Mr.
Cheney, Step Down
June 6, 2002
By Richard Prasad
Every action the Vice President takes should be under scrutiny,
shouldn't it? We were all told about Vice President Gore's
fundraising methods, ad nauseum. Every time Mr. Gore sighed,
or told an anecdote, he was called a liar and a phony and
worse. Why isn't the same level of scrutiny applied to Vice
President Dick Cheney? The Republicans will tell you that
this is a different time, that with global terrorism and wars
and rumors of wars in the air, this is not the time to engage
in the politics of personal destruction. It is ironic that
the very same politics of personal destruction brought the
Republicans back to the White House.
Vice President Cheney has been very successful at staving
off any inquiry about himself or his administration's actions
by saying the Democrats are playing politics. Don't ask about
Bush's prosecution of the war on terror, or what country we
are going to invade next, that is unpatriotic. Don't ask what
the Bush administration knew before 9/11 about the World Trade
Center Attack, it is all the Clinton Administration's fault.
And so goes Cheney's song and dance, and so far it has kept
the press at bay.
By now, everyone who hasn't been living in a cave since last
December knows the Vice President's role in the Enron scandal,
but it bears repeating since there has been almost no reporting
on Enron lately. Mr. Cheney set up an Energy Task force, which
included major energy producers and large contributors, but
no environmental groups. Mr. Cheney met with former Enron
CEO Ken Lay, and let Mr. Lay hand pick the new members of
FERC, the regulatory commission that's supposed to keep energy
prices under control. But of course with Mr. Lay in control
of FERC, FERC did nothing while Enron was manipulating energy
prices in California. Mr. Cheney meanwhile, has invoked Executive
Privilege, to keep these documents from the public eye. And
although no Federal judge has agreed with Mr. Cheney's interpretation
of executive privilege, the stonewalling has worked, and the
public has stopped caring about Enron, and Mr. Cheney's energy
commission.
With such misdirection and obfuscation, it is no great surprise
that the latest charges against Cheney and his company have
gone almost unnoticed, slipped under the radar, as they say.
On May 22, 2002, the New York Times reported that Halliburton,
the energy company that Cheney was the CEO of before he became
Vice President, altered its accounting practices in 1998,
when Cheney was CEO, and reported 100 million dollars in profits
that it actually had not received yet. Halliburton makes much
of their money on construction projects, where the disputed
100 million dollars came from. Under the new accounting rules,
Halliburton assumed that their customers would pay the cost
for construction cost overruns, even though the question of
who would pay those costs was still in dispute. The problem
is, Hallibuton did not disclose the change in accounting practice
to investors for over a year. And now the Bush administration's
own Securities and Exchange Commission is looking into why
the accounting rule change wasn't disclosed.
The new accounting practice was approved by Arthur Andersen,
Halliburton's accountants at the time. You remember Andersen
don't you? They are the accounting company on trial for destroying
documents during the Enron investigation. In a May 29th 2002,
New York Times article, the relationship between Cheney and
Andersen seems quite close. The relationship was so close
that Cheney appeared in a promotional video to extol the virtues
of Arthur Andersen.
What was the purpose of this accounting change? According
to the same May 22nd article from the Times, two former executives
at Dresser Industries, which merged with Halliburton in 1998
said the changes in accounting came about to obscure losses
that Halliburton suffered. The hundred million dollars in
question is not a large amount in terms of corporate budgets,
but the shift in accounting policies came at a key time. Halliburton
had just suffered large losses, due to a recession in the
oil industry, and had just acquired Dresser Industries, any
more losses at that time would have sent investor confidence
plummeting.
But the excuses for Cheney are already piling up. The first
excuse is that these accounting practices are not illegal.
Accountants call these practices "aggressive" but not illegal.
Of course, one has to wonder, with the corporate behavior
at Enron and Andersen, what exactly is illegal in corporate
America these days? The corporate ethic is in the toilet,
because nothing is viewed as illegal anymore as long as nobody
gets caught doing it.
