I didn't find out about this till I got back, but I can't say I'm surprised.
Dan Filler writes in Concurring Opinions: "Once Judge Walton decided to impose the prison sentence immediately, Bush was left only two options: infuriating his base or nakedly giving cover to a political and professional ally. He did manage to split the baby a bit - by commuting his sentence, rather than pardoning him, Libby will now have to live with at least a few of the nasty collateral sanctions (potential loss of voting rights, loss of the ability to obtain certain professional licenses, etc.) that come along with a felony criminal conviction."
Conservative law Professor Orin Kerr was troubled by the commutation. ACSBlog collects some of his statements: "I find Bush's action very troubling because of the obvious special treatment Libby received. President Bush has set a remarkable record in the last 6+ years for essentially never exercising his powers to commute sentences or pardon those in jail. His handful of pardons have been almost all symbolic gestures involving cases decades old, sometimes for people who are long dead. Come to think of it, I don't know if Bush has ever actually used his powers to get one single person out of jail even one day early. If there are such cases, they are certainly few and far between. So Libby's treatment was very special indeed." Kerr has other comments on it in his blog, the Volokh Conspiracy (which I regularly read), scroll around to find them.
Brad DeLong follows up in Why Did Libby Lie?: "If that theory is wrong -- if there really was no crime -- then it seems we ought to get some kind of explanation from Libby as to why he lied. People sometimes do have reasons to lie to investigators other than a desire to cover up criminal activity (hiding non-criminal activity that's embarrassing is the obvious one) but if Libby wants mercy he should offer up a plausible score on this account. But Libby hasn't offered any such story. Instead, he's offered a wildly implausible story -- that he's innocent. Under those circumstances, it's very odd to offer clemency. He's shown no remorse and appears to be continually engaged in a conspiracy to obstruct justice. Maybe there was no crime here; but if there wasn't, then what was Libby doing? He's not even trying to convince us that he had some other reason to lie."
Jeff Lomonaco called the Libby commutation half a month ago, in an op-ed he submitted to the Los Angeles Times but that it did not take: That would enable Libby to remain free while he seeks legal vindication through the appeals process. But more importantly, it would enable Bush and Cheney to continue the strategy they have successfully pursued in deterring journalists seeking their explanations with claims that they shouldn't comment on an ongoing legal proceeding. If Bush were to pardon Libby, he and Cheney would no longer have such a rationale for evading the press' questions - nor would Libby be able to claim the right against self-incrimination to resist testifying before Congress about the role that Cheney and Bush played in directing his conduct.
An Andrew Sullivan reader says the commutation sends a message to those administration officials that might be subpoenaed by Congress that the administration will "protect the loyal".
Adjunct Professor, Nkechi Taifa of the Howard University School of Law points out the double standard of commuting Libby's sentence "because its excessive" but not commuting Willie Mays Aikens sentence of 20 years in prison for selling "user-level" amounts of crack.
The WSJ Law Blog has a A Law Professor's Inside Take on Bush's Commutation Policy. Tim Floyd tried to get a death sentence commuted to a life without parole sentence. He appealed to the White House and was pleasantly surprised that then White House Counsel Alberto Gonzales met with him for an hour after looking into the case. "Judge Gonzales told me three things about President Bush’s policy in considering requests for commutation. First, that President Bush would not consider commutation if he believed that the case had already received full and fair consideration by the jury and the courts who heard the case. Second, that the President would not consider the request until he had a recommendation from the Department of Justice. Finally, he said that the President would not act on any request for commutation until all judicial avenues in the case had been exhausted. Just thought you might be interested in what this White House claimed about the commutation process."
Andrew Sullivan wrote about the above "Well, the third condition had been met for Libby. But not the other two. More evidence that this president uses his powers not to advance justice but to perpetrate a double standard of justice for his friends and lackeys. And to protect himself from scrutiny." An Andrew Sullivan reader points out that the 3rd condition wasn't met either.
Here's yet another parallel case where Bush didn't commute a sentence. Sullivan goes further: "The number of people George W. Bush sent to their deaths without a second's thought is higher than any living governor in the United States. And yet it took a perjury conviction of a white, wealthy, connected apparatchik to awaken the president's sensitivity to injustice:"
Fred Thompson (yeah the one probably running for the Republican nomination) has been a staunch supporter of Libby, but it turns out he was also a mole for Nixon in the investigation into Watergate.
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