Inside Bush and Cheney's Final Days

A TIME investigation reveals the dispute that split George W. Bush and Dick Cheney as they left the White House — and shows why the struggle over their legacy is just beginning

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Brooks Kraft / Corbis for TIME

Bush and Cheney, pictured in October 2001, planned the war on terrorism but broke over whether to pardon one of its key architects

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After a seven-week trial, Libby was found guilty on March 6, 2007, of obstructing justice, perjury and lying to investigators. He was sentenced to 30 months in prison and a $250,000 fine, a precipitous fall for a man known as the Vice President's alter ego and formerly a prestigious lawyer at a premier Washington firm. He fought the verdict, his legal bills paid by a defense fund that raised $5 million, but a federal appeals court ruled on July 2, 2007, that Libby had to report to jail.

The White House was prepared for the ruling, in part because after six years in Washington, Bush had finally found himself a White House counsel who was up to the job. Fred Fielding, a genial, white-haired, slightly stooped figure in his late 60s, had cut his teeth as an assistant to John Dean in Richard Nixon's counsel's office and served as Ronald Reagan's top lawyer as well. He had unrivaled experience managing allegations of White House misconduct. He also was one of the few people in Washington who had served in as many Republican Administrations as Cheney had, which meant he had uncommon stature in the West Wing. And he was everything Bush's two previous counsels, Alberto Gonzales and Harriet Miers, hadn't been: strong-willed, independent and fearless. Says an old friend: "Freddy isn't afraid of anyone. He will slit your throat with a razor blade while he is yawning."

Fielding's arrival in early 2007 was one of several signs that the balance of power in the Administration had shifted against the Vice President. Fielding reviewed the Libby case before the appellate verdict came down and recommended against a presidential pardon. Cheney's longtime aide hadn't met the criteria: accepting responsibility for the crime, doing time and demonstrating remorse. "Pardons tend to be for the repentant," says a senior Administration official familiar with the 2007 pardon review, "not for those who think the system was politicized or they were unfairly targeted."

The verdict was one thing. Libby's sentence was another matter. Fielding told Bush that the President had wide discretion to determine its fairness. And within hours of the appeals-court ruling, Bush pronounced the jail time "excessive," commuting Libby's prison term while leaving in place the fine and, most important, the guilty verdict--which meant Libby would probably never practice law again. Fielding's recommendation was widely circulated in the White House before it was announced, and there is no evidence of disagreement. If Cheney and his allies were disappointed with Bush's decision, they did not show it, several former officials say, in part because they were, as one put it, "so happy that [Scooter] wasn't going to jail."

The response was predictable: conservatives cheered the commutation; liberals deplored it. But among Bush aides, the presidential statement was seen as a fail-safe, a device that would prevent a backtrack later on. Fielding crafted the commutation in a way that would make it harder for Bush to revisit it in the future. Bush not only noted his "respect for the jury verdict" and the prosecutor, he also emphasized the "harsh punishment" Libby still faced, including a "forever damaged" professional reputation and the "long-lasting" consequences of a felony conviction.

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