff Andy Card to all the staffers, reminding them that their top job, top priority, of course, is tending to the American people's business. The second one, a memo from the White House counsel's office, that of course instructing White House staff not to talk to Scooter Libby when it comes to anything regarding this investigation -- Heidi.

COLLINS: Interesting. Suzanne Malveaux, from the White House. Thank you.

No question, Scooter Libby's resignation has serious consequences for President Bush's administration, but then, so has everything Libby has done from day one of this presidency.

(BEGIN VIDEOTAPE)

COLLINS (voice-over): In a town where influence is everything, few wielded more than I. Lewis "Scooter" Libby.

TOM MANN, BROOKINGS INSTITUTION: Scooter Libby in my view is the second most powerful staff member in the white house, second only to Karl Rove.

COLLINS: Chief of staff for perhaps the most powerful vice president ever to serve, Libby was involved in virtually every major national security decision in the White House, including the war in Iraq.

DICK CHENEY, VICE PRESIDENT OF THE UNITED STATES: Mr. Libby, Lewis Libby, Scooter, as we call him, has been an old friend of mine. He worked for me in the Pentagon, did a superb job for me when I was secretary of defense. COLLINS: Working in the Pentagon under the first President Bush and during the first war in Iraq shaped both Libby's and Cheney's view of the world.

JIM VANDEHEI, WASHINGTON POST: They have both been among the strongest supporters inside this White House of going to war in Iraq, of toppling Saddam Hussein. They always have seen him as central in this war on terrorism.

COLLINS: Upset Saddam Hussein was left in power after the first Gulf War, according to published reports, Libby co-authored a paper arguing the U.S. alone, if necessary, should use preemptive force to deter other nations from developing weapons of mass destruction. His argument later found its way into President Bush's national security strategy.

Still, the administration needed to convince the public that Saddam was a direct threat to the U.S. Libby played a role there, too. As part of the so-called White House Iraq Group, charged with devising strategies to explain to the public why the war in Iraq was necessary.

(END VIDEOTAPE)

COLLINS: As the White House begins to circle the wagons, exactly what kind of damage control can we expect? Our next guest has held the same job as Scooter Libby, but in a different administration. Roy Neel was chief of staff to former Vice President Al Gore. He's joining me now tonight from Washington, D.C. Thank you for being here, sir.

You were the chief of staff for Vice President Gore, as we've said. Tell us what the White House is doing right now. What sort of strategy or crisis management are they trying to work with?

ROY NEEL, FORMER GORE CHIEF OF STAFF: Well, they have obviously been in kind of a bunker state of mind for some time now. And I think this will be to a certain kind of perverse sense, a bit of a relief to have this part behind them.

But they're going to have to continue to try to change the subject. The president and the vice president were doing that day, and I think we are going to be hearing a lot more about other things; one, to make it look like they're working on important issues, that they're not affected by this. But clearly, this is going to hang over this White House for a long time, and it could even immobilize the vice president's office. He will be without his top adviser and in fact, a serious player in his own right, Scooter Libby, in executing the Iraq sales policy now.

So this is going to have a long-term effect. It is not going to be over for quite some time.

COLLINS: How does the indictment affect the White House moving forward, though, I mean? If they were to turn their attention to other issues, how do they make things better? NEEL: Well, the one problem they have is that the investigation is ongoing, and we're going to have a trial of Scooter Libby sometime in the future. So they have to do those things. They have to try to stick to the essential things that they think are important. They need to keep a very tight discipline within the White House. They're in a very vulnerable stage right now being in this bunker, with people talking, people worrying about their own rear guard. There may be White House shakeups now, so that's going to have everybody paranoid there. And so it's not an easy time to be in the White House right now.

COLLINS: Again, as we have mentioned, we have you on tonight because you held the same office as Scooter Libby. So tell us if anything makes this vice president's office different from that of other administrations?

