Suit Claims Fraud by Cheney, Oil Co.
By TIM REYNOLDS
Associated Press Writer
MIAMI (AP) — A watchdog group on Wednesday sued Vice President Dick Cheney and Halliburton Co., the oil company he ran for five years, based on allegations of accounting fraud.
Virginia-based Judicial Watch filed a shareholder lawsuit against Cheney and Halliburton, alleging that the accounting fraud led to shareholder losses. The lawsuit claims Halliburton overstated revenues by $445 million from 1999 through the end of 2001.
``Halliburton overstated profits that many American citizens relied upon. That's fraudulent security practices and it resulted in those Americans suffering huge losses,'' said Larry Klayman, chairman and general counsel of Judicial Watch. The filing, made in U.S. District Court in Dallas, was announced at a news conference in Miami.
Asked about the suit Wednesday morning, White House press secretary Ari Fleischer said he talked to the vice president's office, and ``they believe the suit is without merit and that's where it stands.''
Cheney was chairman and chief executive of the oil field-services giant from 1995 to 2000. Halliburton announced on May 28 that it received notice from the Securities and Exchange Commission that the commission was looking into Halliburton's accounting methods — adopted in 1998 — for reporting cost overruns on construction jobs.
The SEC has not filed any charges against Halliburton.
Judicial Watch alleges those accounting practices resulted in the overvaluation of Halliburton's shares, deceiving investors.
``We don't believe that there's any merit to this case,'' Halliburton spokeswoman Zelma Branch said before the suit was filed.
The suit lists two shareholders as plaintiffs: Stephen S. Stephens of Indiana and Lyle and Deanna J. Lionbarger of New Mexico. The suit does not specify their hometowns.
Klayman would not specify the amount of losses but called it ``a lot. I'm not prepared to say now. It will come out in the days and weeks ahead.'' The suit does not specify the number of shares held by the plaintiffs.
The suit names Cheney, Halliburton, and accounting firm Arthur Andersen Worldwide and Arthur Andersen LLP. Thirteen Halliburton board members and Terrence Edward Hatchett of Arthur Anderson are also named in the suit.
Judicial Watch, which describes itself as a nonpartisan group, has sued for access to records of the Cheney-led energy task force that drafted the Bush administration's energy policy.
The suit against Cheney comes the day after President Bush called for tougher penalties to fight the corporate corruption that has engulfed several high-profile companies in recent months.
Bush himself has come under criticism for transactions he made while a director at Harken Energy Corp. a decade ago. He has denied any wrongdoing.
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