During yesterday's Senate Judiciary Committee grilling of AG Gonzales, Senator Specter suggested that, in light of the Justice Dept's announced intention not to pursue a contempt prosecution against Harriet Miers or other current or former White House staff for their refusal to testify before Congress regarding the U.S. Attorney firings, a special prosecutor might be appointed. Specter implied that the appointment of a special prosecutor might circumvent the executive privilege impasse.
In a technical sense, Specter is probably right. Under United States v. Nixon, the existence of a criminal prosecution stands as a substantial obstacle to a successful presidential assertion of executive privilege. Conversely, Cheney v. United States District Court (the energy task force case) arguably says that absent a criminal prosecution, the courts will not override a claim of executive privilege. So a special prosecutor---and thus a criminal prosecution---could make a difference in how the courts rule on executive privilege.
But the Bush White House can read these cases as well as the Senate, and if they're unwilling to waive executive privilege directly, they're going to be equally unwilling to waive it indirectly by appointing a special prosecutor. And because the Independent Counsel Act was not renewed when it expired in 1999, the only way we could get a special prosecutor would be for the President or AG to designate one. It's true, as Justice Scalia noted in his dissent in Morrison v. Olson, that political pressure alone produced a special prosecutor during Watergate --- two actually, the one fired by Robert Bork and the one appointed to take his place --- but with President Bush's approval ratings already in the toilet, it's not clear that any political pressure can be brought to bear on him. So don't expect Specter's proposal to go anywhere.
Speaking of executive privilege, I'll be e-debating its merits on a Federalist Society soon. Watch for the links.