NEEL: Well, primarily because we have a war, the vice president and Scooter Libby, with Donald Rumsfeld and Paul Wolfowitz, were central in devising the Iraq invasion strategy and in selling this war to the American people.

Now, the jury is still out possibly, but it looks now like it's a failed policy. So you have one of the central architects that basically has been pulled out of the picture and is under the cloud of an indictment. So we have never had anything like this for a senior White House staffer in the past, playing such a central role in the execution of policy.

White House staff tend to be primarily advisers to the president, the vice president and so on. But now we have a case where we have someone in Scooter Libby's case is almost a principle, almost a cabinet member in the execution of this policy. So that's very different than in past administrations.

And on top of that, you have the vice president himself, who is arguably the national security czar, and is basically responsible for the execution of all these policies as well.

COLLINS: All right, Roy Neel, we appreciate your time tonight. Thank you.

NEEL: Thank you.

COLLINS: Coming up, it's not the name on his birth certificate, so why is he called Scooter anyway, and what exactly does the I. stand for?

(BEGIN VIDEO CLIP)

COLIN POWELL, FORMER SECRETARY OF STATE: Leaving Saddam Hussein in possession of weapons of mass destruction for a few more months or years is not an option, not in a post-September 11th world.

(END VIDEO CLIP)

COLLINS: Also tonight, connecting the dots. How the administration's flawed case for the war led to the grand jury investigation.

(COMMERCIAL BREAK)

COLLINS: Richard Clarke has advised four presidents, including George W. Bush, on national security issues. He was the counter- terrorism adviser on the U.S. Security Council when the September 11th attacks occurred. He talks about todays indictment with Wolf Blitzer on THE SITUATION ROOM.

(BEGIN VIDEO CLIP)

RICHARD CLARKE, FMR. U.N. COUNTER-TERRORISM ADVISER: I think there are two reactions.

One is you have to realize that this is a personal tragedy for Scooter and his family. Whatever else is going on. That is going on.

And Scooter Libby didn't come to Washington to do something wrong. He came here giving up what could have been a lucrative law career to help the nation.

Now something happened along the way, and I'm not going to be the judge of that. But, it is tragic, what's happening to him personally.

(END VIDEO CLIP)

COLLINS: And a few days ago, I spoke with Richard Clarke about scandals in the White House. Here's what he had to say.

(BEGIN VIDEO CLIP)

CLARKE: Whose ever is in power there people are dragged through the mud.

And we just have to find a way of not doing this every time we have somebody in the White House, of trying to drag them down and drag their people down in a criminal process. There has to be a political way, a political process, based on argument and facts and debate not on criminal charges and mud slings.

(END VIDEO CLIP)

COLLINS: A look now at your world in 360.

Anti Israel demonstrators filled the streets of Tehran today. The Iranian president was among them. He remains defiant about his widely condemned calls for the destruction of Israel earlier this week.

Millions of Iranian turned out for state sponsored rallies across the country. The last Friday of Ramadan is observed annually as Jerusalem day.

Tropical storm Beta still threatening a small island off of Nicaragua tonight. The storm gave a near miss to San Andreas, a big relief for hundreds of people expecting worse there. The storm is still on track to become the 13th hurricane in the Atlantic this season. It is expected to hit Nicaragua as a Cat 2 hurricane on Sunday.

North Korean Leader Kim Jong Il is ready to take part in new rounds of talks on the Pyongyang Nuclear Program next month. That's according to Chinese television reports.

China's president is on a rare personal visit to the North Korean capital to press for disarmament. He has reportedly received assurances from Kim Jong Il that he is, quote, "committed to a nuclear free of Korean Peninsula."

Erica Hill joining us now, once again with some of the other top stories we are following tonight.

Hi, Erica.

HILL: Hi, again Heidi.

We start out with some really important new for SUV owners. GM recalling 100,000 of them because the back doors could open while your on the road. The 2002 and 2003 Chevrolet Trailblazer EXT, GMC Envoy XL, as well as the 2003 Isuzu Ascender are affected.

