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CHENEY’S EARLY YEARS. Dick Cheney’s political career dated back to the 1970s when, as a Wyoming congressman, he had one of the most conservative voting records of any member of Congress during his five terms in the House. The Washington Post (July 27, 2000) spelled out his position on numerous issues. Cheney voted against the Equal Rights Amendment, abortion rights, and a resolution to urge the release of Nelson Mandela from a South African prison during apartheid. He was one of just 21 lawmakers who opposed the Federal Safe Drinking Water Act. He was one of 33 Republicans who opposed authorizing funds for Head Start. Cheney took an even harder anti-gun control position than Reagan’s attorney general, Edwin Meese III, who initially opposed the plastic gun ban but changed his mind after law enforcement groups lobbied him. He opposed abortion rights and voted against federal funding of abortions even in cases of rape, incest, or when a woman’s life is in danger. As congressman, he opposed funding for the Clean Water Act, the Safe Drinking Water Act, and the Endangered Species Act.

Cheney also opposed funding for Head Start. He voted against spending more on “Superfund” environmental cleanups and supported oil drilling in Alaska’s Arctic National Wildlife Refuge. But he opposed gas and oil leasing in his home state of Wyoming and wanted to designate 650,000 additional acres in Wyoming as wilderness areas. Cheney was a staunch supporter of a strong defense and backed Reagan’s Star Wars, the deployment of the MX missile, production of new chemical weapons, and military aid to the Nicaraguan Contras. He favored raising the Social Security retirement age from 65 to 67 . In the area of civil rights, Cheney opposed busing to achieve racial desegregation in public schools, and he supported prayer in public schools. Cheney’s track record shows that he opposed limiting contributions by political action committees. Finally, he opposed coverage of long-term home care for the chronically ill under Medicare and voted against a measure that would have shielded Medicare beneficiaries from bills for catastrophic illnesses and provided prescription drug coverage under Medicare.

SECRETARY OF DEFENSE. In 1989, President George H. Bush appointed Cheney his secretary of defense. Almost immediately, Cheney paid Texas-based Brown & Root Services (BRS) $3.9 million to produce a classified report detailing how private companies -- like itself -- could help provide logistics for American troops in potential war zones around the world. BRS specializes in such work. From 1962 to 1972, the company worked in the former South Vietnam building roads, landing strips, harbors, and military bases. Later in 1992, the Pentagon gave the company an additional $5 million to update its report. That same year, BRS won a massive, five-year logistics contract from the United States Army Corps of Engineers to work alongside American GIs in places like Zaire, Haiti, Somalia, Kosovo, the Balkans, and Saudi Arabia.

A multi-million dollar lawsuit marred Cheney’s career while serving in the Defense Department. As secretary of defense, he acted so precipitously in canceling a Navy jet program that he helped spark a lawsuit that could expose the government to billions of dollars in judgments. The controversy began in 1988 when the Navy contracted with the Boeing and General Dynamics to build the A-12, which was to be a “stealthy” jet that would take off from aircraft carriers. Although the other stealthy warplane of that period, the B-2, was suffering colossal cost overruns, the Pentagon insisted the A-12 work be built by the two aerospace giants under a fixed-price contract. But the A-12 soon hit technical snags, especially in mastering the art of stealth. The two firms overspent their budgets, and deadlines were missed. But officials of the Navy and the firms mostly reported up the chain of command that all was well. Finally, on the eve of the Gulf War, Cheney made the decision to cancel the program, leading to 20,000 defense layoffs. Some Navy officials projected that it compromised naval air power for years.

Author James Stevenson (The $5 Billion Misunderstanding) documented several warnings that Cheney received about the A-12’s $1 billion overruns and schedule problems. According to Stevenson, “He (Cheney) was given numerous warnings, and he either heard them or he didn’t. If he didn’t, he was a manager asleep at the switch. If he did, he made misleading comments to Congress.”

Cheney denied at trial in 1996 that he ordered the termination. But according to the judge and as reported in the Washington Post (August 7, 2000), he acknowledged doing so in a letter to President Bush on January 4, 1991. Cheney testified: “The A-12, I did terminate. ... No one could tell me how much the program was going to cost. ... Data that had been presented at one point a few months ago turned out to be invalid. ...So after agonizing over it, I made a decision to shut down the program.”

