A Contingency Plan

By Viveca Novak, Mike Allen

Karl Rove has a plan, as always. Even before testifying last week for the fourth time before a grand jury probing the leak of CIA operative Valerie Plame's identity, Bush senior adviser Rove and others at the White House had concluded that if indicted he would immediately resign or possibly go on unpaid leave, several legal and Administration sources familiar with the thinking told TIME. Resignation is the much more likely scenario, they say. The same would apply to I. Lewis (Scooter) Libby, the Vice President's chief of staff, who also faces a possible indictment. A former White House official says Rove's break with Bush would have to be clean--no "giving advice from the sidelines"--for the sake of the Administration.

Severing his ties would allow Rove--who as deputy chief of staff runs a vast swath of the West Wing--to fight aggressively "any bull___ charges," says a source close to Rove, like allegations that he was part of a broad conspiracy to discredit Plame's husband Joseph Wilson. Rove's defense: whatever he did fell far short of that. Special counsel Patrick Fitzgerald appears to be seriously weighing a perjury charge for Rove's failure to tell grand jurors that he talked to TIME correspondent Matthew Cooper about Plame, according to a person close to Rove. Rove corrected himself in a later grand jury session. If charged with perjury, he will maintain he simply didn't recall the conversation with Cooper and told Fitzgerald as soon as he did.

Those strategies are being shaped absent any real knowledge of what Fitzgerald might do before the grand jury's scheduled dissolution on Oct. 28. "If he played his cards any closer to the vest, they'd be in his underwear," says a lawyer who is a friend of the White House. But Fitzgerald's intentions aren't the only mystery. Another character in the drama remains unnamed: the original source for columnist Robert Novak, who wrote the first piece naming Plame. Fitzgerald, says a lawyer who's involved in the case, "knows who it is--and it's not someone at the White House."

On Sunday, Oct. 16, the New York Times published its long-awaited account of reporter Judith Miller's dealings with Libby; she had spent 85 days in jail before receiving written and oral permission from Libby to testify before the grand jury. The nearly 6,000-word Times account says that notes Miller turned over to the prosecutor contain Plame's name, misspelled as "Valerie Flame," in the same notebook she used to interview Libby, but as Miller wrote in an accompanying first-person piece in the Times, she told the grand jury she believed that information came from "another source, whom I could not recall." In her 3,500-word account of her grand jury appearance, Miller says Fitzgerald also asked questions about Vice President Dick Cheney, including if Libby ever indicated to her whether "Cheney had approved of his interviews with me or was aware of them. The answer is no." The Times account makes clear that Miller's bosses supported her decision to go to jail but that there were deep tensions between Miller and her editors about her overall role in the affair and a disagreement between one of her lawyers, Robert Bennett, and the Times lawyer about her eventual reaching out to Libby that resulted in her freedom.

One key point that Fitzgerald is sure to pursue: in his letter to Miller allowing her to testify, Libby asserted that "the public report of every other reporter's testimony makes clear that they did not discuss Ms. Plame's name or identity with me." In her account, Miller made clear that while she could not recall if Libby had ever identified Wilson's wife by name, he did in fact tell her in a two-hour breakfast meeting on July 8, 2003--six days before columnist Novak disclosed to the world Plame's name and her role as an operative at the agency--that Wilson's wife worked at WINPAC, which stands for Weapons Intelligence, Non-Proliferation and Arms Control, a CIA unit that tracks unconventional weapons. Miller testified that she assumed that meant Wilson's wife worked as an analyst, not as an undercover operative.