As to the second article,

Government Exhibit 423 is a copy of a two-page article by Walter Pincus and Mike Allen entitled, “Leak of Agent’s Name Causes Exposure of CIA Front Firm,” which was published in the Washington Post on October 4, 2003.

The heart of the Government's argument is that the articles show that contrary to what Ted Wells told the jury in opening argument, Libby knew the scope of the Government's investigation was larger than who leaked to Novak and thus provided a motive for Libby to lie to the grand jury and investigators.

Evidence related to defendant’s knowledge and understanding of the scope of the FBI’s and
Grand Jury’s investigations is highly probative of whether defendant had a motive to lie, given the
defense argument that defendant believed that the scope of the investigations was limited to conduct in which he had no involvement.

Government Exhibit 422 provides powerful evidence that, on the day of his first FBI interview, defendant was in possession of information indicating that the focus and scope of the FBI’s investigation extended well past the disclosure of Valerie Wilson’s identity to columnist Robert Novak. This exhibit, which appears to have been printed on the day of the first FBI interview, and which is marked with handwritten underlining, discusses the nature and scope of questions being asked by FBI agents conducting the criminal investigation and specifically refers to disclosures regarding Ms. Wilson to at “least six Washington journalists” during the week of July 7, 2003.

Notably, every one of the article’s references to disclosures to journalists other than Novak, including the reference to the very article for which defendant was a confirming source, is underlined.

Likewise, Government Exhibit 423 indicates that the FBI was beginning attempts to contact multiple journalists in connection with the probe, and thus was not limiting its investigation to Novak. Accordingly, defendant’s possession and retention of these articles effectively rebuts defendant’s suggestion in opening statement, and through cross-examination of government witnesses, that defendant believed that the investigations were focused solely on the disclosure to Novak.

Moreover, Government Exhibit 422 reports that FBI agents conducting the criminal investigation were asking “not just who passed the information to Novak and other reporters, but also how Plame’s name may have first become linked with Wilson and his mission, who did it and how the information made its way around the government.” Thus, this exhibit shows that, at the time of defendant’s first FBI interview, defendant was in possession of information indicating that that the FBI was investigating events dating “more than a month” before the publication of the Novak column, a period that included defendant’s first disclosure of Ms. Wilson’s employment to Judith Miller.

The exhibit also shows that defendant was aware that when and how he and other government officials “first focused on Wilson and learned about his wife’s employment at the agency,” was important to a determination of whether a successful prosecution for disclosing the identity of a covert officer could be brought.

Thus, defendant’s possession and retention of Government Exhibit 422 supports the prosecution theory that, at the time of the first FBI interview, defendant understood the need to craft a story so as to indicate that he obtained information regarding Ms. Wilson’s employment from a source that would not have suggested to him that the information was or might be classified.

In other words, it's not Libby's faulty memory that is at issue, it's that he cooked up a story to cast reporters as his source of information so that he wouldn't be liable for disclosing what he was afraid might be classified information he received from Cheney or other White House officials.

As an aside, this is interesting -- how Libby used information from Cheney to be a confirming source for Walter Pincus:

....Defendant testified before the grand jury that he could have been a source for Walter Pincus’s June 12, 2003 article, and that it was during preparation for providing information to Mr. Pincus that the Vice President informed him that former Ambassador Wilson’s wife worked at the
CIA. 3/5/04 GJ Tr. at 60-63.

Team Libby argues that the articles are overly prejudicial and should be excluded. They argue that they will confuse the jury and cause them to infer Libby has committed a crime with which he is not charged, the leaking of classified information, and the court has ruled that whether Plame actually was covert or not is not an issue before them.

Admitting the two articles described above would prejudice the jury against Mr. Libby. The articles focus on issues such as Ms. Wilson’s actual employment status and damage to national security – issues that the Court has squarely held are irrelevant to this case. Putting such articles in evidence would cause jurors to speculate about these issues, and threatens to undo the Court’s efforts to date to prevent the jury from trying to punish Mr. Libby for the unauthorized disclosure of classified information – a crime that he is not charged with and that he did not commit. This is precisely the type of prejudice Rule 403 aims to prevent.

But, as Fitz argues, Libby's perception (as opposed to the reality) of whether she was a classified agent and whether that perception caused him to cook up a story is very much at issue. The judge instructed the jury at the beginning of the trial:

You may consider . . . what if anything Mr. Libby knew or believed about her status and any damage disclosure of her status could cause in assessing what his state of mind was when he spoke to the FBI agents and testified before the Grand Jury. You must, however, keep in mind that none of the evidence offered to show Mr. Libby’s state of mind establishes anything about what Ms. Wilson’s status actually was or what damage if any was or could have been caused by the disclosure of her status.

Team Libby has repeatedly brought before the jury the argument that Libby had no reason to believe her status was classified. Fitz writes:

The defense argued vociferously prior to trial that defendant did not understand, and had no reason to believe, that Ms. Wilson’s status was classified or covert. In opening statement and during cross-examination of the government’s witnesses, the defense has repeatedly alluded to this point.

