The paradox is that if everyone had just come clean up front it is extremely unlikely anyone would have beeen prosecuted for violating IIPA. Even if we assume Plame was "covert" within the statute the evidence would seem very weak with regard to proving the heightened specific intent required under that statute and Fitzgerald likely would have indicted no one and at most authored a critical investigative report highlighting the reckless conduct. (as he is far more restrained than some of his predecessors he might not even done that)

  I think more than anything it is the political consequences which they wanted to avoid. In the end, they get that to greater degree than if they had been honest  and a conviction for Libby.

Here's my letter about Libby printed today in the NY Times (WoHoo, the Grand Prize for cronic, crank letter writers):

New York Times

To the Editor:

One of the most absurd talking points that has emerged from the spin machine in the wake of I. Lewis Libby Jr.'s sentencing for perjury and obstruction of justice is that Mr. Libby's conviction and sentence are a travesty because no underlying crime was committed.

Since the special prosecutor, Patrick J. Fitzgerald, didn't charge anyone with the leak of Valerie Wilson's classified status -- the event that triggered the investigation -- then why should Mr. Libby be punished when no one else was?

This ignores that the threshold for conviction required proof that the leaker knowingly intended to reveal an agent's status -- a difficult requirement -- and further ignores that Mr. Fitzgerald wasn't able to fully investigate this case because of Mr. Libby's interference.

As I suspected, the link is unambiguous between Libby and Armitage through Marc Grossman, a neo-con ally of Libby's in the State Department who Libby asked to prepare a memo on Wilson.  Armitage got his information that he passed on to Woodward and Novak from Grossman's June 10, 2003 memo.

So, all the spin about Armitage having no agenda because he was considered a "moderate" or wasn't connected to the operation run from Cheney's office and thus not part of a campaign to discredit Wilson, is pure crap.  Ditto Armitage's own story about "just happening to mention" Plame's status it at the end of a conversation with Novak.

Soon after Grossman had prepared a memo for Libby with information that Wilson's wife worked for the CIA and was involved in arranging for Wilson to go to Niger, reporter Bob Woodward interviews Deputy Secretary of State Richard Armitage for a book. Armitage tells Woodward in a taped interview that Wilson's wife works for the CIA.    

Around  June 23, conservative columnist Robert Novak received a surprise call from Armitage's office offering an interview.  In a  Sept. 14, 2006 column, Novak said:  "During his quarter of a century in Washington, I had had no contact with Armitage before our fateful interview.  I tried to see him in the first 2 ½ years of the Bush administration, but he rebuffed me - summarily and with disdain, I thought.  Then, without explanation, in June 2003, Armitage's office said the deputy secretary would see me."
Novak later recalled that Armitage divulged Plame's identity toward the end of an hour-long interview.  Armitage "told me unequivocally that Mrs. Wilson worked in the CIA's Counter-proliferation Division and that she had suggested her husband's mission," Novak wrote, adding that Armitage seemed to want the information published.  Armitage "noted that the story of Mrs. Wilson's role fit the style of the old Evans-Novak column - implying to me that it [the column] continued reporting Washington inside information."   Novak says he confirmed Plame's status the next day by White House political adviser Karl Rove.