Rep. Linda Sanchez, chairman of a House subcommittee, ruled with backing from fellow Democrats on the panel that Rove was breaking the law by refusing to cooperate - perhaps the first step toward holding him in contempt of Congress.
in an effort to force him to talk about whether he played a role in prosecutors' decisions to pursue cases against Democrats, such as former Alabama Gov. Don Siegelman, or in firing federal prosecutors considered disloyal to the Bush administration.
Rove had been scheduled to appear at the House Judiciary subcommittee hearing Thursday morning. A placard with his name sat in front of an empty chair at the witness table, with a handful of protesters behind it calling for Rove to be arrested.
A decision on whether to pursue contempt charges now goes to the full Judiciary Committee and ultimately to House Speaker Nancy Pelosi.
House Republicans called Thursday's proceedings a political stunt and said if Democrats truly wanted information they would take Rove up on an offer he made to discuss the matter informally.
Rove offered to appear in private, with no oath or transcript, but Democrats said no, reports CBS News correspondent Bob Fuss.
The House already has voted to hold two of President Bush's confidants in contempt for failing to cooperate with its inquiry into whether the administration fired nine federal prosecutors in 2006 for political reasons.
The case, involving White House chief of staff Josh Bolten and former White House counsel Harriet Miers, is in federal court and may not be resolved before Bush's term ends in January.
The White House has cited executive privilege, arguing that internal administration communications are confidential and that Congress cannot compel officials to testify.
Rove says he is bound to follow the White House's guidance, although he has offered to answer questions specifically on the Siegelman case - but only with no transcript taken and not under oath.
Democrats have rejected the offer because the testimony would not be sworn and, they say, could create a confusing record.
Rove has insisted publicly that he never tried to influence Justice Department decisions and was not even aware of the Siegelman prosecution until it landed in the news.
Siegelman - an unusually successful Democrat in a heavily Republican state - was charged with accepting and concealing a contribution to his campaign to start a state education lottery, in exchange for appointing a hospital executive to a regulatory board.
He was sentenced last year to more than seven years in prison but was released in March when a federal appeals court ruled Siegelman had raised "substantial questions of fact and law" in his appeal.
Siegelman and others have alleged the prosecution was pushed by GOP operatives - including Rove, a longtime Texas strategist who was heavily involved in Alabama politics before working at the White House. A former Republican campaign volunteer from Alabama told congressional attorneys last year that she overheard conversations suggesting that Rove pressed Justice officials in Washington to prosecute Siegelman.
The career prosecutors who handled Siegelman's case have insisted that Rove had nothing to do with it, emphasizing that the former governor was convicted by a jury.