In his decision, the trial judge, Robert H. Hodges Jr. of the United States Court of Federal Claims, raised the possibility that Cheney misstated events when he played down his role in the killing of the A-12 contract. Friends of Cheney vehemently denied that allegation, and Cheney himself has refused comment. After he terminated the A-12 bomber, a federal judge ruled that the United States government had to compensate two defense contractors $2 billion. General Dynamics and Boeing were the two plaintiffs in the civil suit that generated 70 million pages, half of which were highly classified. Later, an appeals court overturned the decision on technical grounds and a retrial was scheduled.

HALLIBURTON’S CEO. After Clinton’s election cost Cheney his government job, Cheney wound up in 1995 as CEO of Halliburton, the Dallas-based oil services giant -- which just happens to own BRS. Since then, he made millions running a business that provided services to that same military. That business contributed a quarter-million dollars to the Republican cause so far this election cycle.

According to the New York Times (July 31, 2000), Cheney collected more than $10 million in salary and stock payments from the company. In addition, he was the company’s largest individual shareholder, holding stock and options worth another $40 million. Those holdings undoubtedly were made more valuable by the ever-more lucrative contracts BRS continued to score with the Pentagon.

Since joining Halliburton in 1995, Cheney was paid at least $12.5 million and received stock and options worth nearly $39 million at its current share price. On the very day that Cheney accepted the vice-presidential post, the board of the Halliburton approved a retirement package worth an estimated $20 million, according to the New York Times (August 12, 2000). The board of directors allowed Cheney to avoid a potentially costly aspect of his employment contract which said that he would forfeit some of his compensation if he retired before age 62 without permission. By permitting Cheney to treat his departure as early retirement, the directors allowed him to keep $10 million worth of stock and options he would have forfeited had he simply resigned.

Cheney said that he would sell his stake in Halliburton, if elected, before he took office. But under Halliburton’s stock option plan, he would not be allowed to sell the options which could not be transferred except on death. As a result, he would have to either abandon the holding or keep it until after the November general election, thus giving him a large stake in the future of Halliburton while he serves as vice president. The chief financial officer of Halliburton, Gary Morris told the New York Times (August 17, 2000) that under the stock option plan, there was no way for Cheney to transfer the options, such as by giving them to a charity, before they were exercised. Halliburton said that it would report an $8.5 million expense as a result of Cheney’s departure.

The New York Times (October 25, 2000) reported that Cheney made nearly $46,000 on stock investments in the summer of 1999 -- for an 80 percent return -- by gaining access to nine initial public offerings for technology companies. During the October 5 vice presidential debate, Cheney claimed that "the government had absolutely nothing to do" with the wealth that he achieved in the private sector as head of the company.

During Cheney’s tenure with Halliburton, the company’s subsidiaries which registered in tax-friendly locations ballooned from nine in 1995 to 44 in 1999. That led to a dramatic drop in Halliburton’s federal taxes, which fell from $302 million in 1998 to less than zero -- to an $85 million rebate -- in 1999. (Los Angeles Times, August 5, 2002)

INVESTIGATING HALLIBUTON -- WHAT DID CHENEY KNOW? In May 2002, it was revealed that Halliburton was under investigation by the Securities and Exchange Commission. There were allegations that the Dallas-based firm waited a year to tell investors it was using a questionable new accounting practice to boost earnings. Meanwhile, Halliburton’s stock plummeted 50 percent – from the time when Cheney left the firm – to mid-2002.

In 1998, Halliburton began recording as immediate income the expected -- but not guaranteed -- future payments from overruns in its cost-plus construction contracts. The company made the move with the approval of its auditor, Arthur Andersen. In fact, in a 1996 promotional video, Cheney had praised Halliburton’s accountants, Arthur Andersen, for their advice “over and above the, just sort of the normal by-the-books audit arrangement.” (Washington Post, July 15, 2002)

