Cheney offers to forfeit options

GOP nominee seeks to avoid appearance of conflict of interest

Democrats not impressed

September 02, 2000|By NEW YORK TIMES NEWS SERVICE

WASHINGTON - Dick Cheney, the Republican vice presidential candidate, said yesterday that if elected, he will forfeit stock options worth about $3.5 million in the energy services company that he left to run for office.

Cheney had been challenged by the Gore campaign for inviting a conflict of interest if he owned the options while in office.

He was precluded from selling the options, which he was awarded for his service as chief executive of the Halliburton Co., until 2001 at the earliest, and their value by then would be affected by the company's profits, which are sensitive to the price of oil.

Cheney released tax returns and financial disclosure forms yesterday showing his income skyrocketing, from $258,394 in 1992, his last year as secretary of defense, to just over $2 million in 1993 and then to $4,423,289 in 1999.

In a brief accompanying statement, Cheney said, "In order to avoid even the appearance of a conflict of interest, I am fully prepared to forfeit any options that have not vested by the time I assume office."

If he had kept the stock options, any decision in a Bush-Cheney administration would have been scrutinized for whether it was helping Halliburton's stock price.

The statement said that the forfeiture also covered 3,000 previously unreported stock options in Procter & Gamble, a consumer products company, which also cannot be sold until after the next administration takes office.

But the Procter & Gamble price is now below what it would cost him to exercise the options, so it is no loss to Cheney.

Previously, Cheney had declined to make a pledge to forfeit his options, saying only that he would do whatever he must to avoid a conflict of interest.

Cheney's financial disclosures, which he was required to file with the Federal Election Commission within 30 days of his nomination, also showed that when he was picked by Gov. George W. Bush of Texas as his running mate, Cheney received hundreds of thousands of dollars from Electronic Data Systems Corp., and that his wife, Lynne, has been paid as a director of the Lockheed Martin Corp., a major defense contractor, since 1995. Cheney was on the board of EDS, but resigned to run for vice president.

Explaining Cheney's decision to forgo the Halliburton options, his press secretary, Dirk Vande Beek, said that Cheney and his advisers had consulted with the Office of Government Ethics, which reviews the finances of federal officials, and with the Internal Revenue Service, and had determined that there was no way to turn the options over to charity.

Therefore, Vande Beek said, Cheney "will forfeit the unvested options."

However much the decision might cost Cheney if elected, the Gore campaign was not impressed.

Douglas Hattaway, a spokesman for the Gore campaign, said: "Cheney got caught with his hand in the cookie jar, and now he is trying to put the cookie back. It's a last-ditch attempt to separate the Bush-Cheney ticket from big oil."

The Cheneys' tax returns not only showed a sharp increase in adjusted gross income from 1992 to 1999, they also disclosed total contributions to charities of $209,832, or just over 1 percent of their 10-year income of $20,677,742.

Trying to put a more generous face on those figures, the Bush-Cheney campaign press release said yesterday that $442,152 went to charity.

That total was reached by adding $89,500 in honoraria that Cheney had to decline and therefore redirected to charity and $142,820 in grants from corporations on whose boards either Cheney or his wife served that matched the Cheneys' contributions.

The Cheneys were under no legal obligation to release their income tax returns, although many candidates, including Vice President Al Gore, have done so.

In April, Bush released information about his taxes, but not the actual returns, for which an extension to file had been requested.

The Cheney financial disclosure forms showed that Cheney remained a director of Procter & Gamble and Union Pacific, and that his wife served as a director of Lockheed Martin, Union Pacific Resources Corp., Reader's Digest Association, Exide Corp. and the AXP Mutual Fund.

But the biggest items on the form were two categories of Halliburton stock options, each valued at between $1 million and $25 million, in the ranges specified by the federal form.

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