Bush-NSA Spying in Defiance of Congress, Court

By Jason Leopold
t r u t h o u t | Investigative Report

The Bush administration was publicly admonished by a senate committee, and a special surveillance court, in two separate instances for repeatedly trying to skirt the law in obtaining top-secret warrants to spy on American citizens suspected of having ties to terrorists. Despite the public rebuke, President Bush circumvented the judicial process and secretly authorized the National Security Agency to spy on thousands of individuals in the United States in defiance of the very court that issued a legal opinion saying the administration was already infringing on civil liberties in other domestic spy cases.

Securing top-secret surveillance warrants from a special court after 9/11 was proving to be hugely problematic for the Justice Department, and led a senate committee to issue an extraordinary report more than two years ago criticizing federal law enforcement officials for failing to properly follow routine guidelines in their efforts to obtain warrants for eavesdropping on Americans suspected of having ties to terrorists.

The Senate Judiciary Committee report issued in February 2003 may help explain why President Bush authorized the National Security Agency to spy on Americans without seeking prior approval from the Foreign Intelligence Surveillance Court, which for more than two decades has handled domestic spying activities.

The report singled out the FBI, and said the bureau's agents, whose job it is to obtain the surveillance warrants from the special court to collect intelligence information in the fight against terrorism, were inadequately trained in important aspects of not only the procedures to obtain warrants to spy on Americans under the Foreign Intelligence Surveillance Act (FISA), "but also fundamental aspects of criminal law."

The recent discovery of the NSA surveillance program caused a backlash against the administration by the legal community and led a judge who sits on the Foreign Intelligence Surveillance Court to resign in protest two weeks ago. The surveillance court, established by Congress in 1978 to grant warrants in terrorism and espionage cases, said it wants the Bush administration to explain why it bypassed the court and ordered eavesdropping without warrants.

Details in the 2003 senate committee report may offer an explanation. The report cited numerous problems associated with the way some officials in the Bush administration interpreted the FISA law, found a "breakdown of communication among all those involved in the FISA application process," and noted that "most disturbing is the lack of accountability that has permeated the entire application procedure."

"In fact, the bureaucratic hurdles erected by Headquarters (and DOJ) not only hindered investigations but contributed to inaccurate information being presented to the FISA Court, eroding the trust in the FBI of the special court that is key to the government's enforcement efforts in national security investigations," the report states.

President Bush and Attorney General Alberto Gonzales have said over the past few weeks that the court process was cumbersome. Still, since 9/11, the administration requested and received approval for more than 5,000 special warrants to monitor personal email accounts and conduct top-secret wiretaps of people believed to be al-Qaeda associates, according to public documents contradicting the president and attorney general's claims that the court moved too slowly in some cases.

Bush tried to explain the reasons the administration may seek approval from the special court to eavesdrop on a suspected terrorist and why, in some cases, the NSA conducts its own surveillance absent a warrant. At a December 19 press conference at the White House, he said the administration still seeks FISA warrants "for long-term monitoring," but needs the flexibility of the NSA program.

Bush said, "This is a different era, a different war.... People are changing phone numbers and phone calls, and they're moving quick. And we've got to be able to detect and prevent ... it requires quick action."

But the surveillance court has rejected just five of the nearly 19,000 requests for warrants it has received since 1979 and the warrants can be applied retroactively, meaning that the administration can begin a domestic spy operation and take up to 15 days to file a warrant request with the court.

President Bush says he has the legal authority to authorize the National Security Agency to continue eavesdropping on citizens and monitoring emails without judicial oversight, but many Democratic and Republican lawmakers are questioning whether the president violated the law in doing so.

The surveillance court has also questioned the legality of Bush's actions. The Justice Department's attempts to broaden the FBI's spying abilities after 9/11 became (such) a major concern for the surveillance court that in May 2002 it secretly ordered Attorney General John Ashcroft to scale back the plans to expand the FBI's powers because it infringed on civil liberties, according to a May 17, 2002 Foreign Intelligence Surveillance Court document.

After the Patriot Act was first approved in 2001 and a key 2002 court decision dismantled the legal wall separating the FBI's criminal and intelligence probes, the sharing of information became easier and the use of FISA warrants increased.

Ashcroft is credited with breaking down the wall that former Attorney General Janet Reno had erected in the mid-1990s that separated intelligence-gathering investigations and criminal probes to safeguard against unnecessary invasion of privacy. Federal investigators were incensed by Reno's plan, which said that intelligence agents cannot share information with criminal prosecutors, who have to meet higher legal standards to be granted warrants to conduct wiretaps and searches.

But in March 2002, Ashcroft presented a plan to the FISA court that would allow criminal prosecutors to participate in intelligence operations in the fight against terrorism. The May 17, 2002 surveillance court ruling reined Ashcroft in, and said that he overstepped his authority by loosening the rules governing intelligence gathering. Specifically, the court said Ashcroft's plans "are NOT reasonably designed" to safeguard privacy rights.

"The 2002 procedures appear to be designed to amend the law and substitute the FISA [i.e. the less demanding intelligence surveillance standards] for Title III electronic surveillances [i.e. the more demanding law enforcement standards]. This may be because the government is unable to meet the substantive requirements of these law enforcement tools, or because their administrative burdens are too onerous," the court document says.

The Senate Judiciary Committee also had concerns. The committee met privately with Ashcroft and other Justice Department officials after the Patriot Act was signed into law by President Bush on October 26, 2001. That's when Ashcroft had started to press Congress to make additional changes to FISA requirements, including changing the definition of "foreign power" to include "individual, non-U.S. persons engaged in international terrorism."

"DOJ explained that this proposal was to address the threat posed by a single foreign terrorist without an obvious tie to another person, group, or state overseas. Yet, when asked to 'provide this Committee with information about specific cases that support your claim to need such broad new powers,' DOJ was silent in its response and named no specific cases showing such a need, nor did it say that it could provide such specificity even in a classified setting," the Senate Judiciary Committee report states.

"In short, DOJ sought more power but was either unwilling or unable to provide an example as to why," the report added.

Part of the reason the FISA court refused to allow the Justice Department to expand its intelligence gathering operations goes back to the Clinton administration. In the court's May 17, 2002 opinion, it said there were more than 75 cases where "FISA applications related to major terrorist attacks directed against the United States" contained errors or false information.

Ashcroft appealed the decision. In November 2002, the court of review reversed the FISA court's decision and granted Ashcroft the broad powers he had originally sought. Still, even with the additional spying powers that now made it even easier to obtain surveillance warrants, President Bush continued to end-run the system and use the NSA to spy on Americans.

This past June, the Justice Department once again sought to broaden the scope of the Patriot Act by giving the FBI even more powers, specifically allowing the agency to bypass the FISA court if it uncovered an immediate threat to national security, which is exactly what President Bush said was the reason he had bypassed the FISA court and used the FBI to spy on Americans previously.

The FBI suggested under those extraordinary circumstances that Congress should amend the Patriot Act to provide the FBI with the authority to issue its own subpoenas without prior approval from a court. This would allow it to obtain documents, such as emails and phone records, from individuals who may have ties to terrorist groups. The FBI argued that requesting approval from a court such as the FISA court might result in an "unacceptable delay" and further threaten national security.

But in a June 17 report, the Senate Intelligence Committee said there was no reason to change the Patriot Act to grant the FBI more authority than it already possesses since the FBI could not produce any evidence where national security would be further threatened by a court taking too long to approve warrants or subpoenas.

"When testifying before the Committee, the FBI could not document significant past or current instances when national security investigations faltered or were hindered due to lack of an administrative subpoena authority," the report says. "The FBI argued that such a circumstance could exist in the future when immediacy might dictate moving quickly with a subpoena for records without prior judicial review. This may be true, but based on both demonstrated and anticipated need, the use of any such authority without prior review should be the exception, not the rule."

The committee report added that federal law enforcement officials should continue to seek approval for obtaining records from the FISA court because the court provides an "important check against potential abuse in the investigative process." Circumventing the court "effectively puts the court out of business," and "puts the current subpoena authority of the court in the hands of the investigators."

"This is not necessary, justified, or wise," the report states.

Rice authorized National Security Agency to spy on UN Security Council in run-up to war, former officials say

By Jason Leopold

President Bush and other top officials in his administration used the National Security Agency to secretly wiretap the home and office telephones and monitored private email accounts of members of the United Nations Security Council in early 2003 to determine how foreign delegates would vote on a U.N. resolution that paved the war for the U.S.-led war in Iraq, NSA documents show.

Two former NSA officials familiar with the agency's campaign to spy on U.N. members say then-National Security Adviser Condoleezza Rice authorized the plan at the request of President Bush, who wanted to know how delegates were going to vote. Rice did not immediately return a call for comment.

