Monday, June 07, 2004

Cheney still has financial ties to Halliburton

Why you're right:

1. Cheney still has stock options in Halliburton. In September 2003, Cheney told a national TV audience that "since I left [as CEO of] Halliburton to become George Bush's vice president, I've severed all my ties with the company, gotten rid of all my financial interest." Cheney, however, still owns 433,000 of stock options in Halliburton. The Congressional Research Service found that this constitutes "a continuing financial interest in the company." (CNN)

2. Cheney still receives a salary from Halliburton. Along with stock options, Cheney still receives a six-figure "deferred" salary from Halliburton each year. (CBS)

3. Cheney's office has "coordinated" the awarding of government contracts to Halliburton. Since taking office, Halliburton has been awarded billions in federal contracts. Cheney has adamantly denied any involvement in the awarding of federal contracts, insisting "as Vice President, I have absolutely no influence of, involvement of, knowledge of in any way, shape or form of contracts led by the [Army] Corps of Engineers or anybody else in the Federal Government." But an internal Pentagon e-mail obtained by Time Magazine revealed that a $7 billion contract was "coordinated w [the] VP's [Vice President's] office." (Time)

Why they're wrong:

1. Cheney claims that his stock options do not constitute a financial interest in Halliburton because he has pledged to give the proceeds to charity. But charitable giving has financial and personal benefits. Money given to charity is tax deductible. Further, chartable giving improves ones standing in the community. The bottom line: it is in Cheney's interest, financially and personally, for Halliburton's stock price to increase.

2. Cheney claims that his deferred compensation does not constitute a financial interest because he has purchased an insurance policy that ensures he still gets paid if the company goes bankrupt. Most insurance policies, however, have deductibles. Further, to collect on a large insurance policy it is usually necessary to litigate, or at least retain legal counsel, to prove that the conditions of the policy has been met. Cheney's position is the equivalent of arguing that someone who has car insurance has no incentive to drive safely because, should they get into an accident, they are covered.

3. A Pentagon spokesman says that the word "coordinate" in the internal Pentagon email was "a catch all phrase" that signified "it's time for this contract to be executed." But even that specious explanation means he lied when he said he has no advance knowledge in any way about Halliburton's contracts because his staff did have knowledge.

A Better Idea:

Cheney should divest or forfiet all financial interests in Halliburton. He should also disclose any and all communications between his office and the Pentagon regarding Halliburton.