NP a house of cards, trembling

[Doug Millison]

http://library.northernlight.com/FB20020714470000019.html?cb=0&dx=1006&sc=0#doc

Newsweek: Halliburton CEO Says Cheney Knew About Firm's Accounting
Practices; 'The Vice President Was Aware of Who Owed Us Money, And He
Helped Us Collect It' -- Republicans Want Army Secretary White to Resign to
Avoid Controversy Over Enron; 'How is It Going to Look When One of the Guys
Leading the War on Terrorism Takes the Fifth?' Says One GOP Source
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Story Filed: Sunday, July 14, 2002 11:01 AM EST

NEW YORK, Jul 14, 2002 /PRNewswire via COMTEX/ -- In his first extensive
interview on the vice president's role in the controversy at oil services
company Halliburton, current CEO David Lesar defended the firm's
bookkeeping and said that former CEO Dick Cheney was aware of the firm's
accounting methods, report Wall Street Editor Allan Sloan and Senior Writer
Johnnie L. Roberts. Lesar says Cheney knew that the firm was counting
projected cost-overrun payments as revenues, "The vice president was aware
of who owed us money, and he helped us collect it," Lesar tells Newsweek.
The firm says it has always accounted for overrun revenues the way it does
now, but the amounts weren't significant until the end of 1998. "We stand
behind the accounting treatment," Lesar said.

(Photo: http://www.newscom.com/cgi-bin/prnh/20020714/NYSU004 )

The Securities and Exchange Commission is looking into how Halliburton --
the company Cheney ran for five years -- booked revenues and profits from
fixed-price projects, and may seek Cheney's testimony, write Sloan and
Roberts. The question involves Halliburton counting projected payments from
cost-overruns as revenues while the work is under way, rather than waiting
until the projects are completed, Newsweek reports in the July 22 issue (on
newsstands Monday, July 15). Critics allege that the company changed its
accounting method for such contracts in 1998, boosting revenue and profits
considerably.

And Douglas Foshee, Halliburton's chief financial officer, tells Newsweek,
the SEC is investigating both whether the company accounted for these
revenues properly, and whether it adequately disclosed the information. He
said the disclosure consisted of changing some financial footnotes from one
year to the next. However, few people outside the company seem to have
picked up on the wording change.

Cheney's tenure at Halliburton raises some of the issues that have enraged
investors in companies such as Global Crossing and Enron: big fish making
millions from stock sales while small-fry shareholders and employees get
swallowed. Halliburton's stock has fallen 75 percent since Cheney left to
run for vice president -- twice as much as the market as a whole during
that period in large part because of fallout from a huge takeover Cheney
orchestrated in 1998. The vice president's office says they won't discuss
Halliburton issues. "His view is that it would be a distraction from what
he's trying to get done here," said Mary Matalin, Cheney's chief political
aide. His office has instead been referring calls to Halliburton, which
doesn't appreciate the attention. "At some point, he [Cheney] is going to
have to address these [accounting] questions," said Wendy Hall, a
Halliburton spokesperson.

Newsweek has also learned that Republicans on the Hill are quietly passing
the word that they'd prefer Army Secretary Thomas White to resign, even
though the White House has continued to back him. White cashed out as an
Enron executive with $31 million just before the company collapsed. Federal
investigators are combing through the wreckage of Enron, including trading
strategies used by White's Enron unit to hike electricity prices in
California in 2000 and 2001. He is scheduled to testify this week before a
Senate committee. And Republicans don't want to see him testify. They say
if he does, he will be forced to invoke his constitutional right not to
respond, reports Chief Political Correspondent Howard Fineman. "How is it
going to look when one of the guys leading the war on terrorism takes the
Fifth?" said a leading GOP source on the hill. "We're betting that he'll
quit."


                      (Read Newsweek's news releases at

http://www.Newsweek.MSNBC.com.  Click "Pressroom.")