The former officials said Defense Secretary Donald Rumsfeld also participated in discussions about the plan, which involved "stepping up" efforts to eavesdrop on diplomats.

A spokeswoman at the White House who refused to give her name also would not comment, and pointed to a March 3, 2003 press briefing by former White House press secretary Ari Fleischer when questions about U.N. spying were first raised.

"As a matter of long-standing policy, the administration never comments on anything involving any people involved in intelligence," Fleischer said. "So I'm not saying yes and I'm not saying no."

Disclosure of the wiretaps and the monitoring of U.N. members' email came on the eve of the Iraq war in the British-based Observer. The leak -- which the paper acquired in the form of an email via a British translator -- came amid a U.S. push urging U.N. members to vote in favor of a resolution that said Iraq was in violation of U.N. resolution 1441, asserting that it had failed to rid the country of weapons of mass destruction.

News of the NSA spying on the U.N. received scant coverage in U.S. newspapers at the time. But with the explosive domestic spying report published in the New York Times last week, a closer examination of pre-war spying may shed light on whether the Bush administration has used the NSA for its own political purposes, as opposed to tracking down communications regarding potential terrorist threats against the U.S.

The leaked NSA email detailing the agency's spy tactics against the U.N. was written Jan. 31, 2003 by Chief of Staff for Regional Targets Frank Koza. In the email, Koza asked an undisclosed number of NSA and British intelligence officials to "pay attention to existing non-UN Security Council Member UN-related and domestic comms (home and office telephones) for anything useful related to Security Council deliberations."

One intelligence source who spoke to RAW STORY said top White House officials and some Republican members of Congress had debated in December 2002 whether to step up the surveillance of U.N. officials to include eavesdropping on home telephone and personal email accounts. Some feared that in the event it was discovered, it would further erode relations between the U.S. and the U.N.

The source added that U.S. spying on the U.N. isn't new.

"It's part of the job," the intelligence source said. "Everyone knows it's being done."

Eavesdropping on U.N. diplomats is authorized under the U.S. Foreign Intelligence Services Act. However, it's still considered a violation of the Vienna Convention on Diplomatic Relations, which says that "The receiving state shall permit and protect free communication on the part of the mission for all official purposes... The official correspondence of the mission shall be inviolable."

According to one former official, "The administration pushed the envelope by tapping their home phones."

Koza's email, a copy of which is included at the end of this report, says the "Agency is mounting a surge particularly directed at the UN Security Council (UNSC) members (minus US and GBR of course) for insights as to how to membership is reacting to the on-going debate RE: Iraq, plans to vote on any related resolutions, what related policies/ negotiating positions they may be considering, alliances/ dependencies, etc."

"The whole gamut of information that could give US policymakers an edge in obtaining results favorable to U.S. goals or to head off surprises. In RT, that means a QRC surge effort to revive/ create efforts against UNSC members Angola, Cameroon, Chile, Bulgaria and Guinea, as well as extra focus on Pakistan UN matters."

The email was sent out just four days after Blix filed his Iraq weapons report with the U.N. through a top secret surveillance network set up by the NSA, the British Government Communication Headquarters and similar intelligence agencies based in Australia, New Zealand and Canada known as Echelon.

It was leaked to a handful of media outlets in the U.S. and U.K. by Katharine Tersea Gun, a former translator for British intelligence. Gun was arrested in November 2003 and charged with violating her country's Official Secrets Act. She said she felt compelled to leak the memo because she believed the U.S. and Britain were about to launch an illegal war.

"Any disclosures that may have been made were justified on the following grounds: because they exposed serious illegality and wrongdoing on the part of the U.S. Government who attempted to subvert our own security services and, to prevent wide-scale death and casualties among ordinary Iraqi people and UK forces in the course of an illegal war," she said in a statement at the time.

In his book "Plan of Attack," Bob Woodward, deputy managing editor of the Washington Post, said the administration was also spying on Hans Blix, the U.N. weapons inspector sent to Iraq to look for WMDs.

"One of the things that's gone unnoticed is national intelligence assets spying on Hans Blix," Woodward told the Council on Foreign Relations on June 9, 2004 "And Bush was getting these reports and felt that there was incongruity between what Blix was saying publicly and what he was actually doing. It makes it very clear we were wiretapping Hans Blix."

In an article for Counterpunch, media critic Norman Solomon noted that the U.S. media barely covered the U.N. spying.

"Nearly 96 hours after the Observer had reported it, I called Times deputy foreign editor Alison Smale and asked why not," Solomon writes. "'We would normally expect to do our own intelligence reporting,' Smale replied. She added that 'we could get no confirmation or comment.' In other words, U.S. intelligence officials refused to confirm or discuss the memo -- so the Times did not see fit to report on it."

The Washington Post printed a 514-word article on a back page with the headline "Spying Report No Shock to U.N," while the Los Angeles Times emphasized from the outset that U.S. spy activities at the United Nations are "long-standing," Solomon wrote.

Solomon says his research turned up only one story which took the spying seriously -- a Mar. 4, 2003 piece in the Baltimore Sun.

The leaked NSA email which revealed the spying follows.

#

To: [Recipients withheld] From: FRANK KOZA, Def Chief of Staff (Regional Targets) CIV/NSA Sent on Jan 31 2003 0:16 Subject: Reflections of Iraq Debate/Votes at UN-RT Actions + Potential for Related Contributions Importance: HIGH Top Secret//COMINT//X1 All, As you've likely heard by now, the Agency is mounting a surge particularly directed at the UN Security Council (UNSC) members (minus US and GBR of course) for insights as to how to membership is reacting to the on-going debate RE: Iraq, plans to vote on any related resolutions, what related policies/ negotiating positions they may be considering, alliances/ dependencies, etc - the whole gamut of information that could give US policymakers an edge in obtaining results favorable to US goals or to head off surprises. In RT, that means a QRC surge effort to revive/ create efforts against UNSC members Angola, Cameroon, Chile, Bulgaria and Guinea, as well as extra focus on Pakistan UN matters. We've also asked ALL RT topi's to emphasize and make sure they pay attention to existing non-UNSC member UN-related and domestic comms for anything useful related to the UNSC deliberations/ debates/ votes. We have a lot of special UN-related diplomatic coverage (various UN delegations) from countries not sitting on the UNSC right now that could contribute related perspectives/ insights/ whatever. We recognize that we can't afford to ignore this possible source. We'd appreciate your support in getting the word to your analysts who might have similar, more in-direct access to valuable information from accesses in your product lines. I suspect that you'll be hearing more along these lines in formal channels - especially as this effort will probably peak (at least for this specific focus) in the middle of next week, following the SecState's presentation to the UNSC. Thanks for your help

#

Leak Probe Likely Won't End Following Rove Inquiry

By Jason Leopold

Special Prosecutor Patrick Fitzgerald is not expected to shut down his investigation into the leak of covert CIA officer Valerie Plame Wilson when he finishes his inquiry of White House Deputy Chief of Staff Karl Rove's role in the leak, lawyers close to the probe said.

These sources indicated that if a grand jury returns an indictment against Rove it will include -- at the very least -- a charge that he made false statements to Justice Department and FBI investigators when he was first interviewed about his role in the case in October 2003.

Individuals close to the probe say Fitzgerald is still investigating other unnamed White House officials. This part of the investigation, like that of Rove, is focusing on whether these officials committed perjury, obstruction of justice or lied to federal investigators during the early days of the investigation -- as opposed to violating an obscure law which makes it a crime to knowingly leak the name of an undercover CIA operative -- they say.

When Fitzgerald announced the five-count indictment against I. Lewis "Scooter" Libby, Vice President Dick Cheney's former chief of staff who is accused of perjury and obstruction for his role in the leak, he said the bulk of his investigative work had been completed. Shortly thereafter, however, he convened another grand jury. According to those close to the probe, the prosecutor plans to use the jury well into next year to determine if other officials played a role in the leak and whether any laws were broken.

The second grand jury hearing evidence in the case convened for the first time earlier this month. Their term expires in 18 months.

The investigation is expected to shift back to top officials in the Office of the Vice President, the State Department and the National Security Council, and may even shed some light on the genesis of the Niger forgeries, lawyers close to the case say. The forged documents, cited in President Bush's 2003 State of the Union address, claimed Iraq sought yellowcake uranium from the African country. It may also reveal how key players in the White House decided to expose Plame's undercover status and top secret front company, Brewster Jennings.

Separately, these people said, the FBI's renewed interest in probing the Niger forgeries grew out of Fitzgerald's probe.

A court filing posted on Fitzgerald's website in October revealed that when the prosecutor subpoenaed New York Times reporter Judith Miller, he had already decided to pursue flawed intelligence the Bush administration used to build support for the Iraq war. Miller was jailed 85 days for refusing to disclose who had told her about Plame.

