Kerry Ad Falsely Accuses Cheney on Halliburton

The_Neon_Cowboy · Oct 7, 2004, 12:11 AM

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Quote:

Contrary to this ad's message, Cheney doesn't gain financially from the contracts given to the company he once headed.
Summary

A Kerry ad implies Cheney has a financial interest in Halliburton and is profiting from the company's contracts in Iraq. The fact is, Cheney doesn't gain a penny from Halliburton's contracts, and almost certainly won't lose even if Halliburton goes bankrupt.

The ad claims Cheney got $2 million from Halliburton "as vice president," which is false. Actually, nearly $1.6 million of that was paid before Cheney took office. More importantly, all of it was earned before he was a candidate, when he was the company's chief executive.

Analysis

A Kerry ad released Sept 17 once again attacks Cheney's ties to Halliburton, implying that Cheney is profiting from the company's contracts in Iraq. That's false.

The ad isn't subtle. It says, "As vice president, Dick Cheney received $2 million from Halliburton. Halliburton got billions in no bid contracts in Iraq. Dick Cheney got $2 million. What did we get?" And it implies that Cheney lied to the public when he said in a TV interview that "I have no financial interest in Halliburton of any kind."

But as we document here, Cheney has insulated himself financially from whatever might happen to Halliburton. The Kerry ad misstates the facts.

$2 Million

To start, the $2 million figure is wrong. It is true that Cheney has received just under $2 million from Halliburton since his election, but nearly $1.6 million of that total was paid before Cheney actually took office on Jan. 20, 2001. Saying Cheney got that much "as vice president" is simply false.

We asked Cheney's personal attorney to document that, and he did, supplying several documents never released publicly before:

A Halliburton [color=#0000ff]pay statement[/color] dated Jan 2, 2001 shows just under $147,579 was paid that day as "elect defrl payou," meaning payout of salary from the company's Elective Deferral Plan. That was salary Cheney had earned in 1999, but which he had chosen previously to receive in five installments spread over five years.
Another [color=#0000ff]pay statement[/color] dated Jan. 18 shows $1,451,398 was paid that day under the company's "Incentive Plan C" for senior executives. That was Cheney's incentive compensation -- bonus money -- paid on the basis of the company's performance in 2000. Cheney had formally resigned from the company the previous September to campaign full time, but the amount of his bonus couldn't be calculated until the full year's financial results were known.

Cheney's personal financial disclosure forms, together with the pay statements just mentioned, show that Cheney has received $398,548 in deferred salary from Halliburton "as vice president." And of course, all of that is money he earned when he was the company's chief executive officer. Cheney was due to receive another payment in 2004, and a final payment in 2005.

The Kerry ad isn't the only place the false $2 million figure appears. The Democratic National Committee also gets it wrong on their [color=#0000ff]website[/color]. The dates of the Halliburton payments don't appear on Cheney's personal financial disclosure form from 2001, and the DNC assumed -- incorrectly as we have shown -- that all the 2001 payment were made after he took office.

Deferred Salary

The $398,548 Halliburton has paid to Cheney while in office is all deferred compensation, a common practice that high-salaried executives use to reduce their tax bills by spreading income over several years. In Cheney's case, he signed a Halliburton form in December of 1998 choosing to have 50% of his salary for the next year, and 90% of any bonus money for that year, spread out over five years. (As it turned out, there was no bonus for 1999.) We asked Cheney's personal attorney to document the deferral agreement as well, and he supplied us with a copy of the [color=#0000ff]form[/color] , posted here publicly for the first time.

Legally, Halliburton can't increase or reduce the amount of the deferred compensation no matter what Cheney does as vice president. So Cheney's deferred payments from Halliburton wouldn't increase no matter how much money the company makes, or how many government contracts it receives.