Halliburton’s scheme produced an extra $100 million in claimed profits, but the company did not report the accounting change that made it possible until a year later. It was uncertain whether Cheney had final responsibility for Halliburton’s books. In a memo in 2000 to his colleagues at Arthur Andersen, the partner who managed the Halliburton account boasted of his close relationship with Cheney. The partner, Terry Hatchett, said the relationship was so close that Hatchett had remained lead partner on the Halliburton account even after he moved from Dallas to Tokyo to oversee Andersen’s Asian operations. In addition, while he was an executive at Halliburton, Cheney appeared in a marketing video extolling Andersen’s services. (Los Angeles Times, June 4, 2002; New York Times, May 30, 2002)

Current and former executives at Halliburton described Cheney as a hands-off executive who left daily management to David Lesar, a former Andersen partner who at the time was Cheney’s second-in-command. Cheney declined to comment. (Los Angeles Times, June 4, 2002; New York Times, May 30, 2002)

In early June, Halliburton settled a group of 30 asbestos lawsuits, most involving life-threatening cases of cancer, for an unspecified amount of money. The settlement involved cases pending in New York and was “at a value consistent with the company's historical averages for these types of claims,” the company said. (Los Angeles Times, June 4, 2002)

After August 16, 2000, his last day at Halliburton, Cheney exercised stock options and sold 660,000 shares between Aug. 21 and 28 for $35 million. Halliburton shares were soaring because of high oil prices. Though Cheney was under pressure to sever his future financial interest in Halliburton, conflict-of-interest laws did not require the sale. (Washington Post, July 15, 2002)

When Cheney left Halliburton, outward signs were good for the company. On July 27, 2000, Deutsche Banc Alex. Brown analysts wrote that “quarterly earnings have impressively turned the corner, in our opinion.” Even as late as October 16, Jefferies & Co. analysts wrote that “Halliburton’s earnings should show greater growth momentum in 2001 as the Engineering & Construction business turns decidedly more positive.”

But on October 24, analysts changed their appraisal of the economic strength of Halliburton. They said Halliburton was encountering weak orders and high costs in its engineering and construction businesses -- about a third of the company. To rectify matters, it announced plans to combine the unit’s two businesses, essentially reversing Cheney’s strategy, which was to make each stand alone.

This change led to asset sales, layoffs and a $120 million after-tax charge against earnings. Cheney’s successor, David Lesar, told analysts he was “not at all satisfied with this situation.” Analysts sharply reduced their earnings forecasts.

A day later, Halliburton acknowledged it was the target of a federal grand jury investigation related to overbilling of the government at Fort Ord in California. By November 13, Jeffries & Co. wrote, “Halliburton’s stock has lost between $3 billion and $4 billion of total market value.” The researchers attributed half of that to the bad news about the engineering business, and half to worries about Halliburton’s asbestos troubles “since Owens-Corning filed for bankruptcy protection” in October. (Newsweek, July 22, 2002; Associated Press, July15, 2002)

When Halliburton’s earnings dropped well below Wall Street’s expectations, the company suddenly changed its accounting rules. By assuming it would be able to collect on cost overruns on myriad construction projects, Halliburton was able to inflate profits by $234 million over a four-year period.

Halliburton failed to disclose its accounting changes to the SEC or the company’s investors for more than a year afterward, leading to more than a dozen lawsuits alleging fraud. (The Nation, July 21, 2002)

According to Halliburton’s Chief Financial Officer Doug Foshee, the energy giant it accounted for construction claims and change orders in accordance with accepted accounting practices applicable to the construction industry. Foshee also maintained that its investigation came as a result of an article in the New York Times on May 27, 2002, regarding construction job claims and change orders that were negotiated with customers. (Los Angeles Times, June 4, 2002; New York Times, May 30, 2002)

Foshee said the change of accounting method followed a strategic move at its construction and engineering group toward fixed-price projects and away from traditional “cost-plus” deals that guaranteed contractors a certain profit margin over and above their costs. (Los Angeles Times, June 4, 2002; New York Times, May 30, 2002)

In 2003, allegations were made that Halliburton distributed bribe money between 1995 and 2000, while Cheney served as CEO. Halliburton and a large French petro-engineering company, Technip, owned a $6 billion gas liquification factory in Nigeria on behalf of Shell Oil. Judge Renaud van Ruymbeke believed that some or all of $180 million in so-called secret “retrocommissions” paid by Halliburton and Technip were, in fact, bribes given to Nigerian officials and others in order to construct the plant. (Journal du Dimanche, December 21, 2003)

