Hours before they were to leave office after eight troubled years, George W. Bush and Richard B. Cheney had one final and painful piece of business to conclude. For over a month Cheney had been pleading, cajoling, even pestering Bush to pardon the Vice President's former chief of staff, I. Lewis (Scooter) Libby. Libby had been convicted nearly two years earlier of obstructing an investigation into the leak of a covert CIA officer's identity by senior White House officials. The Libby pardon, aides reported, had become something of a crusade for Cheney, who seemed prepared to push his nine-year-old relationship with Bush to the breaking point - and perhaps past it - over the fate of his former aide. "We don't want to leave anyone on the battlefield," Cheney argued.

Former Vice President Dick Cheney (left) and his former adviser, I. Lewis "Scooter" Libby, in July 2005. (Photo: Brendan Smialowski / Getty Images)

    Bush had already decided the week before that Libby was undeserving and told Cheney so, only to see the question raised again. A top adviser to Bush says he had never seen the Vice President focused so single-mindedly on anything over two terms. And so, on his last full day in office, Jan. 19, 2009, Bush would give Cheney his final decision. (See pictures of George W. Bush.)

    These last hours represent a climactic chapter in the mysterious and mostly opaque relationship at the center of a tumultuous period in American history. It reveals how one question - whether to grant a presidential pardon to a top vice-presidential aide - strained the bonds between Bush and his deputy and closest counselor. It reveals a gap in the two men's views of crime and punishment. And in a broader way, it uncovers a fundamental difference in how the two men regarded the legacy of the Bush years. As a Cheney confidant puts it, the Vice President believed he and the President could claim the war on terrorism as his greatest legacy only if they defended at all costs the men and women who fought in the trenches. When it came to Libby, Bush felt he had done enough.

    But the fight over the pardon was also a prelude to the difficult questions about justice and national security inherited by the Obama Administration: How closely should the nation examine the actions of government officials who took steps - legal or possibly illegal - to defend the nation's security during the war on terrorism? The Libby investigation, which began nearly six years ago, went to the heart of whether the Bush Administration misled the public in making its case to invade Iraq. But other Bush-era policies are still coming under legal scrutiny. Who, for example, should be held accountable in one of the darkest corners of the war on terrorism - the interrogators who may have tortured detainees? Or the men who conceived and crafted the policies that led to those secret sessions in the first place? How far back - and how high up the chain of command - should these inquiries go?

    As Attorney General Eric Holder weighs whether to name a special prosecutor to probe reports of detainee abuse during the Bush era, Democratic lawmakers are trying to determine why Cheney demanded that Congress be kept in the dark about some covert CIA plans after 9/11. There is no guarantee that these and other probes won't at some point require the testimony of the former President and Vice President. While Bush has retired to Texas to write his memoirs and secure his legacy by other means, Cheney is settling in for a long siege in Washington, where he will soon be installed in a conservative think tank and where, Republicans say, he will pull levers on Capitol Hill to make his voice heard. Above all, Cheney will continue to insist that the Commander in Chief and his lieutenants had almost limitless power in the war on terrorism and deserved a measure of immunity for taking part in that fight. That's a conviction Cheney made clear to all those involved in the Libby affair - including, in his final hours in power, the President himself.

    The Commutation Fail-Safe

    This Libby-pardon fight - an account pieced together from dozens of interviews with former officials who agreed to speak only without attribution - began two years earlier, in the federal district courthouse in Washington. In a case that gripped the capital but often mystified the rest of the country, Cheney's former top aide on domestic and foreign policy stood accused of obstructing a federal investigation into the source of an egregious media leak: the identity of an undercover CIA officer named Valerie Plame. Her husband Joseph Wilson, a former diplomat, had written an Op-Ed for the New York Times in July 2003 claiming to have evidence that the Administration had lied to bolster the case for war in Iraq. Within days, in an effort to discredit Wilson's story, a conservative columnist had revealed the identify of Wilson's wife. Plame's "outing" was seen by her husband and his fellow Democrats as an act of revenge orchestrated by Cheney himself - and the most extreme example of how far an Administration would go to cover its tracks in a war gone bad.

