Dick Cheney in Chicago promoting his book in September. (Photo: AP)

TD Ameritrade Institutional President Tom Bradley sat with former Vice President Dick Cheney at the company’s annual conference on Friday for an interview largely centered on foreign policy. However, it was Bradley’s opening question that drew the biggest surprise of the conversation.

“I hear you are related to Barack Obama. Is that correct?” Bradley asked to laughter.

Cheney responded that yes, in fact, he is related to the president, although he noted that if he were to look back far enough he was probably related to everyone in the room.

“I am a distant cousin of Barack Obama,” he said. “My grandmother and Barack Obama’s mother have a common ancestor. It’s something I’ve admitted to, but he hasn’t.”

“Family holidays must be tense,” Bradley added.

Moving on to more serious topics, Bradley raised the issue of perceived gridlock in Washington and the resulting public frustration.

“We have a very significant problem in that our debt is out of control,” Cheney said. “We have an administration that has no plan to deal with this problem and I feel that’s a significant mistake. They’re taking cuts out of defense, but not out of entitlements.”

The vice president told the story of visiting Ronald Reagan after the first Gulf War and thanking him for the military spending he achieved during his presidency, noting that it takes that long to ready the military.

“I’m not a Barack Obama fan, although I’m not partisan,” he said to more laughter from the audience. “I listened to the State of the Union speech and felt he was playing ‘small ball.’ He wants to limp along to the next election. There was no mention of entitlements. We’re putting our country’s credit rating at risk, our senior citizens at risk, our children’s future at risk and the ability to fund essential government services like defense.”

The solution, he said, is to vote, as it “is up to us.”

Turning to foreign policy, Cheney praised the Obama administration for its use of drones in killing suspected terrorists. He added that the single greatest worry he has is that “it won’t be airline tickets and box cutters, next time. It will be a nuclear weapon.”

He said the sophistication level needed to transport nuclear weapons is not very high, and can be loaded onto a boat or truck.

“We’ve got a proliferation problem,” he added. “North Korea has [a nuclear device], Pakistan, India, Saddam Hussein almost got one but we put him out of business. But in my mind this is the biggest threat.”

Cheney said he does not support the withdrawal of troops from Iraq and Afghanistan, a response that drew applause from the audience.

“We’ve done yeoman’s work in the region,” he said. “Afghanistan has its first democracy in 5,000 years. It was the home base of al-Qaeda. It’s cost us lives and treasure. Getting out will mean a major shift in who controls the region.”

He added that if the Afghan government falls, “blame will be laid on the doorstep of Obama.”

Bradley then asked Cheney for his thoughts about the 9/11 terrorist attacks.

“I was home when I heard about the death of Osama bin Laden and was pleased,” he said. “I put out a public statement that said so. I would have been more enthusiastic, however, had the president thanked Bush. Seal Team 6 wasn’t recruited yesterday, and Leon Panetta said that the policies put in place by the Bush administration, such as enhanced interrogation, the program I sponsored, led to his whereabouts.”

Asked about intelligence gathering and the controversy over Iraq’s weapons of mass destruction, Cheney said he holds members of the intelligence community in high regard, and if something goes really well, “we never hear about it.”

“Intelligence failed us in the Japanese attack on Pearl Harbor,” he explained. “Six months later we got word that the Japanese were going to attack Midway. Admiral Nimitz didn’t say, ‘I don’t trust them because they got it wrong with Pearl Harbor.’ He instead marshaled the resources he had left and repelled the attack, which changed the course of the war.”

He admitted Iraq was a “failure of intelligence,” but said the public lexicon has “simplified what we did not find.” He quoted the Dulfer Report that found that Saddam Hussein had the technology, people and capability to develop weapons of mass destruction and that he had used them on the Iraqi citizens in the past.

“If you want to stop terrorists, you must operate on the dark side,” he said. “You just can’t deal with Boy Scouts. You have to deal with unsavory people.”

Turning back to domestic issues, Cheney said he is a big proponent of tax reform and both the Ryan and Simpson-Bowles plans.

“We have to make America the best place to do business,” he said to applause. “We have to close off tax exemptions and loopholes. We also have to reverse the regulatory burden and address entitlements.”

On this last point, he noted that people are living longer. He pointed to his chest and said, “I have a device that pumps my blood at 9,000 RPMs. Ten years ago I wouldn’t be here because the technology wasn’t available, so I think it’s pretty nifty.”

Read full coverage of TD Ameritrade’s conference at AdvisorOne.