"On August 12 and August 20, 2004, grand jury subpoenas were issued to reporter Judith Miller and her employer, the New York Times, seeking documents and testimony related to 'conversations between Miller and a specified government official occurring between on or about July 6, 2003 and on or about July 13, 2003, concerning Valerie Plame Wilson (whether referred to by name or by description) or concerning Iraqi efforts to obtain uranium,'" the filing states.

More than two dozen people from the White House have been interviewed or testified before the grand jury since Fitzgerald was tapped to lead the investigation two years ago. Some of those people, who sources close to the case would only say were "senior level," have cooperated with the prosecutor in exchange for immunity related to their role in the case. No plea deals have been entered into with any official, they added.

"Mr. Fitzgerald has secured the cooperation of certain individuals who faced the possibility of being prosecuted," one attorney close to the case said. "That's all I'm going to say."

One of those individuals may be an unnamed State Department official cited in a Sept. 28, 2003 Washington Post story. The official told the Post that six journalists were called and told about Plame Wilson's undercover status in an attempt to discredit her husband, former Ambassador Joseph Wilson, a critic of the Bush administration's prewar Iraq intelligence who challenged the veracity of the uranium claim. Wilson debunked the administration's claims after being sent to Niger a year earlier to investigate the allegations.

The unnamed State Department official cited in the Post story appears to have intimate knowledge of the campaign to discredit Wilson. He also appears to have been sympathetic to the former ambassador.

The Associated Press also quoted an unnamed retired State Department official who told them of a Department memo describing Plame's alleged role in sending her husband to Africa and disputed the legitimacy of administration claims that Iraq sought to acquire uranium.

Sources close to the probe said the State Department official referenced in both stories is the same, and has been providing the special counsel with crucial evidence against certain White House officials for the past two years.

Daniel Richman, a law professor at Fordham University and former federal prosecutor who at one time worked with Fitzgerald, said in high-profile white collar cases it is very rare that a prosecutor will say, "We're done. We’ve got everything we need."

"There are very few definitives," Richman said. "It is rare to give a certification of innocence or to make a public declaration that the case is over," particularly while a grand jury's term has not expired.

Richman said he is not surprised Fitzgerald would be continuing his investigation into the leak.

"It is entirely normal not to have a clear end point," he said. "However, because there are so many individuals in government whose jobs may be at stake for their roles in the Plame leak, Fitzgerald could decide to announce an end to the investigation publicly so those people know that they are no longer under any scrutiny."

Richman said he thinks that any government official who faced criminal exposure in the case would be cooperating.

"But it's difficult to have a good sense whether that's the case because Mr. Fitzgerald has closely guarded the grand jury proceedings," he said. "What that means is that the case could be ongoing, petering out or revving up. It all depends on what he has now."

The Case against Karl Rove

By Jason Leopold
t r u t h o u t | Investigative Report

Special Prosecutor Patrick Fitzgerald met with the second grand jury investigating the leak of covert CIA agent Valerie Plame Wilson for several hours Friday. Unless Rove's attorney intervenes at the 11th hour yet again, Fitzgerald is expected to ask the grand jury to indict Rove - at the very least - for making false statements to the FBI and Justice Department investigators in October 2003, lawyers close to the case say.

People close to Fitzgerald say the special prosecutor has long believed that Rove's story concerning his role in the Plame case, as well as what he knew and when he knew it, is filled with holes. One thing Fitzgerald has been struggling with for months now, these people say, is whether to believe Rove hid or destroyed evidence that would have incriminated him and proven that he was a source for at least two reporters who unmasked Plame Wilson's identity and covert status, lawyers close to the case said.

Fitzgerald's suspicions about the possibility of evidence destruction arose just a few weeks after he took over the probe in early 2004. By then, he had already believed Rove and Vice President Dick Cheney's then-chief of staff I. Lewis "Scooter" Libby - who was indicted on five counts of perjury and obstruction of justice as a result of his failure to disclose to the first grand jury his true role in the Plame Wilson leak - were hindering his investigation, lawyers close to the case said.

His suspicions may have been right: An email Rove sent to then-Deputy National Security Adviser Stephen Hadley in early July 2003 later proved Rove had spoken to Time magazine reporter Matthew Cooper about Plame - a fact that Rove omitted when he was first interviewed by the FBI and during his first grand jury testimony in February 2004.

So, in late January 2004, Fitzgerald sent a letter to his boss, then-acting-Attorney General James Comey, seeking confirmation that he had the authority to investigate and prosecute individuals for additional crimes, including obstruction of justice, perjury and destroying evidence. The leak investigation had been centered up to that point on an obscure law making it a felony for any government official to knowingly disclose the identity of an undercover CIA officer.

Comey responded to Fitzgerald in writing on February 6, 2004, confirming that Fitzgerald had the authority to prosecute those crimes, including "perjury, obstruction of justice, destruction of evidence, and intimidation of witnesses."

The same day Fitzgerald received the response letter from Comey, the White House faced a deadline of turning over administration contacts with 25 journalists to the grand jury investigating the leak. One of the journalists cited in the subpoena was Cooper, who had been called to the White House on January 22, 2004. Three months earlier, in late 2003, then-White House counsel Alberto Gonzales enjoined all White House staff to turn over any communication about Valerie Plame Wilson and her husband, former ambassador, Joseph Wilson, a vocal critic of the Iraq war who accused the Bush administration of twisting pre-war Iraq intelligence. Gonzales's directive came 12 hours after senior White House officials had been told of the pending investigation. The email Rove sent to Hadley, which specifically cited "Matt Cooper from Time," never turned up in that initial request either, people close to the investigation said.

It's unknown whether Hadley, who was also required to comply with the subpoena and the Gonzales order, turned over the email to Fitzgerald or to Justice Department and FBI investigators some three months earlier. If he did, Fitzgerald knew of its existence all along even while Rove, for nearly a year, was not being forthcoming with Fitzgerald or the grand jury. If, in addition to Rove, Hadley also failed to locate and turn over the email, it raises more questions about his own role in the matter. Hadley was interviewed by investigators to determine if he was involved in the leak, but has so far not entertained questions about his role, if any.

Besides Cooper, other journalists cited in the January 22, 2004 subpoena include: Robert Novak, who was first to publish Plame Wilson's name and undercover CIA status in his column, and who counted Rove as one of his two anonymous sources regarding Plame Wilson; Knut Royce and Timothy M. Phelps from Newsday; Walter Pincus, Richard Leiby, Mike Allen, Dana Priest and Glenn Kessler from The Washington Post; John Dickerson, Massimo Calabresi, Michael Duffy and James Carney from Time magazine; Evan Thomas from Newsweek; Andrea Mitchell from NBC’s "Meet the Press;" Chris Matthews from MSNBC’s "Hardball;" Tim Russert and Campbell Brown from NBC; Nicholas D. Kristof, David E. Sanger and Judith Miller from The New York Times; Greg Hitt and Paul Gigot from The Wall Street Journal; John Solomon from The Associated Press; and Jeff Gannon from Talon News.

Neither Hadley nor Rove's attorney, Robert Luskin, responded to repeated requests for comment.

The weeks leading up to Rove's February 2004 grand jury testimony - the time frame when Fitzgerald became increasingly concerned about officials possibly trying to obstruct his probe - has turned out to be crucial for Rove, and may be the deciding factor in whether or not he is indicted, lawyers close to the case said.

When Rove testified before Fitzgerald's grand jury that month he did not reveal that he had been a source for Cooper and Robert Novak, both of whom wrote stories on Plame Wilson on July 14, and July 17, 2003, respectively. Instead, Rove said he had shared information about Plame Wilson with other journalists - including Chris Matthews, the host of MSNBC's “Hardball” - but only after her name had appeared in Novak's column, people familiar with his grand jury testimony said.

In a bid to keep Rove out of Fitzgerald's crosshairs, Robert Luskin, Rove's attorney, stepped up recently and told Fitzgerald that Rove had truly forgotten about his conversation with Cooper, but Luskin jogged his memory thanks to a tip he says he received from Cooper's Time colleague, Viveca Novak (no relation to the conservative columnist Robert Novak). Hours before Libby's indictment in October, Luskin told Fitzgerald that he had gone for drinks with Novak in February 2004 - to be exact - and she had inadvertently revealed that the buzz inside Time magazine was that Rove had been a source for Matt Cooper's story on Plame Wilson.

Luskin told Fitzgerald that Novak's tip prompted him and Rove to conduct an exhaustive search for documentary evidence to determine if Rove had spoken with Cooper. That's when the Hadley email was found, which Luskin said he promptly turned over to Fitzgerald, and which led Rove to change his testimony and disclose that he did speak with Cooper. Luskin won't say exactly when he turned that email over, or why it took Rove until October 15, 2004 to testify about his conversation with Cooper.