    Libby maintained his innocence throughout his trial, claiming that any false statements he had made to investigators resulted from bad memory, not deception. But Libby had reason to lie: his job was at stake, and his boss's was on the line too. Bush had declared that anyone involved in leaking Plame's identity would be fired. Cheney had personally assured Bush early on that his aide wasn't involved, even persuading the President to exonerate Libby publicly through a spokesman. Special counsel Patrick Fitzgerald, who prosecuted the case, said Libby's obstruction had prevented investigators from uncovering the truth about Cheney's role. "There is a cloud over the Vice President," Fitzgerald said in his closing arguments. (Matthew Cooper, then a TIME correspondent, was a witness in the case against Libby. Cooper had spoken to both Libby and Bush aide Karl Rove in July 2003 about Wilson's relationship to Plame. Time Inc. turned Cooper's notes over to Fitzgerald after fighting the subpoena all the way to the Supreme Court, which declined to hear Time Inc.'s appeal. Rove was not indicted.)

    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." (See the top 10 George W. Bush YouTube moments.)

    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.

    And there were these two sentences: "Our entire system of justice relies on people telling the truth," Bush said. "And if a person does not tell the truth, particularly if he serves in government and holds the public trust, he must be held accountable." Particularly if he serves in government. Bush's allies would say later that the language was intended to send an unmistakable message, internally as well as externally: No one is above the law.

    The Special Relationship

    A former White House chief of staff, Congressman and Pentagon boss, Cheney had an uncanny ability to guide Bush's decisions. Even as he claimed expansive Executive powers for the President, Cheney salted the bureaucracy with allies who could alert him in advance about policy disagreements, help him influence internal debates at key moments and give him a leg up in framing issues for the President. He was always deferential to Bush, often waiting with head down and hands clasped behind his back to address the President. Both by habit and by design, he cultivated a relationship that suited Bush's view of their roles: the President as the "decider" and Cheney as the Èminence grise who counseled him. In reality, by wiring the bureaucracy and being the last person Bush spoke with on many key decisions, Cheney became a "sounding board for advice he originated himself," as biographer Barton Gellman put it.

    Plamegate, as the leak scandal was dubbed, tested the trust between the two men like nothing before. Bush had promised high ethical standards after the Clinton era and a "fresh start after a season of cynicism," a veiled reference to Clinton's troubles with truth-telling under oath in the Monica Lewinsky scandal. In the Plame investigation, a prosecutor with broad authority jarred Bush's White House by issuing deposition orders and demands for documents. Bush himself was interviewed by Fitzgerald on June 24, 2004, as was Cheney some four months later.

    The investigation also coincided with the darkest period of the Administration: the Iraq war's dramatic downturn, the absence of WMD and festering problems in Afghanistan. And it unfolded as Bush was launching a wholesale course correction of his presidency in his second term. The pivot was hard to miss. Where Cheney had urged unilateral U.S. action in the first term, "in the second term we're going to be doing more diplomacy," Bush told top aides. Where Cheney had orchestrated a secret push to embrace the "dark side" in the war on terrorism, Bush instructed aides in 2005 to begin to seek congressional approval for some of the Administration's most controversial programs, such as its terrorist-detention policies. At the State Department, Bush installed Condoleezza Rice, for whom some Cheney allies had open contempt. As Secretary of State she would spend the next several years trying to repair damaged relations with allies around the globe and opening diplomatic initiatives th at Cheney and his team had spent several years shutting down.

    Longtime Cheney ally Donald Rumsfeld was eased out as Pentagon chief in late 2006, and Bush replaced him with Robert Gates, a former CIA director and Bush-family ally. Gates was as effective a bureaucratic player as Cheney - and much more of a pragmatist. "Bush was persuaded that the day of the neoconservatives had to be over, because the direction of his presidency had become politically unsustainable," says a well-informed adviser. "It wasn't so much a repudiation of Cheney or Cheneyism but a practical judgment that the previous approach simply wasn't working." (See America's worst Vice Presidents.)

