Last Thursday, at a press conference with the Palestinian leader Mahmoud Abbas, President George W Bush was asked about the broad political impact of the investigation into the alleged leaking of the identity of a covert CIA operative, Valerie Plame. Was the investigation, which could lead to indictments of some very senior Bush officials, a distraction? Could he focus on his job? The president replied with a smile: “There’s some background noise here . . .”

That’s one way of putting it. It is the kind of background noise you hear when you are tied to a railway track and hear a goods train thundering towards you.

There’s plenty of material for political chatter in Washington right now — the Harriet Miers nomination, the fallout from the Iraq referendum, new battles over spending cuts, post-Katrina recriminations. But if you bump into someone, the first thing anyone on Capitol Hill or in the administration asks is: “Got anything new on the Plame case? What’s going on?”

Here is what is going on. The week before last people were speculating that Karl Rove might get into trouble and have to quit. Last week they were saying the same thing about Dick Cheney, the vice-president. That’s not a positive development for the president.

It’s important to emphasise that we don’t know for sure where the investigation might lead, and that much of what we know is leaked from interested parties. But we do know this. The prosecutor, Patrick Fitzgerald, has said he will either indict people by Friday or end the case with no charges at all.

In The New York Times last Friday we were told that “some lawyers in the case said they were persuaded that Mr Fitzgerald had all but made up his mind to seek indictments”. Cue the music from Jaws.

The case centres around the question of whether anyone in the Bush administration leaked the identity of Plame to discredit her husband, former diplomat Joseph Wilson, over weapons of mass destruction in Iraq. Wilson shouldn’t be taken seriously as a WMD expert, the Bush administration has claimed, because he only got the job of investigating Saddam’s quest for uranium in Niger because his wife pulled CIA strings.

The charge is that senior officials orchestrated the leaking of Plame’s identity to six journalists. This is par for the course in Washington, especially for Cheney and Rove. But leaking the identity of a covert operative to discredit an opponent happens to be a crime.

We now know Cheney’s chief of staff, Scooter Libby, disclosed Plame’s identity to the New York Times reporter Judith Miller before Wilson went public with his charges of intelligence distortion. We know Rove also mentioned her identity to reporters, and may have got the information from Libby.

But it was never clear who had originally discovered the information about Plame and disseminated it. Nor is it clear who gave the name to columnist Robert Novak, who first published it. In a series of leaks we still don’t know whence the original one sprang.

What we learnt last week is that the earliest leaker we have evidence for is Libby. We also learnt that he wrote a letter to Miller, who went to jail to protect him as a source. (Miller was also a social acquaintance of Libby and a key proponent of the now-debunked notion that Saddam had stockpiles of WMDs before the war.)

In the letter to the jailed Miller Libby wrote the following cryptic sentence: “Out West, where you vacation, the aspens will already be turning. They turn in clusters, because their roots connect them.”

Aspens are trees that simultaneously turn orange in the autumn. The prosecutor had Miller read that sentence out loud to the grand jury. It’s obvious Fitzgerald thinks it is pertinent. Who wouldn’t? It reads like something from The Sopranos.

The simplest inference from all this is that Libby deliberately leaked the name and that he was telling Miller in code that all the key witnesses had nevertheless kept him free from suspicion. She could testify if she kept her story straight with his and their versions.

Alas, her subpoenaed notes clearly show that she had met Libby and that the issue had indeed come up. They also contained the garbled name of Valerie Wilson, née Plame — misrecorded as “Victoria Wilson” and “Valerie Flame”. When Miller was asked under oath who had provided the name, she said she could not recall. I have yet to come across a single person in Washington who believes her.

But if Libby was the first source, where did he get the classified information from? From the Miller testimony, he knew quite early on. But what hard evidence do we know of? A lot of attention is now focused on an Airforce One flight to Africa on July 7, 2003. There was a printed memo detailing Plame’s identity and its secret status on that flight; and it was located “in the front of” the plane, according to The Washington Post. Who had access to it? Who had it printed out the day after Joe Wilson’s article appeared in The New York Times? We don’t know. But the front of Airforce One is not exactly Grand Central station. Only a few get to go in there. If that was the original source of the leak, then it goes very high up.

Cheney is a prime suspect because a) he took a keen interest in the WMD case; b) he is known for hardball tactics; and c) Fitzgerald has ordered five top Cheney aides and Cheney himself to testify.

Did Libby do something his boss was unaware of? We don’t know. Would Libby shield Cheney? We don’t know that either. Then there is the question of who might have contradicted Libby’s or Rove’s accounts. It could be anyone in the bureacracy for all we know. But we found out last week from The Washington Post that none other than Colin Powell has been questioned by the prosecutor. It was the Powell angle that led to the political-barometric drop in DC last week. Powell is still seething over his United Nations humiliation on WMD intelligence.

He may have scores to settle. Rove and Libby would be prime targets, with Cheney looming behind them.

What we are witnessing in Washington may be the sudden collapse of discipline within the Bush administration, past and present. The factions that fought over the Iraq war are re-emerging — but this time in public and under oath.

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