On the other hand, there is a possibility that if the company went bankrupt it would be unable to pay. That raises the theoretical possibility of a conflict of interest -- if the public interest somehow demanded that Cheney take action that would hurt Halliburton it could conceivably end up costing him money personally. So to insulate himself from that possible conflict, Cheney purchased an insurance [color=#0000ff]policy[/color] (which cost him$14,903) that promises to pay him all the deferred compensation that Halliburton owes him even if the company goes bust and refuses to pay. The policy does contain escape clauses allowing the insurance company to refuse payment in the unlikely events that Cheney files a claim resulting "directly or indirectly" from a change in law or regulation, or from a "prepackaged" bankruptcy in which creditors agree on terms prior to filing. But otherwise it ensures Cheney will get what Halliburton owes him should it go under.

Cheney aides supplied a copy of that policy to us -- blacking out only some personal information about Cheney -- which we have posted here publicly for the first time.

Stock Options

That still would leave the possibility that Cheney could profit from his Halliburton stock options if the company's stock rises in value. However, Cheney and his wife Lynne have assigned any future profits from their stock options in Halliburton and several other companies to charity. And we're not just taking the Cheney's word for this -- we asked for a copy of the legal agreement they signed, which we post [color=#0000ff]here[/color] publicly for the first time.

The "Gift Trust Agreement" the Cheney's signed two days before he took office turns over power of attorney to a trust administrator to sell the options at some future time and to give the after-tax profits to three charities. The agreement specifies that 40% will go to the University of Wyoming (Cheney's home state), 40% will go to George Washington University's medical faculty to be used for tax-exempt charitable purposes, and 20% will go to [color=#0000ff]Capital Partners for Education[/color] , a charity that provides financial aid for low-income students in Washington, DC to attend private and religious schools.

The agreement states that it is "irrevocable and may not be terminated, waived or amended," so the Cheney's can't take back their options later.

The options owned by the Cheney's have been valued at nearly $8 million, his attorney says. Such valuations are rough estimates only -- the actual value will depend on what happens to stock prices in the future, which of course can't be known beforehand. But it is clear that giving up rights to the future profits constitutes a significant financial sacrifice, and a sizeable donation to the chosen charities.

"Financial Interest"

Democrats have taken issue with Cheney's statement to Tim Russert on NBC's Meet the Press Sept. 14, 2003, when he said he had no "financial interest" in Halliburton:

Cheney (Sept. 14, 2003): I've severed all my ties with the company, gotten rid of all my financial interests. I have no financial interest in Halliburton of any kind and haven't had now for over three years. And as vice president, I have absolutely no influence of, involvement of, knowledge of in any way, shape or form of contracts led by the Corps of Engineers or anybody else in the federal government.

Shortly after that, Democratic Sen. Frank Lautenberg released a legal analysis he'd requested from the Congressional Research Service. Without naming Cheney, the memo concluded a federal official in his position -- with deferred compensation covered by insurance, and stock options whose after-tax profits had been assigned to charity -- would still retain an "interest" that must be reported on an official's annual disclosure forms. And in fact, Cheney does report his options and deferred salary each year.

But the memo reached no firm conclusion as to whether such options or salary constitute an "interest" that would pose a legal conflict. It said "it is not clear" whether assigning option profits to charity would theoretically remove a potential conflict, adding, "no specific published rulings were found on the subject." And it said that insuring deferred compensation "might" remove it as a problem under conflict of interest laws.

Actually, the plain language of the Office of Government Ethics regulations on this matter seems clear enough. The regulations state: "The term financial interest means the potential for gain or loss to the employee . . . as a result of governmental action on the particular matter." So by removing the "potential for gain or loss" Cheney has solid grounds to argue that he has removed any "financial interest" that would pose a conflict under federal regulations.

Conflict of Interest

It is important to note here that Cheney could legally have held onto his Halliburton stock options, and no law required him to buy insurance against the possibility that Halliburton wouldn't pay the deferred compensation it owes him. Both the President and Vice President are specifically exempted from federal conflict-of-interest laws, for one thing, as are members of Congress and federal judges.

And even federal officials who are covered by the law may legally own a financial interest in a company, provided they formally recuse themselves -- stand aside -- from making decisions that would have a "direct and predictable effect on that interest." And Cheney says he's done just that.

