Bush: Cheney will be cleared

Vice president did nothing wrong as CEO, Bush says

`A fine business leader'

Corporate scandals might become political liability

July 18, 2002|By David L. Greene | David L. Greene,SUN NATIONAL STAFF

WASHINGTON - President Bush defended Vice President Dick Cheney yesterday as "a fine business leader" and said he was confident that a government investigation into accounting practices at the vice president's former company would show that he did nothing wrong.

Cheney has offered little insight into any role he might have had in accounting practices at Halliburton Co., an energy services and construction company where he served as chief executive officer from 1995 to 2000.

Halliburton has been sued by shareholders and is under investigation by the Securities and Exchange Commission into whether it overstated profits at a time when Cheney was in charge.

That issue, along with questions about Bush's dealings as a businessman more than a decade ago, has put the White House on shaky ground as it tries to convince Americans that it is determined to fight corporate abuses.

The president was asked yesterday whether he would call on Cheney to speak publicly about his involvement at Halliburton. Bush replied by saying he has "great confidence" in Cheney.

"When I picked him, I knew he was a fine business leader and a fine experienced man," Bush said. "And he's doing a great job. That matter will run its course, the Halliburton investigation, and the facts will come out at some point."

Bush was asked later whether he was confident that the SEC would conclude that Cheney did nothing wrong. "Yes, I am," he replied.

With Americans nervous about corporate scandals and the sinking financial markets, Bush was put on the defensive as reporters pressed him about his and Cheney's corporate backgrounds during an appearance in the formal East Room with President Aleksander Kwasniewski of Poland - an event that was supposed to focus on foreign policy.

Bush did not budge when asked why he would not instruct the SEC to release documents from its investigations into his former company, Harken Energy Corp., where Bush was a board member. Among the issues the SEC looked at was whether Bush was guilty of insider trading for selling $848,000 in Harken stock shortly before the company announced a big loss.

The SEC has released some - but not all - of its Harken-related documents, including one that said it found insufficient evidence that Bush had committed any wrongdoing, and that it had decided to take no action.

"The key document said there is no case," Bush said, before changing the subject to the economy and his confidence that it will rebound. "The key thing for the American people is to realize that the fundamentals for economic vitality and growth are there," he said.

Mindful that questions about Bush's and Cheney's experiences in the corporate world might make Republicans vulnerable this election year, Democrats have pressured the White House to disclose information about the past business dealings of the two men.

Rep. Barney Frank, a Massachusetts Democrat, called on Cheney to "have a wide-open press conference."

Bush and Cheney, Frank said in an interview, "both did things that were not criminal, obviously." But the congressman said that Cheney, in particular, fit a pattern of corporate executives who have received generous stock options as compensation and have then sold the stock before the price plummeted, hurting most other investors.

"That's a bad pattern," Frank said. "And when it's the vice president of the United States, it's a particular problem. He needs to explain this. I mean, you've been through this, so help us get rid of this."

Rep. Henry A. Waxman, a California Democrat who was one of the earliest members to begin investigating the collapse of the Enron Corp., said yesterday that he has directed his staff to begin investigating Cheney's involvement with Halliburton.

Waxman called on Cheney and Bush to serve as "role models" and to donate substantial amounts of the money they received while serving as executives to workers who were displaced when their companies foundered after accounting irregularities were discovered.

The vice president, Waxman said, "has a moral responsibility to step forward and - as the president says he would like corporate executives to do - take some personal responsibility."

Cheney has not spoken publicly about Halliburton. Nor has he joined Bush in calling for aggressive measures to crack down on corporate executives who engage in deceitful accounting. A White House official said that Cheney was not commenting publicly on what he did or did not know about Halliburton's accounting because the SEC is investigating the matter.

Asked why Cheney had not taken a prominent role in the president's push for corporate accountability, the aide said that Bush takes the lead in almost all major initiatives. "And there is no reason to create a speech to fulfill a press demand," the official added.

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