    Cheney fought some of these initiatives all the way, "taking it upon himself," as a top adviser put it, to make the hard-line national-security case to the President. Cheney didn't lose every fight, but he was no longer winning them all either. And his backup vanished. Pentagon official Paul Wolfowitz moved to the World Bank in early 2005. Libby was indicted in October of that year and left the government. John Bolton resigned his post as U.S. ambassador to the U.N. the same month Rumsfeld left the Pentagon in 2006. Cheney's allies no longer manned the key points in the national-security flow chart. "Cheney," says an ally, "had to fight much harder to win."

    The Pardon Book

    The final days of the Bush White House were dominated by worries about the gasping economy, farewell interviews by senior officials and plenty of stories about Bush's dismal approval ratings as he prepared to leave town. But the "elephant in the room," as an adviser puts it, was the still unresolved case of Libby. Many in the West Wing feared that the matter threatened to rend Bush and Cheney's relationship because of the intensity of Cheney's campaign for a full and final pardon.

    Bush had long approached pardons with suspicion. As Texas governor, he granted them sparingly. His reluctance stemmed not from a lack of mercy but from his sense that pardons were a rigged game, tilted in favor of offenders with political connections. "He thought the whole pardon system was completely corrupt," says a top Bush adviser. Bush had a textbook illustration in one of his predecessor's last acts: Bill Clinton's eleventh-hour pardon of fugitive financier Marc Rich, whose ex-wife had contributed heavily to his campaigns and presidential library, created a firestorm that consumed Clinton as he left the stage - and overshadowed the first days of the Bush Administration. As President, Bush was often annoyed when guests at holiday parties buttonholed him in photo lines and pleaded for pardons for friends or clients. "Talk to Fred," he'd say coolly, steering them to Fielding.

    On Dec. 23, 2008, Bush announced 19 pardons. No big names. No apparent political sponsors. But one planned pardon went to a Brooklyn, N.Y., developer who had pleaded guilty in the early 2000s to lying to federal housing authorities. After news accounts surfaced that his father had given nearly $30,000 to the Republican Party earlier that year, the White House backpedaled. It didn't help that one of the lawyers who had sought the pardon had once worked in Bush's own counsel's office - exactly the kind of inside favoritism Bush despised. Bush, who had retreated to Camp David for a last family holiday, spent Christmas Eve fielding phone calls about the case. By day's end, he decided to kill the developer's pardon. The experience left him, aides say, even more wary of the process than he was before.

    Petitions for pardons are usually sent in writing to the White House counsel's office or a specially designated attorney at the Department of Justice. In Libby's case, Cheney simply carried the message directly to Bush, as he had with so many other issues in the past, pressing the President in one-on-one meetings or in larger settings. A White House veteran was struck by his "extraordinary level of attention" to the case. Cheney's persistence became nearly as big an issue as the pardon itself. "Cheney really got in the President's face," says a longtime Bush-family source. "He just wouldn't give it up."

    And there was a darker possibility. As a former Bush senior aide explains, "I'm sure the President and [chief of staff] Josh [Bolten] and Fred had a concern that somewhere, deep in there, there was a cover-up." It had been an article of faith among Cheney's critics that the Vice President wanted a pardon for Libby because Libby had taken the fall for him in the Fitzgerald probe. In his grand-jury testimony reviewed by TIME, Libby denied three times that Cheney had directed him to leak Plame's CIA identity in mid-2003. Though his recollection of other events in the same time frame was lucid and detailed, on at least 20 occasions, Libby could not recall details of his talks with Cheney about Plame's place of employment or questions the Vice President raised privately about Wilson's credibility. Some Bush officials wondered whether Libby was covering up for Cheney's involvement in the leak of Plame's identity.

    That meant taking up the pardon question again was, as a West Wing veteran put it later, like passing a kidney stone - for the second time. Bolten declined to take a stand, according to several associates. Instead, he lateraled the issue to Fielding, claiming that a legal, not a political, call was required. If the counsel's office decided a pardon wasn't merited, says an official involved in the discussions, everyone else would have cover with Cheney. "They could say, Our hands are tied - our lawyers said the guy was guilty." (See the top 10 unfortunate political one-liners.)

