Dick Cheney: The running mate has stumbled. But will he fall?

President Bush declares war on corporate greed and sharp practice and - whoops - look who's put himself in the firing line...

He is the man forever associated with the "Secure Undisclosed Location" – the éminence grise of the administration, who, in the wake of 11 September, was whisked from secret hideaway to secret hideaway to foil the designs of al-Qa'ida, ready to take over if anything happened to the President. As the threat from the terrorists seemed to ebb, Dick Cheney was occasionally sighted again. But now he is back to a furtive life on the run for less glorious reasons. As George Bush struggles to clean up American business, his Vice-President finds himself not part of the solution, but part of the problem.

A profile should dwell on the gleaming CV of Richard Bruce Cheney the public servant: the young and likeable White House Chief of Staff under Gerald Ford, who then served as Congressman for his native Wyoming for a decade before George Bush senior named him Defense Secretary. Cheney's steady handling of the Gulf War enhanced his reputation further. He seriously weighed a presidential run of his own in 1996, before concluding that his chronic heart condition was unlikely to withstand the ordeal of a campaign.

Instead, four years later, he found himself almost by accident a candidate for Vice-President. Cheney had led the informal group looking for a running mate for the younger Bush, only for George W to decide that the chief recruiting officer was the man for the job. During the 2000 campaign, Cheney astutely turned his leaden oratory and lack of charisma into a badge of gravitas. Back in government, he quickly emerged as one of the most influential vice-presidents in modern times, rarely seen but a constant voice behind the throne.

In the key foreign policy arguments of the Bush administration – over Iraq, Yasser Arafat, and US participation in Kyoto and other international treaties – Cheney, together with his old mentor and ally Don Rumsfeld at the Pentagon, has invariably been on the winning side, at the expense of Colin Powell and the State Department. Cheney is one of those family retainers the Bushes love: a 24-carat loyalist to the dynasty, at 61 without further ambition of his own.

But alas, who cares about past and present public glories? Suddenly, all that matters is the private sector Cheney. Bush junior with his ol' boy drawl, silver-buckled belts and stetson hats, may be everyone's embodiment of what is referred to in the Lone Star state as the "Awhl Bidness". But the real Texas oilman in the administration is the Nebraska-born, Wyoming-bred Dick Cheney.

Bush wheeled and dealed in the oil industry minor leagues. Cheney left government to become CEO of the Dallas-based Halliburton Co, the largest oil services group in the world. In many respects he was perfect for the job. Thanks to the new boss's contacts made during the Gulf War, Halliburton people in the Middle East could deal not with mid-level functionaries but with kings, princes and presidents. On Capitol Hill, and even in a Democratic administration, the Cheney name still cut ice.

His engaging and low-key style helped too. In Congress, you would forget that the man had one of the most right-wing voting records around. In his conservatism Cheney yielded not even to Newt Gingrich, the former Speaker. Unlike Gingrich, however, Cheney did not make enemies, even among his ideological opposites. In business, of course, these latter were few. Nor did his celebrated fondness for a decent steak do any harm either (except to his heart).

But if Cheney's tenure seemed a success at the time, it has lost much lustre since. He was awarded a $20m (£13.5m) golden handshake when he left, even though his contract as CEO had a couple of years to run. But even before the latest allegations of audit fraud, Halliburton's share price had tumbled from over $40 in summer 2000 to only $18. There was controversy over the company's alleged dealings with Iraq, and its 1998 acquisition of Dresser Industries, an oil equipment company with close links to the Bush family, turned into a disaster when Dresser proved to have major potential asbestos liabilities.

As Vice-President, Cheney could glide above these inconveniences – but not above a New York Times article of 22 May. It charged that Halliburton had booked contract cost overruns which were still in dispute as revenue, thus inflating its earnings. The sums involved were a relative pittance, $150m-odd out of revenues of more than $12bn. Unfortunately, the auditor involved was Arthur Andersen, at that moment on trial in Houston, about to be convicted of obstruction of justice arising from the Enron bankruptcy.

The timing could not have been worse. The US was reeling from a string of accounting scandals, its President tainted by his political contacts with Enron, whose stunning collapse started the crisis of confidence which has triggered the biggest bear market since the 1970s. Now there was another chain – Enron, Andersen, Halliburton, Cheney – seemingly leading to the heart of the administration.

Within days the Securities & Exchanges Commission (SEC) had launched an investigation. The consensus of experts is that Andersen's accounting was "aggressive" but probably not criminal. But that is scant consolation for Cheney. The SEC, itself under attack for not being aggressive enough in rooting out the corporate bad apples, cannot be seen to be soft-pedalling on Halliburton and Cheney. It is the controversy over Cheney, not the revelations of Mr Bush's dubious transactions in the late 1980s and 1990, which really worries the White House now.

On Wednesday, Mr Cheney became the target of a lawsuit brought by the legal watchdog group Judicial Watch on behalf of Halliburton shareholders, charging the Vice-President of the United States with fraud, by causing the company's share price to rise and thus deceiving investors. In fact, the suit knocked the price down another 5 per cent, to $13.55.

Then there is the now notorious Andersen promotional video. It may be six years old, but there is Halliburton's sober-suited CEO singing the disgraced accountant's praises for work "over and above just the ... normal by-the-books auditing arrangements". If that clip doesn't feature in Democrat ads for the upcoming mid-term elections this November, then Al Gore's a Republican.

And what has Dick Cheney to say about all this? Thus far precisely nothing. Ari Fleischer, the White House spokesman, calls the suit "without merit". Halliburton brands the allegations "untrue, unsubstantiated, unfounded". But from the Vice-President, only a lofty silence.

The silence may suit his lawyers. But it has cemented a new and damaging perception of Cheney, as symbol of executive branch power and arrogance. This is the same Cheney who brands critics of how the administration is waging its "war on terrorism" as virtual traitors, who scolds Congress for the most anodyne leaks of government intelligence data and strenuously resists an independent public commission to examine what went wrong in the run-up to 11 September.

It is the same Cheney who headed Mr Bush's energy task force, which came up with a Bill that could have been written by the two old oilmen's business pals, first and foremost "Kenny Boy", Kenneth Lay of Enron fame. Mr Cheney has flatly refused to give details of whom he consulted, with the result that the White House now finds itself in the almost unprecedented position of being taken to court by the non-party Congressional watchdog body General Accounting Office.

One way and another, the safest pair of hands in the Bush team has had a serious attack of butterfingers. For now Dick Cheney is protected by the Bush code of loyalty to those who are loyal to the dynasty. But if the financial scandals cost the Republicans dear this November, he may well be eased off the ticket for the election which really matters to the family, two years hence.