PRESIDENT George Bush’s battered image suffered another damaging blow yesterday with reports that his former top domestic policy adviser had been arrested by Maryland police for allegedly swindling two large department stores in a bizarre shoplifting scam.

Claude Allen, a prominent conservative who had become the highest-ranking African-American on the White House staff, resigned his post last month after telling the president that he wanted to spend more time with his family.

Yesterday it emerged that Allen had been interviewed by police in early January after he allegedly left a Maryland shop with goods he had not paid for. He was arrested last week and charged with two counts of theft that carry maximum sentences of 15 years in jail.

Bush said he was “shocked” by the arrest. “If the allegations are true, something went wrong in Claude Allen’s life, and that is really sad,” he said.

The arrest is the latest in a series of embarrassing mishaps for the White House, which is beginning to appear dangerously accident-prone. Bush’s approval ratings have fallen to 37% in one poll and to 34% in another. Only Richard Nixon, the disgraced former president, had lower ratings at this stage of his second term.

Allen, 45, is a born-again Christian and former lawyer who joined the administration in 2001 and was appointed domestic policy adviser at the start of Bush’s second term.

He often travelled with the president and sat with Laura Bush in the first lady’s box for the state of the union address on January 31, a few days before he resigned.

According to police statements, employees at a Target superstore in Gaithersburg, a Washington suburb, noticed Allen putting merchandise in a shopping bag. He also had items in a trolley. He allegedly walked over to a cashier, produced a receipt for similar goods, and said he was returning the items and wanted a refund.

Shop staff have alleged he was reimbursed for the goods he claimed to be returning, and then left the store with other items he had not paid for. He was challenged in the car park.

A police spokesman claimed a subsequent investigation uncovered 25 cases where Allen had allegedly obtained refunds from Target and another store for goods he had not purchased.

“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.”

Police said the goods included a home stereo system, clothes, a photo printer and smaller items worth as little as £1.45.

Allen lives with his wife and four children in a £600,000 home in Gaithersburg. His lawyer Mallon Snyder told reporters the incidents were a “series of misunderstandings” and Allen denied any wrongdoing.

“We would welcome an opportunity to meet Target store personnel to explain the confusion,” Snyder said. “Once they have an opportunity to examine the record, these charges will be dropped.”

At the time of his departure Washington insiders speculated that Allen, a staunch evangelical conservative, was leaving because he was unhappy military chaplains were being forced to conduct non-denominational services. In a previous job at the health department he was an advocate of abstinence-only Aids prevention programmes.

As a health administrator in Virginia he once blocked welfare payments to a rape victim who wanted an abortion. In 2003 Bush nominated Allen as a federal appeals court judge, but he was rejected by Democrats who unearthed an old statement he had once made disparaging “queers”.

Allen’s arrest follows several setbacks that have raised awkward questions about the competence of the Bush administration and the extent to which it has lost its moral and political bearings.

Republicans have been nervous about Bush’s leadership since his ill-fated attempt to appoint Harriet Miers, an old Texan friend, to the Supreme Court. The president’s support for a controversial deal to allow a Dubai company to take over the administration of a number of US ports outraged conservatives and turned into a political fiasco. The Dubai company last week withdrew from the deal.

Dick Cheney, the vice-resident, turned into a national laughing stock when he accidentally shot a friend during a hunting trip in Texas.

The continuing violence in Iraq has also taken a heavy toll of domestic confidence in Bush’s foreign policy. More than 70% of Americans believe Iraq is heading for civil war.

Republicans are increasingly worried that Bush has become a liability for mid-term elections due later this year, but Senator John McCain, a probable White House candidate for 2008, yesterday urged his colleagues to rally around the beleaguered president.

“He’s having trouble right now. We Republicans all know that,” the senator said. “That’s when he needs us to stand by him.”

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