Judge van Ruymbeke believed that a London lawyer, Jeffrey Tesler, was paid the $180 million as a “commercial consultant” for a British company called TriStar to broker the deal between Halliburton and the Nigerian government. Tesler had worked for Halliburton for thirty years while he was the financial adviser to dictator General Sani Abacha. (The Nation, January 12, 2004)

Abacha’s oil minister was Dan Etete was suspected of having used some of the alleged bribe money to buy himself expensive property in Paris and Normandy. In December 2003, Etete testified that Tesler laundered the $180 million through offshore and other accounts, and that part of the money wound up in Abacha’s bank account. (The Nation, January 12, 2004)

HIT WITH A BARRAGE OF LAWSUITS. In early June, Halliburton settled a group of 30 asbestos lawsuits, most involving life-threatening cases of cancer, for an unspecified amount of money. The settlement involved cases pending in New York and was “at a value consistent with the company's historical averages for these types of claims,” the company said. (Los Angeles Times, June 4, 2002)

Then Cheney received more bad news. He was hit with a lawsuit that accused him of accounting fraud while at Halliburton. On July 10, the Washington-based group, Judicial Watch, filed litigation that alleged that Cheney as chairman and CEO of Halliburton engaged “in the overvaluation of the company’s shares, thereby deceiving investors and others.” It was in early 2002 that Judicial Watch sued for access to records of Cheney’s energy task force when he refused to publicize the names of its members, presumably because they all included anti-environmental corporate officials. The suit named 10 other company board members. (The Guardian, July 10, 2002)

Quite ironically, the lawsuit against Cheney was the worst timing for the Bush administration, since it came when Republicans and especially the president himself were desperately trying to distance themselves from charges of corporate illegalities. The litigation was filed just one day after Bush spoke on national television to Wall Street investors, calling on them to engage in ethical behavior.

The lawsuit against Cheney also came just several days after public documents indicated that Bush himself had acted unethically and perhaps illegally in failing to file papers in a timely fashion after he dumped nearly a million in stock in his failing Harken Energy company. Bush’s own conduct as a businessman had been questioned, since a leaked internal SEC memo detailed his 34-week delay in reporting stock sales worth nearly $1 million while serving as a director of Harken Energy more than a decade earlier.

The Judicial Watch lawsuit revolved around Halliburton’s accounting practices adopted in 1998 which recognized some of its unresolved claims against engineering and construction clients as revenue, even though the amounts of money at stake were still in dispute. Before 1998, the company was more cautious, reporting such revenue only after settling with customers.

Judicial Watch chairman and counsel Larry Klayman said, “We’re seeking actual and punitive damages for allegations of securities fraud, for changing accounting practices and not advising the public of these changes. To look the other way for the vice president would be to set a precedent that the Washington elite are above the law.” (The Guardian, July 10, 2002)

Two private groups -- the Sierra Club and the conservative group Judicial Watch -- had sued the Bush administration because it refused to release the documents. In its lawsuit, Judicial Watch accused Halliburton of using a change in accounting practices to overstate revenue by $445 million from 1999 through 2001. (Washington Post, October 25, 2002)

After a full year, Cheney still worked to stonewall the court order calling for the release of any documents on the energy plan. Just days before a court-imposed deadline, the Bush administration said that it had fully reviewed only two out of 12 boxes of documents at issue in lawsuits over Cheney’s energy task force. In a three-page court filing, the administration said it was still sorting through 10,000 e-mails to find several thousand messages about the Cheney panel. (Los Angeles Times, October 30, 2002)

INVESTIGATING HALLIBURTON. In December, the SEC begun a formal investigation into allegations that Halliburton had improperly accelerated the booking of revenue from construction work, a practice that began when Vice President Cheney was the company’s chief executive. In the fourth quarter of 1998, Halliburton began to book revenue on the assumption that its customers would pay at least part of the cost overruns, although they remained in dispute. Before that, Halliburton had been more conservative, reporting revenue from overruns only after settling with its customers. Cost overruns still in dispute represented 50 percent of Halliburton’s operating profit in the fourth quarter of 1998, according to company financial reports.