Now, the auto maker says corrosion from the effects of bad weather can weaken the backseat latches.

Low cost airline, Song, is about to take a bow. It's bankrupt parent company, Delta Airlines, is shutting down the airline as it tries to focus on its core business.

Song will stop operating in May of next year, which, actually, could be a sweet tune for Song's competitor, Jet Blue. As its shares rise on the news.

No agreement from federal regulators today on SVC's proposed takeover of AT&T. At issue for the FCC, just what conditions, if any, should be attached to the pending deal? Another meeting is scheduled for Monday.

Stocks ending the week on an up note. Boosted by promising economic news today, including report, showed the economy did well over the third quarter, despite two hurricanes and high gas prices.

The Dow Jones up 172 to 10,402.

The Nasdaq composite gained 26 closing it just over 2,000.

While the S & P 500 finished the session at 1,198. That is up 19 points.

And, Heidi, that is going to do it for us tonight. Have a great weekend.

COLLINS: Great, you too. Thanks, Erica. Coming up on 360, former Secretary of State Colin Powell calls the charge he was made to level at the U.N., a block on his career. Does that block have Lewis Libby's fingerprints on it?

(COMMERCIAL BREAK)

COLLINS: Some would say at the heart of the Scooter Libby story is the case that the Bush administration made for invading Iraq. The special prosecutor's investigation was to determine whether Valerie Plame's name was leaked to punish her husband for criticizing the administration's war plans. President Bush made the case in his State of the Union speech that Saddam Hussein had weapons of mass destruction. None have been found. Then, Secretary of State Colin Powell made more specific claims to the U.N., claims he now describes as a "blot" on his career. CNN investigates the string of intelligence failures that led to Iraq in the "CNN PRESENTS" documentary "Dead Wrong." Here is an excerpt.

(BEGIN VIDEOTAPE)

POWELL: One of the most worrisome things that emerges from the thick intelligence file we have on Iraq's biological weapons is the existence of mobile production facilities, used to make biological agents.

UNIDENTIFIED MALE: He makes a dramatic accusation. Saddam has bio-weapons labs mounted on trucks that would be almost impossible to find.

POWELL: We have firsthand descriptions of biological...

DAVID KAY, FORMER CIA CHIEF WEAPONS INSPECTOR: In fact, Secretary Powell was not told that one of sources he was given as a source of this information had indeed been flagged by the Defense Intelligence Agency as a liar, a fabricator.

POWELL: To find even one of these...

UNIDENTIFIED MALE: Powell was also not told that the prime source, an Iraqi defector codenamed Curveball, had never been debriefed by the CIA.

LARRY JOHNSON, FORMER STATE DEPARTMENT OFFICIAL: Maybe the name of the agent wasn't alarming enough. Maybe it should have been Screwup, or, you know, a Lying Sack of Manure. Something like that. But you know, to know that you're giving the president a ticket to go to war based upon one source? At that point, you want to drag the source in and talk to him yourself.

KAY: Curveball is a case of utter irresponsibility, and a good example of how decayed the intelligence process has become.

POWELL: Leaving Saddam Hussein in possession of weapons of mass destruction for a few more months or years is not an option. Not in a post-September 11th world. UNIDENTIFIED MALE: The speech would turn out to be riddled with misleading allegations, but at the time, the press plays it as an overwhelming success.

COL. LARRY WILKERSON, COLIN POWELL'S CHIEF OF STAFF: He had walked into my office musing and he said words to the effect of, I wonder how we would all feel if we put half a million troops into Iraq and march from one corner of the country to the other and find nothing?

(END VIDEOTAPE)

COLLINS: A reminder that viewers can see the full documentary at 11:00 p.m. on "NEWSNIGHT" tonight.

Let's go ahead and find out what's coming on at the top of the hour with "PAULA ZAHN NOW." Hi, Paula.

