AUSTIN, Texas -- The Securities and Exchange Commission is now
investigating Halliburton -- the company formerly run by Vice President Dick
Cheney -- for accounting irregularities. What took so long?
Dick Cheney's record at Halliburton is one of the most
under-covered stories of the past three years. When you consider all the
time and ink spent on Whitewater, the neglect of the Cheney-Halliburton
story is unfathomable.
The proximate cause of the SEC investigation is an "aggressive
accounting practice" at Halliburton approved by the accounting firm Arthur
Andersen -- a little matter of counting revenue that had not yet been
received, $100 million worth. The New York Times reports two former
executives of Dresser Industries, which merged with Halliburton in 1998, say
Halliburton used the accounting sham to cover up its losses. Dresser may
have thought it got a bad deal in that merger because of that $100 million
"anticipation" on the credit line, but the deal turned out to be much more
sour for Halliburton.
Cheney bought himself a former Dresser subsidiary facing 292,000
claims for asbestos-caused health problems. He said at the time the merger
was "one of the most exciting things I've ever been involved in" and
predicted it would benefit Halliburton's customers, employees and
shareholders. The first thing that happened was Halliburton eliminated
10,000 jobs. (It was always amusing to hear Cheney on the campaign trail in
2000 claiming he had been out in the private sector "creating jobs.")
According to executives at Halliburton, Cheney knew about the
asbestos liability before the merger and considered the risk. Because of the
liability, Halliburton's stock has fallen from over $60 to under $20. In
January, the company had to deny rumors it was going into bankruptcy. In
other words, Cheney pretty well ruined the business. Of course, what the
company wants to do now is have Congress pass a new law limiting asbestos
liability.
Even more interesting is Halliburton's governmental record under
Cheney. In an August 2000 report, the Center for Public Integrity noted that
Cheney had said publicly the United States should lift restrictions on
American corporations in countries listed by the government as sponsoring
terrorism. Hey, that was then, this is now.
Despite repeatedly claiming his company would not do business
with Iraq -- he was defense secretary during the Persian Gulf War --
Halliburton racked up $23.8 million in sales to Iraq in '98 and '99. It did
so by using two European subsidiaries, so Halliburton was not directly
violating the sanctions against Iraq. Hey, it was business.
And striking another blow for freedom from government
interference, Cheney led Halliburton into the top ranks of corporate welfare
hogs, benefiting from almost $2 billion in taxpayer-insured loans from the
U.S. Export-Import Bank and the Overseas Private Investment Corp. In the
five years before Cheney joined the company, it got a measly $100 million in
government loans. Cheney also specialized in getting government contracts
for the firm. During his five years as CEO, Halliburton got $2.3 billion in
contracts, compared to only $1.2 billion in the five years before he took
over.
Most of the government work was done by Halliburton subsidiary
Brown & Root, the construction firm, thus reinstating a fine old Texas
tradition. Brown & Root was Lyndon Johnson's major money source: It was to
LBJ what Enron was to George W.
This brings to mind a famous story from the Kennedy-Johnson
campaign in 1960 relished by Texans. It's after the election, and the
Democrats win. Kennedy and Johnson are sittin' in the Oval Office the first
day, and the phone rings. It's the Pope of Rome (Texans used to specify "of
Rome," lest you should confuse him with some other pope) on the phone. He
says, "John, my boy, the Vatican roof is leaking something fierce, we were
hopin' y'all might fix it for us."
"Of course, Mr. Pope, sir. Just let me check with my vice
president. Lyndon, the Pope's on the phone and wants to know if we can fix
the Vatican roof for him."
"That's fine with me," says Johnson. "Just make sure Brown &
Root gets the contract."
Nice to see tradition reassert itself.
To find out more about Molly Ivins and read features by other
Creators Syndicate writers and cartoonists, visit the Creators Syndicate web
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