This pot has taken months to reach a boil but it's boiling now! John Dean (Of Watergate fame. Oh! The irony!) has a good background piece.

The Bush Administration Adopts a Worse-than-Nixonian Tactic: The Deadly Serious Crime Of Naming CIA Operatives
by John Dean

On July 14, in his syndicated column, Chicago Sun-Times journalist Robert Novak reported that Valerie Plame Wilson - the wife of former ambassador Joseph C. Wilson IV, and mother of three-year-old twins - was a covert CIA agent. (She had been known to her friends as an "energy analyst at a private firm.")

Why was Novak able to learn this highly secret information? It turns out that he didn't have to dig for it. Rather, he has said, the "two senior Administration officials" he had cited as sources sought him out, eager to let him know. And in journalism, that phrase is a term of art reserved for a vice president, cabinet officers, and top White House officials.

On July 17, Time magazine published the same story, attributing it to "government officials." And on July 22, Newsday's Washington Bureau confirmed "that Valerie Plame ... works at the agency [CIA] on weapons of mass destruction issues in an undercover capacity." More specifically, according to a "senior intelligence official," Newsday reported, she worked in the "Directorate of Operations [as an] undercover officer."

In other words, Wilson is/was a spy involved in the clandestine collection of foreign intelligence, covert operations and espionage. She is/was part of a elite corps, the best and brightest, and among those willing to take great risk for their country. Now she has herself been placed at great - and needless - risk.

Why is the Administration so avidly leaking this information? The answer is clear. Former ambassador Wilson is famous, lately, for telling the truth about the Bush Administration's bogus claim that Niger uranium had gone to Saddam Hussein. And the Bush Administration is punishing Wilson by targeting his wife. It is also sending a message to others who might dare to defy it, and reveal the truth.
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A Federal offense has been committed by high level government officials by outing a CIA agent. So, is anyone going to pay for this?

CIA seeks probe of White House
Agency asks Justice to investigate leak of employee’s identity

The Wilson War Continues
The DOJ opens a preliminary probe into whether the White House illegally unmasked a CIA operative

Bush Administration Is Focus of Inquiry
CIA Agent's Identity Was Leaked to Media

Tha last piece is from the Washington Post and here is what Josh has to say about it (go read it)...

Okay, no question: the Washington Post has the story about the Wilson/Plame scandal. This story, frankly, blows the whole thing wide open.
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In any case, this is truly a bombshell and for the first time I suspect someone may actually lose their job over this -- though loyalty being what it is to the prez I still have my doubts. Here's what this means, as nearly as I can see it. Clearly, the White House knows who those two people are. They also know that the wrongdoing did in fact occur. Perhaps most important, the public now knows that they know. Given all that, I don't see how -- in a climate of media feeding frenzy -- it will be possible to keep their identities a secret for long. And once their identities are known ...
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This is getting very interesting. Be sure to check out Eschaton, Talking Points Memo, Whiskey Bar, and CalPundit for the latest.

How big is this? Look at the list of suspects at Eschaton...

Who Burned Valerie Plame?

That leaves eight candidates:

1) Dick Cheney – Vice President
2) Karl Rove Senior -- Advisor to the President
3) Condi Rice -- Assistant to the President for National Security
4) Andy Card – White House Chief of Staff
5) Ari Fleisher -- Press Secretary
6) Dan Bartlett – Assistant to the President for Communication
7) John Gordon -- Assistant to the President and Homeland Security Advisor
8) Scooter Libby – Vice President’s Chief of Staff

I am not sure I would consider Libby and/or Gordon to be top and senior but maybe they are.

If any of the first 5 (Cheney, Rove, Rice, Card or Fleischer) is involved, it is a major scandal.

The identity of the six journalists may soon be known. We know from the efforts to smear Wes Clark that phone records are kept at least for incoming calls to the White House. It does not seem hard to match those calls up with the small circle of suspects.

Pass the popcorn and get out the handcuffs. This is going to be fun.
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Body and Soul has a chronological list of links on this, too.

Where did I put that popcorn?