Luskin's story forced Fitzgerald to depose him on December 2, 2004. He testified under oath that he had gone for drinks with Novak in late January or early February 2004, the very month in which Fitzgerald had sought the authority to prosecute officials if they were found to have hindered his investigation into the leak.

Novak, however, who testified a week later, has a different story. She testified that she met Luskin in either March or May 2004, lawyers close to the case said. This discrepancy is at the crux of what Fitzgerald is investigating.

According to those familiar with the case, in February 2004 Fitzgerald had already obtained the cooperation of a key witness, former-Deputy National Security Adviser for Vice President Dick Cheney, John Hannah. Hannah agreed to cooperate with Fitzgerald when the special prosecutor uncovered evidence tying him to the leak, and subsequently threatened to indict him, the sources said.

Hannah gave Fitzgerald the names of some White House officials who knew about Plame Wilson and disseminated her CIA status to reporters and other White House officials, the lawyers said. One of the officials Hannah appears to have implicated was Rove, they added. Cheney promoted Hannah to be his assistant national security adviser following Libby's indictment.

Rove failed to tell investigators at the time that he had spoken about Plame to Time Magazine reporter Matthew Cooper and conservative columnist Robert Novak, both of whom later cooperated in the case. Novak outed Plame in a July 14, 2003 column.

The Chicago prosecutor briefed the second grand jury investigating the outing last week for more than three hours. During that time, he brought them up to speed on the latest developments involving Rove and at least one other White House official, the sources said. The attorneys refused to identify the second person.

As of Friday, neither Rove nor Luskin had explained Rove's misstatements to Fitzgerald's satisfaction, those familiar with the case said. The 11th-hour testimony from Viveca Novak - who Luskin pointed to as a crucial witness in keeping his client out of court - does not appear to have been helpful to Rove in dodging an indictment, they added.

Rove's alleged failure to disclose his conversations with Cooper and Novak, and the fact that he did not produce the email he sent to Hadley on two separate occasions, are the reasons he's been in Fitzgerald's crosshairs, lawyers close to the investigation said.

It may also explain why Luskin has insisted that the conversation he had with Novak took place in February, as opposed to March or May, the timeframe Novak claims is more likely. It's much more difficult to make the case that the Hadley email surfaced after Luskin and Rove did a search in March or May if Luskin happened to agree with Novak's timeframe of the meeting but Rove failed to produce the same email under the grand jury subpoena three months earlier.

Luskin has said that he found the email at the same time the White House was complying with the subpoena, but held onto it rather than turning it over to the grand jury with the batch of other similar emails, phone logs and other documents as required by the subpoena, lawyers close to the case said.

"What Luskin is doing is trying to say that he found the email after his conversation with Ms. Novak but before the White House turned over evidence of administration contacts with journalists," by the February 6, 2004 deadline, one attorney close to the case said. "He understands that it would be quite difficult to explain to the prosecutor how this email miraculously turned up in either March or May, but not in February. That's why it appears he is stating that he spoke with Ms. Novak in February."

Before Luskin brought Novak into the picture, Rove had faced the prospect of being indicted on numerous counts, including obstruction of justice, perjury and making false statements for failing to disclose his conversations with reporters about Plame Wilson, sources close to the case said. Several reporters close to Novak said they believe Luskin's decision to draw her into the case was made to keep Rove's indictment from being handed up the day Libby was charged.

Rove could be indicted on those counts if Fitzgerald determines that Novak's testimony did not go far enough in clearing up questions about why Rove did not tell investigators about his conversations with other reporters.

Her testimony could still end up shielding Rove from more serious charges, attorneys close to the case said, if Fitzgerald believes it clears up the murky questions about the reasons as to why Rove could not produce the Hadley email under the October 2003 Gonzales order or by the February 6, 2004 deadline, as stated in the grand jury subpoena delivered to the White House two weeks earlier.

---

Jason Leopold spent two years covering California's electricity crisis as Los Angeles bureau chief of Dow Jones Newswires. Jason has spent the last year cultivating sources close to the CIA leak invesigation, and will be a regular contributer to t r u t h o u t.

Rove, Hadley email 'at crux' of CIA leak investigation

By Jason Leopold

In late January 2004, the grand jury investigating whether top officials in the Bush administration knowingly leaked Valerie Plame Wilson's name and covert CIA status to reporters subpoenaed the White House for records of administration contacts with more than two-dozen journalists going back two years, to determine if any officials talked about Plame with the media.

According to people close to Special Prosecutor Patrick Fitzgerald's probe, one such document was not turned over to the grand jury by the Feb. 6, 2004 deadline: an email White House Deputy Chief of Staff Karl Rove had sent in July 2003 to then-Deputy National Security Adviser Stephen Hadley. In the email, Rove told Hadley that he spoke to Time Magazine reporter Matthew Cooper about Plame's husband, former Ambassador Joseph Wilson, a vocal critic of the administration's prewar Iraq intelligence.

Rove testified before the grand jury for the first time in February 2004. At the time, he didn't disclose that he had been one of the anonymous sources for Cooper and conservative columnist Robert Novak. The two filed the first stories on Plame, identifying her as a CIA operative.

Rove had told the grand jury, as well as FBI and Justice Department investigators, that he learned about Plame's identity after reading about her in news reports. Only then did he speak about Plame with other journalists, people familiar with his grand jury testimony said.

The grand jury subpoenaed the White House for any information concerning contacts with the 25 reporters on Jan. 22, 2004. It was the second time a directive was issued ordering White House officials to turn over records to determine if officials had spoken about Plame, her husband, and the administration's claims that Iraq had attempted to acquire uranium-the key component for a nuclear bomb-from Niger with journalists.

Three months earlier, in late 2003, then-White House counsel Alberto Gonzales enjoined all White House staff to turn over any communication about Valerie Plame Wilson and her husband. Gonzales' request came 12 hours after senior White House officials had been told of the pending investigation. The email Rove sent to Hadley never turned up in that request either, people close to the investigation said.

Rove's alleged failure to disclose his conversations with Cooper and Novak and the fact that he didn't turn over the Hadley email on two separate occasions is the reason he's been in Fitzgerald's crosshairs and may end up being indicted, people close to the investigation said.

It's also the reason Fitzgerald had grown suspicious at the time that Rove may have hid or destroyed evidence related to his role in the leak, they said, adding that Fitzgerald may have already been aware of the existence of the email, perhaps even obtaining a copy from a witness or another White House official, and waited to see if Rove would cite it or his conversations with Cooper in his grand jury testimony.

It may also explain why Rove's attorney, Robert Luskin, has reportedly testified that he had a conversation with one of Cooper's Time magazine colleagues, Viveca Novak, in February 2004. Luskin maintains that he and Novak met in February of 2004 over drinks in Washington, D.C. and Novak tipped him off that she heard Rove was Cooper's source.

By bringing Novak into the mix, Luskin came up with a defense for why Rove did not immediately recall having a conversation with Cooper. It's important for Luskin to assert that the meeting took place that month, otherwise he doesn't have a good defense for why the email he sent to Hadley wasn't found the second time.

Novak testified last week that she spoke with Luskin several times during the first half of 2004. But she did not believe she said anything to Luskin in February about Rove being Cooper's source. In her first person Time magazine account about her testimony, she wrote that she believed she told Luskin in either March or May-but most likely May-that the internal buzz at Time was that Rove was Cooper's source for his story on Plame.

Luskin testified that after he spoke with Novak, he and Rove did an exhaustive search for evidence to determine if Rove did in fact speak with Cooper about Plame. Luskin said they then found the Hadley email and turned it over to Fitzgerald.

If Luskin and Novak did meet in March or May and discuss Rove being Cooper's source it doesn't address why the Hadley email didn't turn up in January, when the White House was subpoenaed. That's why Luskin has been insistent that he and Novak met in February, people close to the case said, in order to explain how he was able to find the Hadley email just as the White House was responding to the subpoena.

Otherwise, it hurts Rove's case and makes it much more difficult for Fitzgerald and the grand jury to believe that Luskin and Rove were able to find the same email months later after speaking with Novak, people close to the case said.

Still, Rove did not testify about his conversation with Cooper until Oct. 15, 2004. It's unclear when Luskin turned over the Hadley email to Fitzgerald and why it took at best nearly six months for Rove to finally testify about his conversation with Cooper.

"What Luskin is doing is trying to say that he found the email after his conversation with Ms. Novak but before the White House turned over evidence of administration contacts with journalists," one attorney close to the case said. "He understands that it would be quite difficult to explain to the prosecutor how this email miraculously turned up in either March or May but not in January or February. That's why it appears he is stating that he spoke with Ms. Novak in February."