Cheney says he takes no part in matters relating to Halliburton, and so far we've seen no credible allegation to the contrary. Time magazine reported in its June 7 edition that an e-mail from an unnamed Army Corps of Engineers official stated that a contract to be given to Halliburton in March 2003 "has been coordinated w VP's [Vice President's] office." But it wasn't clear who wrote that e-mail, whether the author had direct knowledge or was just repeating hearsay, or even what was meant by the word "coordinated," which could mean no more than that somebody in Cheney's office was being kept informed of contract talks.

Indeed, a few days later it was revealed that Cheney's chief of staff Lewis "Scooter" Libby was informed in advance that Halliburton was going to receive an earlier contract in the fall of 2002 -- to secretly plan post-war repair of Iraq's oil facilities. But being informed of a decision after it is made is a far cry from taking part in making it. And according to the White House, Libby didn't even pass on the information to Cheney anyway.

So to sum up, this Kerry ad's implication that Cheney has a financial interest in Halliburton is unfounded and the $2 million figure is flat wrong.

Sources

"Vice President Dick Cheney discusses the war with Iraq, the economy and other topics," NBC News "Meet the Press" 14 Sep 2003.

Jack Maskell, "Official's Stock Options In and Deferred Compensation From a Corporation as a "Financial Interest" of an Executive Branch Official in Such a Corporation," [color=#0000ff]Memorandum[/color] , American Law Division, Congressional Research Service, 22 Sep 2003.

US Code of Federal Regulations,TITLE 5, CHAPTER XVI--OFFICE OF GOVERNMENT ETHICS, PART 2640--INTERPRETATION, EXEMPTIONS AND WAIVER GUIDANCE CONCERNING 18 U.S.C. 208 (ACTS AFFECTING A PERSONAL FINANCIAL INTEREST) 5CFR2640.103(b)

Timothy J. Burger and Adam Zagorin, "The Paper Trail: Did Cheney Okay a Deal?", Time magazine, 7 June 2004: 42.

Larry Margasak, "[color=#0000ff]Cheney never heard plan[/color] to give work to Halliburton for rebuilding of Iraq," The Associated Press 16 June 2004.

http://www.factcheck.org/article.aspx?docID=261

The_Neon_Cowboy · Oct 7, 2004, 12:11 AM

Quote:

Kerry-Edwards Ad

"Cheney Halliburton"

Cheney: I have no financial interest in Halliburton of any kind and haven't had now for over three years.

Announcer: The truth: As vice president, Dick Cheney received $2 million from Halliburton. Halliburton got billions in no bid contracts in Iraq. Dick Cheney got $2 million. What did we get? A $200 billion dollar bill for Iraq. Lost jobs. Rising health care costs. It's time for a new direction.

John Kerry. Stronger at home. Respected in the world.

Announcer: I'm John Kerry, and I approve this message

,,,

Dom · Oct 7, 2004, 01:49 AM

And we all know Bush ads never falsely accused Kerry of anything.

raid517 · Oct 7, 2004, 02:00 AM

I still don't think it's a healthy association. I mean your old company sponsors you and HELPS you become vice president - after which the gain to the tune of billions from government sponsored contracts - with a no doubt cast iron understanding that if Rumsfeld ever left office - the charimans job would be something he could just walk into.

Why that company? Why not one with much less of a direct involvement with the government? After all it was more than Just Rumsfeld who profited from Halliburton over the years.

I don't care if you are a republican - if you are a decent minded person you would still have to think that some relationships can still just be too close.

Government shouldn't be just another business opportunity.

GJ

The_Neon_Cowboy · Oct 7, 2004, 02:27 AM

Quote:

Originally Posted by raid517

I still don't think it's a healthy association. I mean your old company sponsors you and HELPS you become vice president - after which the gain to the tue of billions from government sponsored contracts - with a no doubt cast iron understanding that if Rumsfeld ever left office - the charimans job would be something he could just walk into.

Why that company? Why not one with much less of a direct involvement with the government? After all it was more than Just Rumsfeld who profited from Halliburton over the years.

I don't care if you are a republican - if you are a decent minded person you would still have to think that some relationships can still just be too close.

Government shouldn't be just another business opportunity.