He then argues:

Anything defendant knew at the time of his FBI interviews and his grand jury appearances about the possible classified status of Ms. Wilson’s employment or the possible ramifications of disclosing information regarding Ms. Wilson’s employment, is directly relevant to defendant’s state of mind and motive to lie, and directly relevant to the defendant’s arguments. Government Exhibits 422 and 423 are highly probative of the fact that, before defendant’s first FBI interview, he was aware of the possibility that Ms. Wilson was a covert officer of the CIA at the time defendant disclosed her employment to reporters Miller and Cooper and to White House Press Secretary Ari Fleischer.

As to the second article about Plame and Brewster-Jennings, Fitz writes:

Government Exhibit 423 reports specific information that would suggest to defendant that Ms. Wilson may have worked in a covert or undercover capacity within five years of the public disclosure of her identity. If this information turned out to be accurate, it could mean that Ms. Wilson was a covert officer within the meaning of Intelligence Identities Protection Act and defendant might have committed a criminal offense. Thus, defendant’s possession of this article is probative of the fact that – whatever defendant may or may not have thought or understood about Ms. Wilson’s employment status at the time he spoke with reporters Miller and Cooper in June and July 2003 – only ten days before his first FBI interview, defendant learned of evidence that suggested the possibility that his conversations with Miller and Cooper put him in legal jeopardy.

Fitz says any prejudicial effect of the articles is outweighed by their probative value as to Libby's two-fold motives to lie:

... [1] defendant’s knowledge of the nature and scope and potential seriousness of the investigation in which the defendant was to be interviewed, and [2] defendant’s awareness that the CIA officer whose employment he disclosed to reporters might have been a covert officer. [My numbers, not Fitz's.]

Fitz argues any prejudice can be overcome by a limiting instruction to the jury, cautioning them that the information is not being offered for the truth of Ms. Plame's status.

With respect to the portions of the articles that discuss the possible covert status of Ms. Wilson, the jury has been, and will be, instructed that the issue of Valerie Plame Wilson’s status with the CIA, and the question of whether any damage will result from the disclosure of her status, are totally irrelevant to the jury’s assessment of the defendant’s guilt or innocence, and that it “must not consider those matters in [its] deliberations or speculate or guess about them.” Moreover, as indicated above, the jury will also be instructed that the exhibits are not being offered, and should not be considered, for their truth. With such instructions, any potential confusion of the issues or prejudice to the defendant will be eliminated.

Libby disagrees:

The current record, when combined with Mr. Libby’s grand jury testimony, provides ample evidence to support the government’s motive theory, without the inflammatory references to “CIA front companies,” “potential damage to the Agency,” and “breach of national security.” For example, Mr. Libby acknowledged in the grand jury that he was aware of “the allegations that were whipping around in the press [that] somebody had leaked classified information,” and that he was specifically aware of the October 12 article (GX 422) and similar news accounts. March 24, 2004 Tr. at 153. Accordingly, Mr. Libby’s grand jury testimony provides the functional equivalent of the “brief factual summaries” that Carter suggests should be given to the jury in place of highly prejudicial news articles.

Fitz says Libby opened the door to this by his arguments to the jury:

Defense counsel has argued vigorously that defendant had no motive to lie, because he was “innocent” and had done nothing wrong, because he had no reason to believe that the investigation focused on anything other than the disclosure of Ms. Wilson’s employment to Robert Novak, a disclosure in which he played no part, and because the defendant had no reason to know or believe that Ms. Wilson was, or might have been a covert officer, or that her employment at the CIA was classified.

The government is entitled to present evidence of the defendant’s knowledge at the time of the charged offenses, regardless of its source, and to rebut the defendant’s claim that he had no motive to lie.

Fitz' final word:

Thus, given the probative value of Government Exhibits 422 and 423, and the absence of substantial risk of unfair prejudice, the Government should be permitted to introduce both exhibits as proof of defendant’s motive to lie, and to rebut the defendant’s specific arguments that he had no reason to believe or fear that Ms. Wilson’s employment status was or may have been classified, or that the scope of the FBI and grand jury investigations included any conduct in which he had participated.

And here's a preview of coming attractions:

Next week, the jury will hear grand jury testimony by the defendant indicating that he was specifically focused on the possibility that Ms. Wilson’s employment was classified, based on allegations“ whipping around in the press.” 3/24/04 GJ Tr. 54-55.

My take: If the articles hadn't been underlined by Libby and weren't so close in time to his FBI interviews, I might agree with Team Libby. But, since they have argued to the jury he had no motive to lie because he knew he hadn't leaked to Novak and he thought the criminal investigation was limited to that leak, and he knew he hadn't disclosed classified information about Plame to journalists, I think I side with Fitz on this one.