The second excuse is that Cheney was a hands-off CEO, that
didn't actually make the decision, but left it up to his subordinate
David Lesar. Cheney had not specifically ordered the change
because the change in accounting was so mundane that it was
done without Cheney's knowledge. That is another problem with
corporate America today: there is no accountability. The captain
does not go down with the ship, the captain blames those under
him and goes on as if nothing is wrong. Somewhere there has
to be a memo with Cheney's signature on it that approved this
accounting change, it is up to the press to find it, if they
even care to look.
If all else fails, they can blame the accountants, as Enron
tried to do. In a very funny op-ed piece, on May 31st, 2002,
Michael Kinsley wrote for the Washington Post that Cheney
could always feign surprise like the Claude Raines character
in Casablanca and say that Halliburton was "shocked, shocked,
shocked" to find out what Andersen was doing. Of course given
the fact that Cheney had already made a promotional video
for Andersen, feigning shock would hardly be believable.
Cheney would be much better served by wrapping himself in
the flag and calling any charges that he knew about the accounting
partisan and outrageous. Hasn't that been the post-9/11 strategy
of the Bush Administration all along?
The accounting snafu was hardly the first slip-up for Halliburton
during Cheney's tenure at the helm. According to the United
Press International and the Washington Post, dated June 25th,
2001, Halliburton's dealings in Iraq, through foreign subsidiaries,
were much more extensive than originally believed. Halliburton
held stakes in two companies that agreed to sell $73 billion
dollars in oil production equipment to Iraq. The refrain from
the Cheney camp was a familiar one. It was a joint venture
between a foreign subsidiary of Halliburton and Iraq, so Cheney
did not review the contracts and had no knowledge of the deal,
according to Vice presidential spokesman Mary Matelin. And
besides that it was all legal. But just think how much more
oil production equipment Hallibuton and it's foreign subsidiaries
could sell if Saddam Hussien were removed and UN sanctions
were dropped? No wonder Cheney has been one of the most vocal
proponents of removing Saddam. But I'm sure the monetary gains
for Halliburton by removing Saddam has never entered Cheney's
mind has it?
And that is not the only dark cloud hanging over Cheney's
tenure at Halliburton. Cheney's acquisition of Dresser Industries
was supposed to be Dick Cheney's crowning achievement, but
it might be Halliburton's undoing. Along with Dresser Industries,
Cheney acquired the many, many asbestos litigation suits that
were filed by former Dresser Industries workers who claim
to have lung cancer as a result of their long term exposure
to asbestos. According to New York Newsday from May 30th 2002,
Halliburton faces almost 292,000 asbestos related lawsuits.
This has caused many brokers to institute a sell rating on
the stock. A sell rating is something that brokers never initiate,
but more of them are saying sell about Halliburton, and that
means trouble. At it's height in 1998, Halliburton was worth
about 60 dollars a share. After the merger with Dresser, it
was worth 30. After these latest accounting disclosures, Haliburton
is trading at 17 dollars a share. Mr. Cheney's portfolio is
taking quite a beating isn't it? Maybe the fact that he laid
off 10,000 workers after the merger with Dresser doesn't bother
him, but Halliburton's precipitous drop in share price sure
does.
Actually, the truth is Halliburton made Cheney richer than
his wildest imagination. Even though Halliburton withheld
Cheney's bonus in 1999 for missing earnings targets, in the
year 2000, Cheney's last at Halliburton, he made over 36 million
dollars in salary and stock incentives. Not bad for a guy
who ran the company's stock into the ground and laid off 10,000
of the workers he and Bush pretend to care about.
Mr. Cheney, for the stonewalling of your energy commission
documents, for your decision not to tell investors about Halliburton's
accounting practices for a year, for the double dealings on
Iraq through Halliburton's subsidiaries, for firing 10,000
workers after lining your own pockets with ill-gotten gains,
for all the asbestos litigation cases that you made Hallibuton
a part of, and most of all, for all the times you've falsely
invoked patriotism to cover your old, unethical behind, for
the good of America Mr. Cheney, please resign immediately.
|