June 5 (Bloomberg) -- Lewis ``Scooter'' Libby, a former aide to Vice President Dick Cheney, was sentenced to 2 1/2 years in prison for obstructing a CIA leak probe, as a judge said public officials must pay a price for ``stepping over the line.''

U.S. District Judge Reggie Walton set a June 14 hearing on whether to let Libby remain free while appealing his conviction, though the judge said he isn't inclined to do so. The judge, who also fined Libby $250,000, rejected his plea to be spared a prison term for lying to investigators probing the disclosure of CIA official Valerie Plame's identity. Libby, 56, resigned as Cheney's chief of staff on being indicted in 2005.

``I appreciate that sometimes people make mistakes,'' Walton said at the hearing today in Washington. ``The evidence in this case overwhelmingly indicated Mr. Libby's culpability.'' The judge said people in positions of authority ``have to understand that there are consequences for stepping over the line.''

The case is an embarrassment to President George W. Bush, who is struggling against public disapproval of his Iraq war policy. Libby was convicted of lying to investigators probing whether the Bush administration deliberately leaked Plame's identity to retaliate against her husband, Joseph Wilson, who accused the government of twisting intelligence to justify the 2003 invasion of Iraq.

`Self-Report'

Walton said he didn't expect his rulings on trial evidence to be overturned and that he saw no reason why Libby shouldn't start serving his sentence as soon as prison space is found. He said he may let Libby ``self-report'' to prison.

Cheney, in a statement, called Libby a ``fine man'' with the ``highest intellect, judgment and personal integrity.'' The vice president said he and his wife, Lynne, ``remain deeply saddened by this tragedy and its effect'' on his former aide's family.

Bush won't intervene in the case with a pardon at this point, spokeswoman Dana Perino told reporters traveling with the president to the Group of Eight leaders' summit in Heiligendamm, Germany.

``He does feel terrible for them; they're going through a lot right now,'' Perino said. ``The president has not intervened so far in this or any other criminal matter and so he is going to decline to do so now as well.'' She said, ``The criminal justice system is still continuing.''

Libby, flanked by his lawyers, showed no emotion as the judge announced the sentence. His wife, Harriet Grant, wiped away tears.

`My Whole Life'

``Now I realize fully that the court must decide on punishment as prescribed by law,'' Libby told the judge moments earlier. ``It is respectfully my hope that the court will consider, along with the jury verdict, my whole life.''

Libby and his lawyers left the courthouse without commenting.

Plame's status as a Central Intelligence Agency official was disclosed in a July 14, 2003, article by syndicated columnist Robert Novak, eight days after Wilson's column criticizing the administration appeared in the New York Times.

A jury convicted Libby on March 6 after a five-week trial on two counts of perjury and one count each of obstructing justice and making false statements.

Walton, appointed in 2001 by Bush, sentenced Libby to 2 1/2 years on the obstruction charge and 1 year, 3 months in prison on each of the other charges, with the sentences to run concurrently. He also received two years of probation and was ordered to pay the $250,000 fine.

John Poindexter

Libby, who had faced as many as 10 years in prison, was the highest-ranking former White House official sentenced to prison since 1990, when ex-National Security Adviser John Poindexter was ordered to serve six months for lying to Congress about the Iran- Contra affair. Poindexter's conviction was overturned on appeal and he was never incarcerated.

Special prosecutor Patrick Fitzgerald had sought a prison term of 30 to 37 months.

``Why did he lie?'' the prosecutor told the judge today. ``People lie when they do something wrong. He knew what the investigation was about.''

Defense lawyer William Jeffress argued for probation, saying ``No one was ever charged'' with publicly disclosing Plame's identity. ``No one ever pled guilty to the underlying offense. The government did not establish the commission of an offense,'' the lawyer said.

Letters to Court

The court today released 373 pages of letters it received either supporting Libby or urging the judge to send him to prison. Among those backing him were former Defense Secretary Donald Rumsfeld, who called him a ``truly honorable public servant,'' ex-Secretary of State Henry Kissinger, departing World Bank President Paul Wolfowitz and former United Nations Ambassador John Bolton.

Fitzgerald argued at trial that Libby lied about his knowledge of the leak to protect his job. It's a federal crime to knowingly reveal the identity of a covert CIA agent, and the White House had announced that anyone involved in the leak of Plame's identity would be fired.

Novak testified during the trial that Plame's identity was provided to him by then-Deputy Secretary of State Richard Armitage and confirmed by Rove. No one was charged with a crime or fired for the leak.

Other prominent journalists took the witness stand, some after unsuccessfully fighting subpoenas. Ex-New York Times reporter Judith Miller, who spent 85 days in jail to protect Libby as a confidential source, testified as a prosecution witness, as did NBC journalist Tim Russert. Washington Post editor Bob Woodward testified for the defense, as did Novak.

No Testimony

Libby didn't testify, nor did Cheney, who had been identified as a possible defense witness. Libby told a grand jury that he learned about Plame from Cheney in mid-June 2003, then forgot about it and thought he heard about her for the first time from Russert a month later. Russert testified that he never discussed Plame with Libby. Other prosecution witnesses also contradicted the defendant's grand jury testimony.

Libby's lawyers argued that national security matters kept him too preoccupied to remember details about the leak.

Plame and Wilson are pursuing a civil suit against Libby, Cheney, Rove and Armitage that claims the four violated the couple's constitutional rights.

``As Americans, both Valerie and I are grateful that justice has been served,'' Wilson said in e-mailed statement.

The case is U.S. v. Libby, 05cr394, U.S. District Court for the District of Columbia (Washington).

To contact the reporters on this story: Cary O'Reilly in Washington at caryoreilly@bloomberg.net; Nadine Elsibai in Washington at nelsibai@bloomberg.net

Last Updated: June 5, 2007 15:20 EDT