    And so again the job fell to Fielding. The counsel knew that only one legitimate reason for a pardon remained: if the case against him had been a miscarriage of justice. Because that kind of judgment required a thorough review, Fielding plowed through a thick transcript of the trial himself, examining the evidence supporting each charge. It took Fielding a full week. He prepared his brief for an expected showdown at a pardon meeting in mid-January 2009.

    The Vice President argued the case in that Oval Office session, which was attended by the President and his top aides. He made his points in a calm, lawyerly style, saying Libby was a fall guy for critics of the Iraq war, a loyal team player caught up in a political dispute that never should have turned into a legal matter. They went after Scooter, Cheney would say, because they couldn't get his boss. But Bush pushed past the political dimension. "Did the jury get it right or wrong?" he asked.

    Cheney replied that the conviction for obstruction of justice was based on what amounted to a case of "he said, he said," a disagreement between his longtime aide and a journalist. Libby had told the grand jury he remembered first hearing Plame's name from NBC's Tim Russert. But notes obtained by prosecutors indicated that Cheney had been the first to identify her to Libby. And Russert denied at Libby's trial that he had mentioned Plame to the defendant. The jury sided with Russert. Cheney, however, considered it an open question. "Who do you believe, Scooter or Russert?" he asked Bush.

    And Cheney went further. Even if Russert was right, Libby may have honestly forgotten what was said during a single conversation in a typically busy day. Memories are fallible. Only an overzealous prosecutor and a liberal Washington jury would criminalize a bad one, he argued.

    For his part, Fielding laid out most of his findings in a document called the pardon book, a compendium of evidence for anyone seeking clemency. The book on Libby lengthened the odds on a pardon. "You might disagree with the fact that the case had been brought and that prosecutorial discretion had been used in this way," says a source familiar with the review. "But the question of whether there had been materially misleading statements made by Scooter - on the facts, on the evidence, it was pretty clear." As far as Fielding was concerned, Libby had lied under oath.

    And then there was the commutation of 2007. Fielding told Bush that justice had been done in commuting Libby's harsh sentence nearly two years before. Bush had no moral obligation to do more. "You've done enough," he told the President. Presidential counselor Ed Gillespie, without passing judgment on the legal merits, told Bush a pardon would have political costs: it would be seen as an about-face or a sign that he hadn't been forthright two years earlier in declaring that a commutation was the fairest result.

    No Surrender

    Bush would decide alone. In private, he was bothered by Libby's lack of repentance. But he seemed more riveted by the central issue of the trial: truthfulness. Did Libby lie to prosecutors? The President had been told by private lawyers in the case that Libby never should have testified before the grand jury and instead should have invoked his Fifth Amendment right not to incriminate himself. Prosecutors can accept that. But lie to them, and it gets personal. "It's the difference between making mistakes, which everybody does, and making up a story," a lawyer told Bush. "That is a sin that prosecutors are not going to forgive."

    A few days later, about a week before they would become private citizens, Bush pulled Cheney aside after a morning meeting and told him there would be no pardon. Cheney looked stricken. Most officials respond to a presidential rebuff with a polite thanks for considering the request in the first place. But Cheney, an observer says, "expressed his disappointment and disagreement with the decision ... He didn't take it well."

    Two days after that, Libby, who hadn't previously lobbied on his own behalf, telephoned Bolten's office. He wanted an audience with Bush to argue his case in person. To Libby, a presidential pardon was a practical as well as symbolic prize: among other things, it would allow him to practice law again. Bolten once more kicked the matter to the lawyers, agreeing to arrange a meeting with Fielding. On Saturday, Jan. 17, with less than 72 hours left in the Bush presidency, Libby and Fielding and a deputy met for lunch at a seafood restaurant three blocks from the White House. Again Libby insisted on his innocence. No one's memory is perfect, he argued; to convict me for not remembering something precisely was unfair. Fielding kept listening for signs of remorse. But none came. Fielding reported the conversation to Bush.