PAULA ZAHN, CNN ANCHOR: Hi, Heidi. In just about seven minutes from now, I will be devoting a good part of our show to the fallout from today's indictment in the CIA leak investigation. Is Karl Rove off the hook? Is the vice president off the hook?

But also, what if you woke up during surgery and felt the pain but couldn't say stop? Couldn't even scream, as though you were paralyzed? It happens to thousands of people every year. What would you do? We are going to hear from a woman tonight who vividly describes what happened to her when she was right in the middle of a critical surgery. It's pretty scary stuff to hear about this over and over again, Heidi.

COLLINS: Oh, boy, that's for sure. All right, Paula, thank you.

ZAHN: Thank you.

COLLINS: Still ahead on 360, what's in a nickname? Has anyone known as Scooter ever been in this much trouble?

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

FITZGERALD: I. Lewis Libby, also known as Scooter Libby...

CHENEY: Lewis Libby, Scooter we call him.

WOLF BLITZER, CNN ANCHOR: Lewis "Scooter" Libby...

UNIDENTIFIED MALE: Scooter Libby...

BUSH: Scooter Libby.

(END VIDEO CLIP)

COLLINS: There isn't a whole lot that's funny about what happened today in our top story, but maybe the nickname of the man now charged with making false statements, perjury and obstruction of justice, his nickname. It's pretty odd, all right. And then there's that initial too.

So let's talk a little bit about Irv, who had an undeniably tough day today.

(COMMERCIAL BREAK)

COLLINS (voice-over): Irv was born in New Haven, Connecticut. His dad was a successful investment banker, and Irv went to all the best schools -- Andover, Yale and Columbia Law. He married another lawyer, and they have two children.

Irv has worked at the State Department, the Defense Department and the White House. He penned a novel about Japan in his spare time.

But no one knew his real name was Irv. No, he was not a spy. He just asked everyone to call him Scooter. Irv was his real first name, hidden by the initial I. For 20 years, his staff refused to answer the questions of what the I. stood for, but an enterprising reporter went back to Yale and found his picture in a yearbook, and his full name -- Irv Lewis Libby Jr.

As for Scooter, it's been his nickname for 54 of his 55 years. It's how his father described the way he scooted around his crib.

(END VIDEOTAPE)

COLLINS: Time to look back now, as CNN does periodically during this, its 25th anniversary. And a story and a figure in it, and what has happened in the years since the news first broke. This time, a poignant memory of a young school teacher's courage and legacy.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Challenger, go with throttle up.

UNIDENTIFIED MALE: An unforgettable moment. Space Shuttle Challenger exploding in the sky over Cape Canaveral, Florida, in 1986. Seven crew members were lost that day. Among them, Grace Corrigan's 37-year-old daughter, Christa McAuliffe, who had hoped to be the first teacher in space.

CHRISTA MCAULIFFE, CHALLENGER ASTRONAUT: I don't think any teacher has ever been more ready.

GRACE CORRIGAN, MCAULIFFE'S MOTHER: I don't think it was that we didn't understand something very horrible had happened. I think it was the fact that we didn't want to.

UNIDENTIFIED MALE: Following the tragedy, McAuliffe's parents sought to keep her memory alive, working along with Christa's alma mater, Framingham State College, the McAuliffe Center was established, honoring Christa's commitment to education. According to the center, there are 40 schools named after McAuliffe worldwide. Her legacy of education is also thriving through many scholarships and fellowships in her name.

McAuliffe's children are grown now, and her husband, Scott, remarried. Grace Corrigan lost her husband, Edward, in 1990, but she still works closely with the McAuliffe Center, in memory of her daughter.

CORRIGAN: The reason I still do it is because I feel Christa saying, hey, come on, mom, I'm not there to do it, you know. Do it for me. And I find it's been very rewarding, and I'm very proud of her.

(END VIDEOTAPE)

COLLINS: I'm Heidi Collins. CNN's prime-time coverage continues now with Paula Zahn. Hi, Paula. Have a great weekend.

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