Take a look at the established procedures required for the President to issue a Pardon, courtesy of Looseheadprop at Firedoglake. At least skim over them before going on to the rest of what I am writing.
My first thought is that the Constitution did not establish these procedures. Presidents who had to consider all the requests they get for a Pardon put them into place. If they simply decided based on intuition, the appearance (and probably the fact) would be that the President's friends get Pardona and his enemies do not.
Nothing in the Constitution prevents this. However, the political ramifications for the President and his party are likely to be quite bad.
One thing to consider is that the President's conservative base is largely Right-wing authoritarians who beleive that God provides each person with the punishements and rewards they deserve, and God's will should not be interfered with. I have seen discussions that Bush will certainly give a Pardon, but not until after the November 2008 elections are over. I have also seen that Bush has no real loyalty to someone who is out of his sight, and won't bother to Pardon him. The latter option may find some support in the fact that Bush has issued fewer Pardons than any other President in the last fifty years.
Frankly, I don't give Libby a real chance for a Pardon. The 2008 election season has already started, and it would damage the Republican Party electorially. That really leaves Bush with the option of giving a Pardon after the 2008 election.
What you will see, however, is a growing drumbeat in the media that begins to ramp up after Libby is sentenced in June. Whether he gets the Pardon after the November 2008 election will depend on the strength of that appeal in thet media (if it is a small thing that sort of dies out and occasionally is ressurrected Libby is out of luck.) The other thing is whether there is a strong positive response from the public to the media barrage. Again, a strong reaction will get Libby his Pardon. A "dead-cat bounce" will get him stuck in prison. Cheney, if he remains in office, may feel enough loyalty to twist Bush's arm for the Pardon, and we know that Cheny doesn't care about public reactions.
I would hestitate to guess, but I'm counting on Libby not being Pardoned. Any trends will appear first in June.
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