This discrepancy is at the crux of what Fitzgerald is investigating. Rove didn't reveal to the grand jury that he had spoken with Cooper until Oct. 15, 2004. Luskin says that Rove did not intentionally withhold information from Fitzgerald or the grand jury about his conversation with Cooper. Rather, he says Rove had simply forgotten about it, and Luskin's meeting with Novak had helped jog Rove's memory.

Luskin did not return calls for comment and did not respond to an email list of questions.

The Jan. 22, 2004 subpoena, one of three sent to the White House on Jan. 22, 2004, asked for administration contacts with 25 journalists. Those individuals are Robert Novak, "Crossfire," "Capital Gang" and the Chicago Sun-Times; Knut Royce and Timothy M. Phelps, Newsday; Walter Pincus, Richard Leiby, Mike Allen, Dana Priest and Glenn Kessler, The Washington Post; Matthew Cooper, John Dickerson, Massimo Calabresi, Michael Duffy and James Carney, Time magazine; Evan Thomas, Newsweek; Andrea Mitchell, "Meet the Press," NBC; Chris Matthews, "Hardball," MSNBC; Tim Russert, Campbell Brown, NBC; Nicholas D. Kristof, David E. Sanger and Judith Miller, The New York Times; Greg Hitt and Paul Gigot, The Wall Street Journal; John Solomon, The Associated Press; and Jeff Gannon, Talon News.

Fitzgerald was long suspicious Rove had hidden evidence; Not swayed by last minute testimony, lawyers say

By Jason Leopold and Larisa Alexandrovna

A few weeks after he took over the investigation into the leak of covert CIA agent Valerie Plame Wilson in early 2004, Special Prosecutor Patrick Fitzgerald had already become suspicious that Karl Rove and Vice President Cheney’s then-chief of staff I. Lewis “Scooter” Libby were hindering his investigation.

In late January 2004, Fitzgerald sent a letter to his boss, then acting Attorney General James Comey, seeking confirmation that he had the authority to investigate and prosecute individuals for additional crimes, including obstruction of justice, perjury, and destroying evidence. The leak investigation had been centered up to that point on an obscure law making it a felony for any government official to knowingly disclose the identity of an undercover CIA officer.

Comey responded to Fitzgerald in writing Feb. 6, 2004, confirming that Fitzgerald had the authority to prosecute those crimes, including “perjury, obstruction of justice, destruction of evidence, and intimidation of witnesses.”

Fitzgerald was concerned that Rove had hidden or destroyed evidence, lawyers close to the case tell RAW STORY. His suspicions may have been right: an email he sent to then Deputy National Security Adviser Stephen Hadley in early July 2003 later proved Rove had spoken to Time magazine reporter Matthew Cooper about Plame—a fact that Rove omitted when he was first interviewed by the FBI.

Whether or not Fitzgerald knew in late January or early February 2004 about the existence of the email Rove sent to Hadley remains unknown. The email did not show up during a search ordered by then-White House counsel Alberto Gonzales in 2003. Gonzales enjoined all White House staff to turn over any communication about Valerie Plame Wilson and her husband, former Ambassador Joseph Wilson, a vocal critic of the Iraq war who accused the Bush administration of twisting prewar Iraq intelligence. Gonzales’ request came 12 hours after senior White House officials had been told of the pending investigation.

Hadley did not respond to repeated requests for comment. Calls placed to the National Security Council were dropped by press office aides.

According to those familiar with the case and earlier reporting by RAW STORY, Fitzgerald had already obtained the cooperation of a key witness, former Deputy National Security Adviser for Vice President Dick Cheney, John Hannah. Hannah agreed to cooperate with Fitzgerald when the special prosecutor uncovered evidence tying Hannah to the leak and threatened to indict him, the sources said.

Hannah gave Fitzgerald the names of some White House officials who knew about Plame Wilson and disseminated her CIA status to reporters and other White House officials, the laywers said. One of the officials Hannah appears to have implicated was Rove, they added. Cheney promoted Hannah to be his assistant national security adviser following Libby’s indictment.

Fitzgerald still looking to indict Rove

Short of a last minute intervention by Rove’s attorney, Special Prosecutor Patrick Fitzgerald is expected to ask a grand jury investigating the outing of CIA agent Valerie Plame Wilson to indict Deputy White House Chief of Staff Karl Rove for making false statements to the FBI and Justice Department investigators in October 2003, lawyers close to the case say.

Rove failed to tell investigators at the time that he had spoken about Plame to Time Magazine reporter Matthew Cooper and conservative columnist Robert Novak, both of whom later cooperated in the case. Novak outed Plame in a July 14, 2003 column.

The Chicago prosecutor briefed the second grand jury investigating the outing last week for more than three hours. During that time, he brought them up to speed on the latest developments involving Rove and at least one other White House official, the sources said. The attorneys refused to identify the second person.

As of Monday, neither Rove nor his attorney Robert Luskin has explained Rove’s misstatements to Fitzgerald’s satisfaction, those familiar with the case said. Eleventh-hour testimony from Time Magazine reporter Viveca Novak—who Rove’s attorney Robert Luskin fingered as a crucial witness in keeping his client out of court—does not appear to have been helpful in dodging an indictment, they added.

A woman who answered the phone at Patton Boggs, the law firm where Luskin is a partner, said Luskin would not answer specific questions about the probe.

Rove is also under scrutiny for allegedly telling his assistant not to log a phone call from Cooper, the sources said. Rove’s assistant, Susan Ralston, provided Fitzgerald with information last month in which she alleged that Rove told her not to log a call from Cooper that was transferred to Rove’s office from the White House switchboard, sources close to the case said. The lawyers added that Luskin and Rove have an explanation for that as well, but declined to elaborate.

Rove’s case hangs on February 2004

Over the past few weeks, the time frame when Fitzgerald became increasingly suspicious—specifically February 2004—has become crucial for Rove. He testified before Fitzgerald’s grand jury that month without revealing he had been a source for Cooper and Novak, saying only that he had shared information about Plame Wilson with other journalists—including Chris Matthews, the host of MSNBC’s Hardball—after her name had appeared in Novak’s column.

In a bid to keep Rove out of Fitzgerald’s crosshairs, Luskin recently told Fitzgerald that he had a conversation with Time Magazine reporter Viveca Novak in February 2004 where she inadvertently revealed that Rove had been a source for her colleague Matt Cooper. Luskin said this prompted an exhaustive search for the Hadley email which was promptly turned over to Fitzgerald and led Rove to change his testimony.

Luskin testified Dec. 2 that the Novak meeting took place in late January or early February 2004, the very month in which Fitzgerald had sought the authority to prosecute officials if they were found to have hindered his investigation into the leak.

Novak, however, testified that she met Luskin in either March or May 2004, those close to the case said. This discrepancy is at the crux of what Fitzgerald is investigating. Rove didn't reveal to the grand jury that he had spoken with Cooper until Oct. 15, 2004.

Luskin has said that Rove did not intentionally withhold information from Fitzgerald or the grand jury about his conversation with Cooper. Rather, he says Rove had simply forgotten about it, and Luskin’s meeting with Novak had jogged his memory.

Before Novak testified in a sworn deposition last week, Rove faced the prospect of being indicted on numerous counts, including obstruction of justice, perjury and making false statements for failing to disclose conversations he had with reporters about Plame Wilson, sources close to the case said. Several reporters close to Novak said they believe Luskin’s decision to draw her into the case was made to keep Rove’s indictment from being handed up on the day Libby was charged.

Rove could be indicted on those counts if Fitzgerald determines that Novak’s testimony did not go far enough in clearing up questions about why Rove did not tell investigators about his conversations with other reporters. Her testimony may, however, shield Rove from more serious charges, attorneys close to the case said.

Novak (who is not related to the conservative columnist Robert Novak, the journalist who first published Plame Wilson’s name and CIA status,) is the latest in a lengthy list of longtime Washington, D.C. reporters who have become embroiled in the leak investigation, and the third to have withheld crucial information from editors about her involvement while still reporting on the story.

In a first-person account Novak posted on Time magazine’s website Sunday about her role in the case, she said she had met with Luskin, Rove’s attorney, for drinks in October 2003. Luskin asked Novak what she was working on for Time and Novak said the Plame Wilson leak.

“Well you’re sitting next to Karl Rove’s attorney,” Luskin said to her, according to Novak’s account.

The two began spending more time together and during the course of several meetings during the first half of 2004, either in March or May, Novak wrote, Luskin had told her that Rove had not been a source for Matt Cooper, Novak’s Time colleague, who had been the second reporter to write about Plame Wilson on July 17, 2003.

Novak said she inadvertently tipped Luskin off to the fact that Cooper's source was Rove. She said she sensed she was being spun by Luskin and her knee-jerk response led to her divulging information that could be used to help Rove escape serious charges.

Following his meeting with Novak, Luskin told Rove that Novak said he was Cooper’s source. Luskin and Rove then did an exhaustive search through White House phone logs and emails to find any evidence that Rove spoke with Cooper.

