The Rap on Bush and Cheney
time.com
The following is an excperpt:
"As Bush struggled to explain away the past, Cheney was being investigated by
the SEC and sued by Halliburton shareholders and the conservative activist
group Judicial Watch. The allegation: that Halliburton, while Cheney was
CEO, greased the books to boost the firm's flagging fortunes. Its decline was
due in part to Cheney's signature strategic move-Halliburton's merger with
Dresser Industries in 1998, when Dresser was about to be buried under
asbestos-contamination lawsuits. Halliburton remains burdened with the
liability of more than 200,000 suits and as of last year was on the hook for
$125 million in settlements. Its stock has fallen from nearly $60 to about
$13.50, imperiling the retirement savings of blue-collar workers. (Cheney
cashed in his Halliburton stock options before taking office, clearing more than
$20 million before the shares tanked.)"
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"At Cheney's Halliburton in 1998, the accountants (from-where
else?-Arthur Andersen) allowed the company to count uncollected
bills-cost overruns from fixed-price construction contracts-as revenue.
Under standard accounting rules, overruns should be listed as a cost unless
there is a likelihood the bills will be collected-and in the construction industry,
overruns can be hotly contested. But in 1998, Halliburton turned at least $89
million in uncollected bills into revenue; by 2001, the figure had grown to $234
million.
That's not huge bucks for a company with $17 billion in revenues, as
Halliburton reported in 1998. But scandals over what counts as sales took
Xerox down a peg over the last year and have caught up with drug companies
Merck and Bristol-Meyers Squibb. The Judicial Watch lawsuit alleges that
Halliburton used the revenue-enhancement gimmick to ward off investor
scrutiny as the company's financials deteriorated when the oil industry
retrenched. Revenues fell anyway, to $12 billion by 2000, Cheney's last year
in command.
But the more damning criticism of Cheney is that he was a lousy CEO. He
spent $7.7 billion to merge with rival Dresser in 1998, knowing that one of its
former subsidiaries, Harbison-Walker, was the target of manifold legal claims
from employees who worked making refractory bricks. Halliburton officials
believed that Dresser was indemnified. But when Harbison filed for Chapter
11, tort lawyers came after Halliburton. Cedric Burgher, Halliburton's vice
president for investor relations, points out that, even with the asbestos claims,
an Austrian company paid nearly $600 million for Harbison-Walker in 1999.
Says Burgher: "Nobody foresaw this." Lawyers for asbestos victims say
Cheney and Halliburton should have known better. "Everyone knew these
were multimillion-dollar cases," said Glen Morgan, a leading asbestos-claims
lawyer based in Beaumont, Texas. Whatever Cheney knew, he's not saying.
His office refers all questions back to Halliburton."
The above is an excpert from the article, "The Rap on Bush and Cheney"
-Reported by Cathy Booth Thomas/Dallas and James Carney, John F.
Dickerson and Michael Weisskopf/Washington
time.com |