GJ

the comany wasn't chosen by bush or chaey buy buy the buracrats on capitol hill. Thier the only company thats they knew for sure could handle the job from day one. Especally from thier use un no bid contacts under the clinton administartion....

it's a no bid contract becouse far as thier conserned it's of too high of importance to leave to chance and they good good results from previous contracts doing the same thing they needed them to do. As they said they wer the only ones who could...

raid517 · Oct 7, 2004, 03:21 AM

Some feking chance - particularly when the arms and appropriations comittees are predominantly staffed by republicans - several of which with direct or indirect links to Rumsfeld - and possibly to Halliburton too.

Not everything in Fahrenheit 9/11 was total bull. There is such a thing as work history.

GJ

ronnn · Oct 7, 2004, 04:20 AM

So why was Cheney involved in a sleazy company like that?

pr0digal jenius · Oct 7, 2004, 06:01 AM

cheney supports the cash-centric view fo the universe....

digerati · Oct 7, 2004, 07:27 AM

As if the Bush or right wing campaigns have never said anything false against Kerry? People shouldn't even watch these commercials anymore.

ChickenofBristo · Oct 11, 2004, 03:38 PM

Haliburton is basically the only US company that can do what it does overseas with oil fields. The reason Haliburton has been given no bid contracts is because only they can do it. Believe it or not Bill Clinton gave Haliburton no bid contracts on several occasions. And actually Cheney LOST money because he had to give up ALL of his Haliburton stock when he became vice president. In reality he would have made more money if he had not become vp and stayed a stock holder. The payments made to Cheney were standard payments made to an outgoing officer of the company.

ColdPenguin · Oct 24, 2004, 01:19 AM

Bill Clinton gave the Saudi-bin Laden Group a no bid contract to rebuild one of the US military barracks that was blown up by alquaeda
HA

ColdPenguin · Oct 24, 2004, 01:44 AM

Halliburton does a lot more in Iraq than just oil services. They are a supplier, and since the more they spend the more profit they make, they often pay the highest price possible. The problem isn't just "no-bid" it's the "cost-plus" part, which gives an incentive to waste as much money as possible.

I also think I remember that during WWII war profiteering was rampant under Roosevelt until Truman or someone setup a group to whip it into shape.

Back to Iraq, I think I contributing factor to all the resistance there is the massive unemployment rate. A lot of people probably don't have anything better to do than fight. We should try to make Iraqis do as much work as possible rather then contracting at home quite as much. Though American companies wouldn't be making as much (which would be a detriment to the economy some may argue), helping Iraq's economy by decreasing unemployment is much better in the long run and would result in less resistance, and less american tax dollars wasted. Here's an example of something that happened in 2003:

$15m Amount of a contract awarded to an American firm to build a cement factory in Iraq.

$80,000 Amount an Iraqi firm spent (using Saddam's confiscated funds) to build the same factory, after delays prevented the American firm from starting it.

Unfortunately now in late 2004 things have regressed and many Iraqi's might be a little too intimidated to work on something funded by Americans, so its a difficult situation.

But anyway back to how I started, the problem isn't really the "no-bid" part of contract its the "cost-plus" part

philou · Oct 24, 2004, 02:36 AM

The president in Afghasnistan is an old Halliburton consultant, do you know who put him in place and why it is not so clear

Did they were overcharging the US Army for oil ???

They are a bunch of scum, i wish u did not have the stupid law that prevented Clinton to stay in his chair

Hope you ll do it right...

Oct 7, 2004, 02:00 AM	#4
raid517 DriverHeaven Senior Member Join Date: Jul 2002 Posts: 2,518 Rep Power: 0	I still don't think it's a healthy association. I mean your old company sponsors you and HELPS you become vice president - after which the gain to the tune of billions from government sponsored contracts - with a no doubt cast iron understanding that if Rumsfeld ever left office - the charimans job would be something he could just walk into. Why that company? Why not one with much less of a direct involvement with the government? After all it was more than Just Rumsfeld who profited from Halliburton over the years. I don't care if you are a republican - if you are a decent minded person you would still have to think that some relationships can still just be too close. Government shouldn't be just another business opportunity. GJ Last edited by raid517; Oct 7, 2004 at 09:23 AM.