An email Rove sent to then-Deputy National Security Adviser Stephen Hadley just minutes after his conversation with Cooper in July 2003 turned up, and Luskin said he immediately turned it over to Fitzgerald.

Still, it’s unclear why that email wasn't found when White House counsel Alberto Gonzales ordered all White House staff in October 2003 to turn over emails and other documentary evidence that showed officials spoke with journalists. Moreover, it’s not known why Rove did not change his grand jury testimony to reflect that he had been Cooper’s source until October 2004, some six or eight months after Novak’s meeting with Luskin.

For Rove, New Testimony, New Problems

By Jason Leopold
t r u t h o u t | Report

There are unanswered questions about whether Karl Rove was truthful when he was first interviewed by FBI and Justice Department investigators in early October 2003 regarding whether he played a role in the leak of covert CIA agent Valerie Plame Wilson. According to sources close to the probe, he was not.

In that very first interview, which took place just three months after Plame Wilson's name was published in a July 14, 2003, story by conservative columnist Robert Novak in an attempt to discredit her husband, former Ambassador Joseph Wilson, a critic of the Bush administration's prewar Iraq intelligence, Rove testified that he did speak with a handful of journalists and told them about Plame Wilson and that she worked at the CIA - but only after her identity had already been made public. In fact, Rove had been one of the two "senior administration officials" cited in Novak's column confirming Plame Wilson's identity. Additionally, Rove had also been a source for Time magazine reporter Matthew Cooper, who also published Plame Wilson's name in a story three days after Novak's column - another fact President Bush's deputy chief of staff allegedly withheld from prosecutors.

Moreover, the five-count indictment handed up by a grand jury in late October against I. Lewis "Scooter" Libby, Vice President Dick Cheney's chief of staff, shows that Rove had learned of Plame Wilson's identity a month or so before Novak's column was published. Neither Rove nor his attorney, Robert Luskin, has so far clarified Rove's alleged misstatements to investigators two years ago. Those falsities, which Special Prosecutor Patrick Fitzgerald is homing in on, will likely end Rove's political future, sources close to the investigation said Thursday.

Fitzgerald prepped a second grand jury hearing evidence in the case Wednesday, spending more than three hours bringing them up to speed on the latest developments in the case, sources said. They added that Fitzgerald would not have convened another grand jury if he were not seeking additional indictments against senior officials in the Bush administration.

Last Friday, in yet another bizarre twist in the two-year-old investigation, Luskin testified in a deposition before Fitzgerald that in mid-2004 he spoke with a reporter at Time magazine named Viveca Novak, who had written about the probe for the magazine on several occasions, and that she tipped him off to the fact that Cooper's source was Rove while the two were discussing the Plame Wilson case over drinks. Following his meeting with Viveca Novak, Luskin told Rove what she had passed on to him, according to sources close to Rove, and Luskin and Rove did an exhaustive search through White House phone logs and emails to find any evidence that Rove spoke with Cooper.

An email Rove sent to then-Deputy National Security Adviser Stephen Hadley just minutes after his conversation with Cooper in July 2003 turned up, and Luskin said he immediately turned it over to Fitzgerald. Luskin said Rove didn't recall the conversation with Cooper a year earlier, and thanks to Viveca Novak's supposed tip, they were able to turn up the email to Hadley. Still, it's unclear why that email wasn't found when White House counsel Alberto Gonzales ordered all White House staff in October 2003 to turn over emails and other documentary evidence that showed officials spoke with journalists, specifically Robert Novak and Matthew Cooper, about Plame Wilson.

Early Thursday morning, Viveca Novak gave a sworn deposition about her conversation with Luskin in which, Luskin had claimed, she passed along information that Rove was Cooper's source. According to two reporters at Time magazine familiar with her sworn testimony, Novak testified that she did not tip off Luskin about Rove being Cooper's source; rather, she repeated what had been said in Washington at the time for nearly a year: that Rove was Cooper's source.

Luskin has said that Novak's testimony will help exonerate his client and prove that Rove did not knowingly withhold any crucial information from the prosecutor. However, sources familiar with Novak's hour-long deposition said it hasn't done anything to help Rove's case. If anything, it has raised additional questions about the timing of Rove's grand jury testimony in which he acknowledged speaking with Cooper. Fitzgerald is said to be probing whether Rove had changed his testimony once it became clear that Cooper was going to have to reveal the identity of his source.

Novak is expected to write a first-person account about her sworn deposition and her role in the case for Time's Monday edition. Her story will be posted on Time's web site Sunday, a spokesman for the magazine said.

Rove's murky testimony during the initial stages of the leak probe in October 2003 has him in jeopardy of being indicted for obstruction of justice and making false statements related to the investigation. While there are still unanswered questions about the reasons Rove failed to disclose the fact - again during his initial interview with FBI and Justice Department investigators, and on two other occasions when he testified under oath before the grand jury - that he had a conversation with Cooper about Plame Wilson in July 2003, the way Rove's attorney Luskin tells it, the architect forgot about it.

Although news reports over the past year have specifically zeroed in on Rove's alleged failure to disclose to the grand jury his conversations with Time's Cooper, there is more scrutiny being placed on his initial testimony, because it's likely his conversations with Novak and Cooper would have still been fresh in his mind, considering the many front page news stories about the Plame Wilson's outing and the fact that Rove and Libby in particular had been rumored to be sources of the leak. Rove finally did testify that he spoke with Cooper - in October 2004, exactly a year after he was first questioned - but only after Cooper was held in contempt by the judge presiding over the case and compelled to testify about the identity of his source.

Rove Running Out of Answers, Time

By Jason Leopold
t r u t h o u t | Investigative Report

The attorney representing Karl Rove in the federal investigation into the leak of covert CIA agent Valerie Plame Wilson has made a desperate attempt to ensure President Bush's deputy chief of staff does not become the subject of a criminal indictment.

In doing so, Rove's attorney, Robert Luskin, has turned the tables on the media, who ultimately fought a losing battle to protect Rove - their source - who revealed to some reporters Plame Wilson's identity and CIA status.

Now Luskin has fired back, revealing to Special Prosecutor Patrick Fitzgerald that Viveca Novak - a reporter working for Time magazine who wrote several stories about the Plame case - inadvertently tipped him off last year that her colleague at the magazine would be forced to testify that Rove was his source who told him about Plame Wilson's CIA status, several people close to the case said this week.

The latest twist in the two-year-old investigation has all the elements of a Hollywood thriller. New details in the case seem to emerge on a daily basis. Selective leaks to a small handful of newspapers and cable news stations are aimed at portraying some of the key Bush administration officials involved in the case in a sympathetic light, while casting Fitzgerald as a partisan prosecutor.

But the fact remains, several sources close to the investigation said, that Rove is in serious legal jeopardy. According to sources, Fitzgerald is expected to decide before the end of the year whether to seek an indictment against Rove for obstruction of justice and making false statements to Justice Department, FBI investigators, and the grand jury on three separate occasions, for failing to disclose a conversation he had with Time magazine reporter Matthew Cooper in July 2003 about Plame Wilson.

According to these sources, unless Novak, who is scheduled to testify before a grand jury this week about her conversation with Luskin in 2004, provides evidence that can convince the grand jury that Rove genuinely forgot he spoke with Cooper in July 2003, and that only when Novak "casually" told Luskin a year later that Cooper obtained his information about Plame Wilson directly from Rove did Rove remember, the man known as the "architect" will most likely find himself facing a criminal indictment.

Two Time magazine reporters who have shared bylines with Novak on several Plame Wilson articles published in the magazine and are familiar with her meeting with Luskin in 2004 said she will testify that she simply repeated to Luskin what had long been rumored in Washington, DC, circles for over a year at the time: that Rove was Cooper's source.

Novak - who bears no relation to syndicated columnist Robert Novak, the journalist who first published Plame Wilson's name and CIA status in a July 14, 2003, column - met Luskin in Washington, DC, in the summer of 2004, and over drinks, the two discussed Fitzgerald's investigation into the Plame Wilson leak. Luskin had assured Novak that Rove learned Plame Wilson's name after it was published in news accounts and that only then did he phone other journalists to draw their attention to it. But Novak, perhaps trying to convince Luskin that she knew more than she really did about her colleague Cooper's source, made an offhanded, casual comment to Luskin to the effect that the internal buzz at Time contradicted Luskin's account, in that everyone in the newsroom knew Rove was Cooper's source and that he would testify to that in an upcoming grand jury appearance, these sources said.

Novak, who has written for Common Cause magazine, and co-authored the book Inside the Wire, about the atrocities at the Guantánamo prison camp, was in no way trying to tip off Luskin, the sources said; rather, she was trying to gauge his reaction to her comments because "she sensed a story," and thought that maybe Luskin would provide her with a "scoop" by disclosing to her that Rove was in fact Cooper's source.

