Libby move helps seal Bush's legacy

WASHINGTON (Reuters) - President George W. Bush refused to rule out a pardon for former White House aide Lewis "Scooter" Libby on Tuesday, a day after sparing him from prison in a case that helped seal Bush's Iraq legacy and gave ammunition to Democrats.

Bush, who angered Democrats but reassured conservatives by saving Libby from serving a 2-1/2 year prison sentence, told reporters who asked about an eventual full pardon: "As to the future I rule nothing in and nothing out."

Bush's elimination of Libby's prison sentence -- while leaving intact a $250,000 fine and two-year probation -- was seen in Washington as an act of loyalty by an unpopular president trying to repair ties with disaffected conservatives who had pressed him to keep Libby out of jail.

There were comparisons to pardons issued by his father, President George H.W. Bush, in 1992 to key figures in the Iran-contra scandal -- former Defense Secretary Caspar Weinberger and State Department official Elliott Abrams.

The decision was also likened to President Bill Clinton's 11th-hour pardon in 2001 of financier Marc Rich from tax-evasion charges.

Libby was saved from a jail term for his conviction in March on charges of lying and obstruction of justice in an investigation into who leaked the identity of a CIA officer, Valerie Plame. Plame's husband, former Ambassador Joe Wilson, questioned evidence used to justify the Iraq war.

"It closes one chapter of the sort of life-draining issue of George W. Bush and Iraq," said presidential historian Stephen Hess. "It's totally in keeping with everything he's done up to now, including his sense of loyalty to his people."

Hess said Bush's move will eventually be seen as a footnote to a legacy that will feature Iraq prominently.

But for now the decision has embittered Democrats, sharpening a sense that bipartisan compromises may be elusive in the president's remaining 18 months in office.

"Will it have an impact? Absolutely. How much of one I can't tell yet," said Jim Manley, spokesman for Senate Majority Leader Harry Reid of Nevada.

Bush argued that Libby's 30-month prison sentence was excessive. But prosecutor Patrick Fitzgerald, who brought the case against Libby, said the sentence was fair given the seriousness of the crime.

In light of Bush's highly unusual decision to scrap Libby's prison term, the federal judge who imposed the sentence issued an order directing Libby's lawyers and the prosecutor to clarify exactly when Libby would be required to begin his probation.

"Strictly construed, the statue authorizing the imposition of supervised release indicates that such release should occur only after the defendant has already served a term of imprisonment," U.S. District Judge Reggie Walton wrote, ordering the lawyers to respond by Monday.

Democratics found in Bush's move a reason to rally the party's faithful. New York Democratic Sen. Charles Schumer issued a statement asking supporters to sign a petition of outrage. "Tell President Bush you are appalled by his actions," said the e-mail, which did not ask for donations.

The Libby move was an unknown factor on the Republican campaign trail.

Former New York Mayor Rudy Giuliani and prospective candidate Fred Thompson of Tennessee issued statements of support. Others were more circumspect, and Arizona Sen. John McCain was conspicuously silent on the issue.

The Bush decision appealed to the conservative base that can be key to Republican presidential primary elections. But it could be more problematic for Republicans in the general-election campaign, in which candidates typically move toward the center.

(Additional reporting by Andy Sullivan)