WASHINGTON

CHENEY MAY BE ENTANGLED IN CIA LEAK PROBE

A special counsel is focusing on whether Vice President Cheney played a role in leaking a covert CIA agent’s name, according to people familiar with the probe that already threatens top White House aides Karl Rove and Lewis Libby.

The special counsel, Patrick Fitzgerald, has questioned current and former officials of President Bush’s administration about whether Mr. Cheney was involved in an effort to discredit the agent’s husband, Iraq war critic and former diplomat Joseph Wilson, according to the people.

Mr. Fitzgerald has questioned Mr. Cheney’s communications adviser, Catherine Martin, and a former spokeswoman, Jennifer Millerwise ,about the vice president’s knowledge of the anti-Wilson campaign and his dealings on it with Mr. Libby, his chief of staff, the people said. The information came from multiple sources, who requested anonymity because of the secrecy and political sensitivity of the investigation.

New York Times reporter Judith Miller, who has now testified twice before a federal grand jury probing the case after spending 85 days in jail for refusing to cooperate with Mr. Fitzgerald, wrote in Sunday’s New York Times that Mr. Fitzgerald asked her whether the vice president “had known what his chief aide,” Mr. Libby, “was doing and saying” regarding Mr. Wilson, a critic of the war in Iraq.

– Bloomberg News

HIGH COURT REFUSES BUSH ADMINISTRATION $280B TOBACCO PENALTY

The Supreme Court refused yesterday to allow the Bush administration to pursue a $280 billion penalty against tobacco companies on claims they misled the public about the dangers of smoking.

The decision, a major victory for cigarette makers, was not unexpected because the government’s case is still pending and the federal judge who presided over the nine-month trial has not yet decided whether tobacco companies are guilty of wrongdoing. The Supreme Court declined, without comment, to intervene now, and the case could return to justices next year.

The fight at the high court was over the amount of money the companies would have to pay, if the judge rules that they violated a federal anti-racketeering law known as RICO.

– Associated Press

DELAY WAS OFFERED MISDEMEANOR DEAL, ATTORNEY SAYS

A Texas prosecutor tried to persuade Rep. Tom DeLay, a Republican of Texas, to plead guilty to a misdemeanor and save his job as majority leader, but Mr. DeLay refused, the congressman’s attorney said yesterday.

Dick DeGuerin described such an effort in a letter to the prosecutor in the case, the Travis County district attorney, Ronnie Earle. The letter accompanied motions Mr. DeGuerin filed in Austin.

Mr. DeLay has been indicted on conspiracy and money-laundering charges in a Texas campaign finance investigation, both felonies. He was obligated to step aside under House Republican rules.

– Associated Press

$1 OF EVERY $5 IN 9/11 DIRECT LOANS IN DEFAULT Roughly $1 of every $5 in loans the Small Business Administration directly made to companies hurt by the September 11 attacks has fallen into default, leaving the government with an uphill effort to recover millions of dollars in taxpayer money.

The agency is just now learning about the magnitude of businesses that went under or stopped making payments. Its September 11 direct disaster loan program often gave recipients two years before their first payments were due, according to documents reviewed by the Associated Press.

The SBA directly lent $1.2 billion to more than 10,000 companies that made specific arguments about how their businesses were hurt by the suicide hijackings in 2001. Of that amount, $245 million is in default, the records show. The SBA investigators consider a loan in default if it has been charged off or liquidated or is more than 60 days delinquent.

SBA officials say they have written off less than $10 million of the default total and will make strong efforts to recover much of the rest of the money by collecting collateral, negotiating settlements with borrowers, or bringing delinquent loans up to date.

– Associated Press