Instead, according to Luskin's account, he contacted Rove and told him about his conversation with Novak, and that led the two of them to begin an exhaustive search through White House phone logs and emails for any evidence that proved that Rove had spoken with Cooper. Luskin said that during this search an email was found that Rove had sent to then-Deputy National Security Adviser Stephen Hadley immediately after Rove's conversation with Cooper, and it was subsequently turned over to Fitzgerald.

"I didn't take the bait," Rove wrote in the email to Hadley immediately following his conversation with Cooper on July 11, 2003. "Matt Cooper called to give me a heads-up that he's got a welfare reform story coming. When he finished his brief heads-up he immediately launched into Niger. Isn't this damaging? Hasn't the president been hurt? I didn't take the bait, but I said if I were him I wouldn't get Time far out in front on this."

The email to Hadley, Luskin said, helped Rove recall his conversation with Cooper a year earlier, and Rove returned to the grand jury to clarify his previous testimonies in which he did not disclose that he spoke with journalists, the sources said.

But Rove's account of his conversation with Cooper went nothing like he had described in his email to Hadley, according to an email Cooper sent to his editor following his conversation with Rove.

"It was, KR said, [former Ambassador Joseph] Wilson's wife, who apparently works at the agency on wmd [weapons of mass destruction] issues who authorized [Wilson's] trip," Cooper's July 11, 2003, email to his editor said. "Wilson's wife is Plame, then an undercover agent working as an analyst in the CIA's Directorate of Operations counterproliferation division. (Cooper later included the essence of what Rove told him in an online story.) The email characterizing the conversation continues: "not only the genesis of the trip is flawed an[d] suspect but so is the report. he [Rove] implied strongly there's still plenty to implicate iraqi interest in acquiring uranium fro[m] Niger .. "

It is unclear whether Rove was misleading Hadley about his conversation with Cooper, perhaps, because White House officials told its staff not to engage reporters in any questions posed about Wilson's Niger claims.

But Fitzgerald is said to be suspicious about the chain of events that led up to the discovery of the email. Moreover, he is said to be convinced that Rove had changed his story once it became clear that Cooper would be compelled to testify about the source - Rove - who revealed Plame Wilson's CIA status to him.

Additionally, Viveca Novak's forthcoming testimony before the grand jury appears unlikely to be helpful to Rove, and seems more an attempt at a stall tactic, sources inside Fitzgerald's investigation said.

For one thing, when Luskin and Novak met for drinks in the summer of 2004, there had already been Beltway gossip, and numerous accounts in major newspapers, fingering Rove as the source of the Plame Wilson leak to Cooper and Robert Novak, none of which forced Rove or Luskin to go back and search for evidence to determine if the rumors had merit.

Furthermore, sources close to Fitzgerald's investigation said, unless Viveca Novak pointedly told Luskin that she knew for a fact that Cooper would testify that Rove was his source, and that she had evidence to back it up, she was simply repeating to Luskin what had already been rumored when the leak first became public, and there is no reason to believe that her statements single-handedly forced Rove and Luskin to go back and check their facts.

The Time colleagues familiar with her meeting with Luskin said Novak had simply been fishing for a story and may have led Luskin to believe she was "in the know" about internal information at Time that Rove was Cooper's source. She did not provide Luskin with any new information about Cooper's conversation with Rove that had not already been reported in the media.

Still, Fitzgerald is said to have more evidence proving Rove tried to cover up his role in the leak as early as October 2003, just three months after Plame Wilson's CIA cover was blown.

Sources familiar with Luskin's conversations with Fitzgerald said Luskin told Fitzgerald that when Rove was questioned about his role in the leak in October 2003, he did not disclose his communication with Cooper, because Rove was enmeshed with the 2004 Presidential election, traveling around the country, attending fundraisers, meetings, and working more than 15 hours a day on the campaign as well as other pressing White House matters, and just forgot that he spoke with Cooper three months earlier.

But Rove and I. Lewis "Scooter" Libby, the former chief of staff to Vice President Dick Cheney who in October was indicted on five counts of making false statements, perjury and obstruction of justice for his role in the Plame Wilson leak, had been the subject of dozens of news stories about the possibility that they played a role in the leak, and had faced dozens of questions as early as August 2003 - one month after Plame Wilson was outed - about whether they played a part.

Libby and other officials in Cheney's office were the first to learn about Plame's role as a CIA operative. They then shared the classified information with Rove and other senior administration officials in the State Department and the National Security Council, who used it to undermine the credibility of Plame Wilson's husband, former Ambassador Joseph Wilson. Wilson was an outspoken critic of the Iraq war. He had alleged that President Bush misspoke when he said, in his January 2003 State of the Union address, that Iraq had tried to acquire yellow-cake uranium, the key component used to build a nuclear bomb, from Niger.

The uranium claim was the silver bullet in getting Congress to support military action two months later. To date, no weapons of mass destruction have been found in Iraq, and the country barely had a functional weapons program, according to a report from the Iraq Survey Group.

Wilson knew Bush's statement was false, because he had traveled to Niger more than a year earlier to investigate the yellow-cake claims. Rove, Libby, and other administration officials sought to discredit Wilson by claiming that Wilson had said publicly that he was sent to Niger at the request of Cheney's office. Cheney did, in fact, contact the CIA at first to arrange the mission, but Plame ultimately recommended Wilson. Still, in February 2002, Wilson traveled to Niger and reported back to the CIA that intelligence reports saying Iraq attempted to purchase uranium from Niger were false.

According to a preliminary FBI investigation, White House officials, including Rove and Libby, first learned of Plame's name and CIA status in June 2003 when questions surrounding Wilson's Niger trip were first brought to the attention of Cheney's aides by reporters, according to an Oct 13, 2003, report in the Washington Post.

"One reason investigators are looking back (to June 2003) is that even before Novak's column appeared, government officials had been trying for more than a month to convince journalists that Wilson's mission wasn't as important as it was being portrayed," the Post reported.

Fitzgerald is said to be particularly interested in the early days of the leak because they prove that, even before being questioned under oath, Rove had given false statements to prosecutors and that it doesn't appear believable that he could have forgotten about his conversation with Cooper about Plame Wilson so soon after it happened, the sources said.

It was during the weeks following Plame Wilson's outing that Rove and Libby had personally gone to great lengths to convince White House officials that neither of them had played a part, the sources said.

On October 7, 2003, President Bush and his spokesman, Scott McClellan, said during a press conference that the White House had ruled out three administration officials - Rove, Libby and Elliot Abrams, a senior official on the National Security Council - as sources of the leak. This was a day before the FBI questioned the three of them, based on questions McClellan said he asked the men.

A day later, Rove was interviewed under oath by FBI investigators and told them that he spoke to journalists about Plame for the first time after Robert Novak's column was published. In fact, it has since become public knowledge that Rove spoke with Robert Novak before his column was published and that he was one of Novak's two sources.

That same day in October 2003, in an unusual move, Bush said he doubted that a Justice Department investigation would ever turn up the source of the leak, suggesting that it was a waste of time for lawmakers to question the administration and for reporters to follow up on the story.

"I mean, this is a town full of people who like to leak information," Bush told reporters following a meeting with Cabinet members on October 7, 2003. "And I don't know if we're going to find out the senior administration official. Now, this is a large administration, and there's lots of senior officials. I don't have any idea."

Senator Frank Lautenberg, Democrat of New Jersey, responded to the President's statement in an October 10, 2003, interview with the New York Times.

"If the president says, 'I don't know if we're going to find this person,' what kind of a statement is that for the president of the United States to make?'' Lautenberg asked. "Would he say that about a bank-robbery investigation?"

During this time, the White House was facing a deadline on turning over documents, emails and phone logs to Justice Department officials probing whether or not the leak came from the White House. Rove's email to Hadley about the conversation he had with Cooper three months earlier didn't turn up during the search, the reasons for which are still murky. Furthermore, a log of Cooper's call to Rove wasn't included in White House phone logs either. Rove's assistant at the time, Susan Ralston, had said Cooper called the White House switchboard and was transferred to Rove's office and transferred calls aren't logged. However, she is said to have "clarified" her testimony earlier this month, saying that Rove told her not to log the call, after Fitzgerald is said to have obtained documentary evidence proving that wasn't the case with other calls transferred to Rove's office, sources close to the investigation who are familiar with Ralston's testimony said.

At the same time, the White House first started to lay the groundwork for a defense, specifically related to the role Rove played in the leak and whether he or anyone else in the administration knew Plame was a covert CIA operative and intentionally blew her cover in order to undercut Wilson's credibility.