Oct 11, 2004, 03:38 PM	#10
ChickenofBristo DriverHeaven Newbie Join Date: Nov 2003 Location: Colorado Posts: 13 Rep Power: 0	Haliburton Haliburton is basically the only US company that can do what it does overseas with oil fields. The reason Haliburton has been given no bid contracts is because only they can do it. Believe it or not Bill Clinton gave Haliburton no bid contracts on several occasions. And actually Cheney LOST money because he had to give up ALL of his Haliburton stock when he became vice president. In reality he would have made more money if he had not become vp and stayed a stock holder. The payments made to Cheney were standard payments made to an outgoing officer of the company.

Oct 7, 2004, 01:49 AM	#3
Dom DriverHeaven Extreme Member Join Date: Jun 2002 Posts: 12,940 Rep Power: 0	And we all know Bush ads never falsely accused Kerry of anything.

Oct 7, 2004, 03:21 AM	#6
raid517 DriverHeaven Senior Member Join Date: Jul 2002 Posts: 2,518 Rep Power: 0	Some feking chance - particularly when the arms and appropriations comittees are predominantly staffed by republicans - several of which with direct or indirect links to Rumsfeld - and possibly to Halliburton too. Not everything in Fahrenheit 9/11 was total bull. There is such a thing as work history. GJ

Oct 7, 2004, 04:20 AM	#7
ronnn DriverHeaven Senior Member Join Date: Jul 2003 Posts: 617 Rep Power: 0	So why was Cheney involved in a sleazy company like that?

Oct 7, 2004, 06:01 AM	#8
pr0digal jenius Delete Me Join Date: Mar 2004 Posts: 14,648 Rep Power: 0	cheney supports the cash-centric view fo the universe....

Oct 7, 2004, 07:27 AM	#9
digerati Everyones life has worth Join Date: May 2003 Location: My Yellow Bug Posts: 3,779 Rep Power: 0	As if the Bush or right wing campaigns have never said anything false against Kerry? People shouldn't even watch these commercials anymore.

Oct 24, 2004, 01:19 AM	#11
ColdPenguin ***** goon Join Date: Feb 2003 Posts: 110 Rep Power: 0	Bill Clinton gave the Saudi-bin Laden Group a no bid contract to rebuild one of the US military barracks that was blown up by alquaeda HA

Oct 24, 2004, 01:44 AM	#12
ColdPenguin ***** goon Join Date: Feb 2003 Posts: 110 Rep Power: 0	Halliburton does a lot more in Iraq than just oil services. They are a supplier, and since the more they spend the more profit they make, they often pay the highest price possible. The problem isn't just "no-bid" it's the "cost-plus" part, which gives an incentive to waste as much money as possible. I also think I remember that during WWII war profiteering was rampant under Roosevelt until Truman or someone setup a group to whip it into shape. Back to Iraq, I think I contributing factor to all the resistance there is the massive unemployment rate. A lot of people probably don't have anything better to do than fight. We should try to make Iraqis do as much work as possible rather then contracting at home quite as much. Though American companies wouldn't be making as much (which would be a detriment to the economy some may argue), helping Iraq's economy by decreasing unemployment is much better in the long run and would result in less resistance, and less american tax dollars wasted. Here's an example of something that happened in 2003: $15m Amount of a contract awarded to an American firm to build a cement factory in Iraq. $80,000 Amount an Iraqi firm spent (using Saddam's confiscated funds) to build the same factory, after delays prevented the American firm from starting it. Unfortunately now in late 2004 things have regressed and many Iraqi's might be a little too intimidated to work on something funded by Americans, so its a difficult situation. But anyway back to how I started, the problem isn't really the "no-bid" part of contract its the "cost-plus" part

Oct 24, 2004, 02:36 AM	#13
philou DriverHeaven Junior Member Join Date: May 2002 Posts: 29 Rep Power: 0	The president in Afghasnistan is an old Halliburton consultant, do you know who put him in place and why it is not so clear Did they were overcharging the US Army for oil ??? They are a bunch of scum, i wish u did not have the stupid law that prevented Clinton to stay in his chair Hope you ll do it right...