“[Administration officials] know that it was illegal conduct and that there is no saving grace for the president to say, ‘Well, I was acting with authority,’ ” said Leahy. “Otherwise there wouldn't be so much pressure on us to immunize illegal conduct by either people acting within our government or within the private industry.”

Leahy’s remarks signal that a bipartisan accord to overhaul the 1978 Foreign Intelligence Surveillance Act (FISA), reached Wednesday by the Intelligence panel’s leaders and the White House, could divide Democrats and hit a roadblock on his panel as well. The Intelligence Committee marks up the bill Thursday afternoon, after which it will be referred to Judiciary, where more Democrats have openly opposed retroactive immunity language.

His comments also come as House Democratic efforts to overhaul the law are falling into disarray, after House Republicans used parliamentary maneuvers to force leaders to pull the Democrats’ FISA rewrite from the floor late Wednesday.

Attempting to resolve a central point of contention, Senate Intelligence panel Chairman Jay Rockefeller (D-W.Va.) reportedly reached a deal Wednesday with Director of National Intelligence Mike McConnell to give full retroactive immunity to telephone companies if they can demonstrate they were cooperating lawfully with the secret wiretapping program when suits were levied against them.

Not all Democrats on the Judiciary Committee appeared to share Leahy’s concerns. Sen. Dianne Feinstein (D-Calif.), who sits on both the Judiciary and Intelligence panels, signaled she was likely to support the bipartisan approach.

“At this stage, it is a bipartisan bill,” Feinstein said. “I’m absolutely convinced that the only way we can legislate on this is on a bipartisan basis. This bill so far is bipartisan — that’s good news.”

During the hearing, Democrats launched fresh criticism at Mukasey’s interpretation of FISA. After the nominee indicated that Bush was not acting illegally by going beyond that statute in authorizing eavesdropping without court warrants, Leahy called that argument “a loophole big enough to drive a truck [through].”

Whether the president is acting illegally “would have to depend on whether what goes outside the statute nonetheless lies within the authority of the president to defend the country,” Mukasey said.