On October 6, 2003, McClellan, in response to questions about whether Rove was Novak's source, tried to explain the difference between unauthorized disclosure of classified information and "setting the record straight" about Wilson's public criticism of the administration's handling of intelligence on Iraq.

"There is a difference between setting the record straight and doing something to punish someone for speaking out," McClellan said. "There were some statements made (by Wilson) and those statements were not based on facts," McClellan said. "And we pointed out that it was not the Vice President's office that sent Mr. Wilson to Niger. (CIA Director George) Tenet made it very clear in his statement that it was people in the counterproliferation area that made that decision on their own initiative."

The difference, according to McClellan's explanation, is crucial in that knowingly making an unauthorized leak of classified information is a federal crime. But repeating the leak when it has already been reported may not be considered a serious offense.

Criminal Trial Related to California Energy Crisis May Start Soon

By Jason Leopold
t r u t h o u t | Report

The 9th Circuit Court of Appeals is expected to issue a ruling soon on a key piece of evidence that will help kick-start the long awaited criminal trial involving Houston-based Reliant Energy and the company's alleged scheme to boost its profits by shutting down power plants in California during the height of the state's energy crisis five years ago.

At issue are technical questions federal prosecutors have raised involving the definition of "market manipulation" as stated by California's grid operator, which US District Court Judge Vaughn Walker said could not be introduced as evidence by the prosecution.

The criminal trial - the first one related to state's two-year-old energy crisis - was scheduled to begin last month. It was postponed the day jury selection was set to begin, when prosecutors asked the 9th Circuit Court of Appeals to overturn Walker's ruling that market rules of the California Independent System Operator could not be used as evidence to establish what constitute normal wholesale power prices.

Prosecutors want to submit as proof price benchmarks calculated by the ISO, an approach that federal regulators have used to distribute billions of dollars of refunds to electricity buyers from power sellers accused of price gouging. Walker sided with defense attorneys who objected to the evidence submitted by the prosecution.

Reliant and four of its traders are accused of wire fraud and single counts of commodities market manipulation and conspiracy. Reliant faces millions of dollars in fines, and the four individuals each face five years in prison and $250,000 in fines if they are found guilty.

Despite the last minute delay in the criminal trial, the case still appears to be a slam dunk for the prosecution, based on evidence already submitted by the government against Reliant, a spokesman for the Justice Department said.

One piece of evidence the government is using against Reliant is a transcript of a conversation between one of the company's traders and a power plant operator, in which the two men discuss shutting down some of Reliant's power plants in California between June 20 and 22, 2000, to create an artificial shortage so the price of power would skyrocket.

The transcript was released by the Federal Energy Regulatory Commission in January 2003. The scheme the men hatched worked: it caused power prices to reach "unjust and unreasonable" levels in California, which under the Federal Energy Policy Act is illegal.

We "started out Monday losing $3 million ... So, then we decided as a group that we were going to make it back up, so we turned like about almost every power plant off. It worked. Prices went back up. Made back about $4 million, actually more than that, $5 million," the Reliant trader says in a tape-recorded conversation on June 23, 2000.

California's energy market still hangs in limbo, with warnings of future blackouts and supply shortages in future summer months and no mechanism in place to deal with the situation.

While natural gas prices continue to skyrocket nationwide, the power situation in California is dire. Governor Arnold Schwarzenegger, who was voted into office in a special election, due in part to voters' frustration with the way former governor Gray Davis handled the energy crisis, has not made good on his promise to fix the situation.

California's electricity crisis wreaked havoc on consumers in the state between 2000 and 2001, resulted in four days of rolling blackouts, and forced the state's largest utility, Pacific Gas & Electric, into bankruptcy. California was the first state in the nation to deregulate its power market nearly 10 years ago in an effort to provide consumers with cheaper electricity and the opportunity to choose their own power provider. The results have since proved disastrous. The experiment has cost the state more than $70 billion, according to some estimates.

For three years, California officials pleaded with federal regulators, President Bush, and Vice President Dick Cheney to provide the state with some relief from soaring wholesale power prices and investigate energy companies, including Enron, Williams Companies, and Reliant, for allegedly manipulating the market.

Bush and Cheney responded personally to former California governor Gray Davis's pleas for help in May 2001 by saying the crisis was the result of California's poorly designed power market, which left some regulatory restrictions in place.

It wasn't until Enron collapsed in October 2001 and evidence of the company's manipulative trading tactics emerged that FERC began to take a look at the company's role in California's electricity crisis. Since then, memos written by former Enron traders were uncovered, with colorful names like "Fat Boy" and "Death Star," that contained the blueprint for ripping off California.

Enron's top trader on the West Coast, Timothy Belden, the mastermind behind the scheme, pleaded guilty in 2003 to conspiracy to commit wire fraud and has agreed to cooperate with federal investigators, who are still trying to get to the bottom of the crisis more than four years later.

California had demanded $8.9 billion from energy companies for overcharging the state for electricity during its year-long energy crisis. An administrative law judge for the agency released a preliminary decision in December that says California is due no more than $1.2 billion in refunds because the state still owes the energy companies $1.8 billion in unpaid power bills.

Shutting down power plants in California to boost wholesale prices is not a new issue. In 2002, CBS News reported that Williams Companies engaged in identical behavior around the same time as Reliant. The evidence, also a transcript of a recorded conversation between a Williams trader and a power plant operator in California, showed the two conspiring to shut down a power plant for two weeks to boost electricity prices and Williams's profits. FERC kept the evidence under wraps for a year and cut a secret deal with Williams to refund California $8 million it obtained through the scam without admitting any guilt.

FERC released the transcripts in late November 2002 after the Wall Street Journal sued the commission to obtain a full copy of its report. Had the evidence been released before the collapse of Enron, it may have helped California's case, but it would have hurt the Bush's National Energy Policy, which was made public instead in May 2001, the same month Williams and FERC hatched a settlement. During this time, Bush visited California and met with Gov. Davis to discuss the energy crisis. Bush told Davis he could not do anything to help the state.

A few weeks before the meeting between Bush and Davis, Vice President Dick Cheney, who chairs Bush's energy task force, was interviewed by PBS's "Frontline" for a special series on California's energy crisis. During the interview, Cheney flat-out denied that energy companies ripped off California.

"The problem you had in California was caused by a combination of things - an unwise regulatory scheme, because they didn't really deregulate," Cheney said in the May 17 "Frontline" interview. "Now they're trapped from unwise regulatory schemes, plus not having addressed the supply side of the issue. They've obviously created major problems for themselves and bankrupted PG&E in the process."

When asked whether it was possible that energy companies were behaving like a "cartel" and if some of the high power prices in California could be the result of manipulation, Cheney responded with a resounding "no."

The Bush administration's critics have said it's highly unlikely that the president, Cheney, and members of his energy task force were kept in the dark about the Williams and Reliant scams, especially since the findings of the investigation by FERC took place around the same time the policy was being drafted. According to evidence obtained by Congressman Henry Waxman (D-Calif.), the energy task force "considered and abandoned plans to address California's energy problems in its report."

Reliant has also been connected to Cheney's energy task force, which met between January and March 2001 to work on Bush's National Energy Policy.

Reliant, along with Entergy and TXU, two other major electricity corporations based in Texas, hired Diane Allbaugh as a lobbyist. Allbaugh is the wife of Joe Allbaugh, "the only member of Bush's so-called iron triangle of trusted Texas cohorts to have served on the energy task force" and a director of the Federal Energy Management Agency, according to an August 26, 2001, report in the Los Angeles Times.

Reliant, TXU and Entergy each paid Diane Allbaugh $20,000 for consulting work during the last three months of 2000, according to her January 2001 financial disclosure report. It's unclear whether she lobbied the energy task force on behalf of Reliant, TXU and Entergy, which would have certainly been a conflict of interest, but her husband, Joe Allbaugh, "has participated in task force talks with a direct bearing on the energy companies' interests generally, such as environmental rules for power plants and electricity deregulation - a specialty of his wife's," the Times reported.

"At least twice, Joe Allbaugh was privy to updates from (Bush) economic advisor Lawrence Lindsey (a former member of Enron's advisory board) on California's malfunctioning market, where Reliant stands accused by the state of overcharging," the Times reported.

The energy bill signed by Bush in August was a boon to Reliant Energy. House Energy Committee Chairman Joe Barton has for years pushed for legislation to create more competitive electricity markets. Reliant, whose executives enjoy close a relationship with Barton, played a role in shaping the energy bill, and worked side by side with Barton for years in shaping a portion of the energy bill that deals with competitive power markets.

Barton's staff includes two former Reliant executives, and until recently, Reliant's lobbying team included two former Barton aides. Reliant employees contributed more than $35,000 to Barton's political causes between 2001 and 2004. Barton holds about $15,000 in Reliant stock, which has increased nearly tenfold since he bought the shares in 2002.