Former Bush Adviser Arrested in 'Theft Scheme'

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Theres no quicker way to get a smirk in Washington than to leave a $161,000-a-year White House job, without having something new, and say you're doing it to spend more time with your family. That's what Claude A. Allen, President Bushs domestic policy adviser, told his bosses before he resigned in February. And that's what the White House told the press when his departure was announced three days after Bush had released his new budget and Allen, one of the administrations most senior African Americans, had told reporters, "The safety net is tight and strong." The White House threw him a farewell reception in the Roosevelt Room, with family and staff enjoying soft drinks and desserts. White House officials and reporters were abuzz about what might be "the real reason" for Allen's departure: Was he protesting something in the budget? Was he running for office?

It turns out that Allen, a 45-year-old father of three who is a nationally prominent conservative, knew that he was under investigation by police in suburban Montgomery County, Md., where he lives. He was arrested Thursday and charged with "theft" and "theft scheme" following a bizarre incident at a Target store that detectives allege was part of a year-long spree of fraudulent refunds at Target and Hechts stores that netted him more than $5,000 in credits to his credit cards. "He would buy items, take them out to his car, and return to the store with the receipt," a police statement said. "He would select the same items he had just purchased, and then return them for a refund." The police said that in 25 incidents during 2005, Allen "obtained refunds for items ranging from clothing, a Bose theater system, stereo equipment, and photo printer to items valued only at $2.50."

Allens lawyer told reporters that it was a misunderstanding on the part of Target officials, and that the investigation had nothing to do with his clients departure from government. White House officials learned about the arrest Friday night from news accounts, and Bush was asked about it Saturday morning when he met briefly with reporters following a Roosevelt Room briefing by military officials on efforts to combat Iraqi insurgents' improvised explosive devices. "If the allegations are true, something went wrong in Claude Allen's life, and that is really sad," Bush said. "When I heard the story last night, I was shocked."

White House press secretary Scott McClellan immediately began giving reporters a detailed account of what Bushs aides knew, and when. McClellan said that the night of the January 2 incident at Target, Allen called White House Chief of Staff Andrew H. Card Jr., who told Allen to talk to White House Counsel Harriet Miers. "He assured them that it was a misunderstanding," McClellan told TIME. "The way he explained it to Harriet was that he was returning some merchandise and that there was confusion with his credit cards because he had moved a number of times." McClellan said Allen received the benefit of the doubt because "there was nothing in his prior history that we were aware of—he had been through a number of background checks."

McClellan said that a few days later, Allen came back to Card and Miers and "told them that he had been looking at leaving because of his family situation—he had been putting in long hours, he wanted to spend more time with his family and he thought the best thing to do would be to resign so that he could do that." Allen was working on some of the initiatives Bush would be talking about in his State of the Union address on Jan. 31, particularly the education element of the President's new competitiveness plan. "So he thought a good time to transition would be after the State of the Union," McClellan said. The going-away party was Feb. 16, and Allen's last day at the White House was Feb. 17. McClellan said Card told Bush about the planned departure in early February, when Allen had essentially given two weeks' notice. Card told the President about the Target incident at that time, McClellan said. Bush was in the White House residence when his aides started getting calls about the arrest Friday night, and the President was informed then.

"If the allegations are true," Bush said Saturday morning, "Claude Allen did not tell my Chief of Staff and legal counsel the truth, and that's deeply disappointing. ... And my first reaction was one of disappointment, deep disappointment that—if it's true—that we were not fully informed. But it was also one—shortly thereafter, I felt really sad for the Allen family."

Allen, an advocate of home-schooling and abstinence education, is extremely well known to conservative activists as the press secretary to former Sen. Jesse Helms of North Carolina in his tough 1984 reelection race against then-Gov. James B. Hunt Jr., a Democrat. In 2003, Bush nominated Allen to a lifetime seat on the U.S. Court of Appeals for the Fourth Circuit, in Richmond, Va., but Democrats objected and there was never a confirmation hearing. Allen was Secretary of Health and Human Resources for the Commonwealth of Virginia from 1998 to 2001, appointed by former Gov. Jim Gilmore, and came to Washington as the deputy secretary of the Department of Health and Human Services for Bush. In that job, Bush introduced him at events in the White House and on the road in Tampa, Fla., and Bethesda, Md. As domestic policy adviser, Allen occasionally briefed the reporters.

The Montgomery County police said that the incident for which Allen was charged occurred on Jan. 2, at a Target in Gaithersburg, when the loss prevention manager spotted a suspicious man. "He was observed in the store with an empty Target bag in a shopping cart," the statement says. "The man was then seen selecting merchandise throughout the store and placing items in the Target bag. He put additional items in his cart. The man then went to guest services where he produced a receipt and received a refund for the items he had just selected from the store shelves. After receiving the refund he left the store without paying for the additional merchandise in the shopping cart. He was apprehended by the store employee."