    Meanwhile, Bush was running his own traps. He called Jim Sharp, his personal attorney in the Plame case, who had been present when he was interviewed by Fitzgerald in 2004. Sharp was known in Washington as one of the best lawyers nobody knew. A savvy raconteur from Oklahoma who had represented a long list of colorful clients - from Nixon pal Charles G. (Bebe) Rebozo to Sammy Sosa - Sharp had worked quietly for the President for a while before anyone even knew about it. In the meantime, the two men had become friends, spending hours chatting over cigars and near beer. On the Sunday before he left office, Bush invited Sharp to the executive mansion for a farewell cigar. (See Bush's economic mistakes.)

    While packing boxes in the upstairs residence, according to his associates, Bush noted that he was again under pressure from Cheney to pardon Libby. He characterized Cheney as a friend and a good Vice President but said his pardon request had little internal support. If the presidential staff were polled, the result would be 100 to 1 against a pardon, Bush joked. Then he turned to Sharp. "What's the bottom line here? Did this guy lie or not?"

    The lawyer, who had followed the case very closely, replied affirmatively.

    Bush indicated that he had already come to that conclusion too.

    "O.K., that's it," Bush said.

    Their Separate Ways

    With one day to go before both men left office, Bush informed Cheney that Libby would not get a pardon. On Inauguration Day, the outgoing Vice President gave a warm tribute to Bush in a private ceremony as the President prepared to leave Andrews Air Force Base for Texas. A day later, Cheney gave an interview to a conservative magazine, saying he disagreed with the President's decision on the Libby pardon. Other Libby backers were quoted in the article, calling Bush "dishonorable" and saying he had left a soldier on the battlefield, language Cheney had used throughout the debate over the pardon. Bush believes that his Vice President was "probably blinded by his personal loyalty to Scooter," a White House aide says. Cheney had pressed the issue as far as he could but finally conceded. "The Vice President knew there was a line out there that he was getting very close to but couldn't cross," says a former senior official. "The President knew that he needed to help make sure that Cheney didn't cross that line either."

    Bush and Cheney remain friends but have gone in different directions since leaving office. Bush returned to Texas, where he is raising millions for his presidential library and writing a book about his most pivotal decisions as President. Bush believes he put the war on terrorism and the war in Iraq on solid footings and will let history speak for his presidency. And Barack Obama? He "deserves my silence," Bush has said. (See pictures of George W. Bush.)

    For Cheney, the fight goes on. Working from a transition office in McLean, Va., he immediately re-entered the fray. He gave a number of high-profile TV interviews in which he decried the closing of the detention facility at Guant·namo Bay and defended what the Bush team called "enhanced interrogations," including waterboarding, as necessary intelligence tools to safeguard the nation. He also warned of another terrorist attack if Obama's policies were left unchecked. He assumed the role of opposition leader on May 21, challenging Obama's antiterrorism policies in a televised speech. Only minutes earlier, Obama had given an address defending his plans for detaining and trying al-Qaeda members on U.S. soil. Cheney is writing a book as well.

    Former Bush aides say Cheney's behavior needlessly stoked anti-Bush sentiment, which had only just begun to subside in voters. For Cheney, however, the ongoing battles are an extension of the fight he waged for several years on behalf of Libby. Cheney, says an ally, believes that the true legacy of the Bush years is the uncompromising way he and the President waged the war on terrorism. But Cheney also believes that Bush cannot claim that as a legacy if he fails to protect the aides and officials who carried out the dirty work.

    It is an increasingly lonely fight. But as Democrats edge closer to probing the Bush-era practices, perhaps including CIA interrogators, Justice Department lawyers and Cheney's closest aides, it appears his darkest fears may be coming true. Since Cheney was often the man responsible for the policies that are now under scrutiny, it is perhaps no surprise that he is leading the counterrevolt. "I think it is very, very important that we have a clear understanding that what happened here was an honorable approach to defending the nation," Cheney said on May 10. "There was nothing devious or deceitful or dishonest or illegal about what was done."

    This is the case Dick Cheney made for years in the Bush White House, prevailing for a long time, until he was outnumbered and outgunned. And it is one he seems prepared to make, without Bush at his side, for a long time to come.

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