His record as CEO that the Texas-based oil-field-services huge has been marred by a federal government investigation right into allegations the he fudged the books. His critics say it"s another case of this firm malfeasance. But the worst thing the vice president was guilty of to be mediocrity.




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THE FRIENDLY, SINCERE man IN the video clip is saying what wonderful company Arthur Andersen is and how lot he worths its counsel. “I get good advice, if girlfriend will, indigenous their people based upon exactly how we’re act business and how we’re operating, end and over just sort of the regular by-the-books auditing arrangement,” he says. “They’ve gained the traditional role to fill together our auditors . . . . They perform that extraordinarily well.”

The guy in the video clip is Richard B. “Dick” Cheney, the vice chairman of the unified States. The year to be 1996, once Cheney to be the chairman and CEO of Halliburton Company, a multibillion-dollar oil-field-services agency now based in Houston and also Arthur Andersen’s third-largest client. The 35-second point out was part of a promotional video that was distributed to Arthur Andersen’s partners only last year, ~ Cheney had become vice president and before Andersen was convicted that obstruction of justice in July in the investigation of Enron (its second-largest client)—an event that destroyed what was left that its an international accounting business. The video was uncovered in might by the wall surface Street Journal.

Cheney’s endorsement of Arthur Andersen is usual of the back-scratching the goes top top in the organization world. It was done long prior to Andersen ended up being a this firm felon. Yet as the Bush administration moves to smite the miscreants from Enron, WorldCom, and also other suppliers for perpetrating fraud top top the American people, Cheney’s cameo has taken on a new and much more ominous meaning. That’s since the evil president and his former employer are currently themselves subjects of a preliminary inspection by the Securities and Exchange commission for possible accounting improprieties sanctioned through Arthur Andersen. Its function is to watch if Halliburton make an accounting change in order come fudge its revenues and also then failed to disclose the change at the suitable time.

But the SEC probe is just component of Cheney’s Halliburton-related problems. Cheney left the firm in august 2000 v a stunning stock payoff of part $30 million. A little over a year later, Halliburton’s stock went into totally free fall, mainly the an outcome of asbestos liabilities the the firm acquired when Cheney engineered a 1998 merger v Dresser Industries, a Dallas-based provider the oil-field services. Those liabilities detonated in a collection of chuck jury verdicts in late 2001. The 63 percent fall in Halliburton’s stock price that year devastated ordinary shareholders. Few of those shareholders later on joined in class-action lawsuits against Halliburton, claiming that Cheney and others artificially inflated the company’s stock price and misrepresented its organization condition. A watchdog group dubbed Judicial watch filed suit for comparable reasons. And also of food a sit vice president under such scrutiny color etc reporters choose sugar draws ants: A questions on the Google find engine specifying “Cheney” and also “SEC” yields 30,000 hits. Can not to shiver this legal and also political tar baby, or come answer reporters’ questions, Cheney has been noticeably lacking from the nationwide debate about corporate fraud.

Cheney, who decreased through a spokesperson to be interviewed for this story, has addressed the SEC examination only once, in an appearance at mountain Francisco’s commonwealth Club in August. “I am, the necessity, restrained in regards to what I deserve to say around that matter,” that said, “because there are editorial writers almost everywhere America poised to put pen to record and blame to me for exercising undue, improper influence if i say also much around it.” Halliburton, ~ above the various other hand, has displayed no together reluctance, insisting the it and its former chairman had obeyed both the letter and the spirit of accountancy laws. “The simple assertion is the somehow Halliburton produced revenues and receivables out of midair,” claims David J. Lesar, the chairman, president, and CEO the Halliburton. “That’s just wrong. We adjusted the accountancy because the personality of our company changed. We think that us disclosed it once it essential to be disclosed. We’re really much working v the SEC, and ultimately it will be in between us and them to decision whether this disclosure was appropriate.” Lesar, one affable, low-key Midwesterner who was previously Cheney’s right-hand male at Halliburton, says that his agency has to be treated unfairly in the media. “Halliburton has come to be the political vehicle to acquire at the evil president,” the says. “It’s tough to strike him on foreign policy and the managing of the war but an extremely easy to obtain at him as CEO of a big public company in Texas.”


With all of this disadvantage news, the usual surfeit the TV pundits speculating top top Cheney’s fate, and Halliburton’s forceful denials, it is hard to separate truth from fiction. Shed in the swirling polemics the the political debate is the less glamorous but far more revealing administration story that lies behind it. Why did Halliburton’s accounting policies adjust under Cheney? In what business context did the make that determination and the decision to merge with Dresser? What did Cheney and also Halliburton know around the asbestos time bomb? go he press his $30 million eject button since of insider knowledge or is there some other explanation? just how accurate space the push accounts of Cheney’s plot that caused the SEC inquiry? just how serious is the SEC’s investigation, and also what is it likely to uncover? Those answers are uncovered only in a thorough parsing that Cheney’s tenure at Halliburton—something that, for every the breathless reportage on the subject, has actually never been done before. While all of these concerns have been reported in some degree, what follows is an effort to look past the slim volume of writing and talk-show gas and also put everything together into a single coherent narrative of Cheney’s five-year term as CEO.

For high-ranking this firm leaders, the nineties to be all about three things: mergers and acquisitions, i beg your pardon were lugged out in ~ a level unmatched in history; keeping profits up, which sometimes depended upon transforms in the method companies booked revenue; and making scads that money in the stock market from the revenue of shares and options. Cheney did every one of these, and he go them top top a titanic scale. However does that mean that that did something wrong?