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Daily Attacks Rock Bush Administration
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Daily
Attacks Rock Bush Administration
President and VP blasted for past business deals
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by
William Walker
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WASHINGTON — America's patriotic post-Sept. 11 honeymoon with President George
W. Bush is all but over, leaving him and Vice-President Dick Cheney to endure
daily attacks and allegations.
As a growing cloud of corporate accounting scandals hovers over Bush's pro-business
Republican administration, investors were left to suffer yesterday as markets
fell once again.
Despite reassuring words from the normally influential Federal Reserve
Board chairman Alan Greenspan, the Dow Jones industrial average closed down 166
points, the Standard & Poor's 500 Index was off 16 points, and the Nasdaq Composite
Index fell seven points after an earlier rally.
The political situation for Bush and Cheney is worsening daily, with multiple
new allegations of corporate misconduct by both men before they assumed office.
With the crucial mid-term election just 112 days away, it could hardly be worse
for the Republicans. More than 80 million Americans have invested in the stock
market, many of them relying on it for the health of their 401K retirement plans,
similar to Canada's RRSPs.
A vast majority of those panic-stricken stock market investors are either middle-aged
or retirement-aged.
"The one thing I really fear is the angry voter," Republican strategist Frank
Luntz said this week.
Members of Congress, furiously vying to be seen before the Nov. 12 election as
corporate crackdown chieftains, are passing bills and distancing themselves from
the scandal-plagued White House. Following a Senate bill that passed unanimously
Monday, the House, by a lopsided 391-28 vote, yesterday passed tough new criminal
penalties for corporate fraud, including jail terms for executives who deceive
investors.
Greenspan tried to sound upbeat in an appearance before the Senate banking committee
yesterday, but admitted corporate scandals had hurt business spending across America.
He also called for tougher penalties for CEOs who break the law.
Meanwhile, new revelations surfaced yesterday about Bush's controversial dealings
while with Texas oil company Harken Energy, and his role in purchasing and securing
a new stadium for the Texas Rangers baseball team. Other allegations related to
Cheney's tenure at Texas oil giant Halliburton, now under investigation by the
Securities and Exchange Commission also surfaced.
It was learned that Bush signed a 1990 "lockup" agreement with Harken, on whose
board and internal audit committee he served, not to sell shares he had received
from the company for at least six months. Aware of huge financial losses about
to be reported by the company, Bush sold his stock just two months later, reaping
a windfall of almost $850,000 (U.S.) before the stock price tumbled.
Why Bush sold the shares also became clearer. He was in the process of trying
to become a minor (1.8 per cent) partner in a group about to purchase the Texas
Rangers. He didn't have the cash ($606,000) needed, so he went to a bank to borrow
it and put up the Harken shares as collateral. When he sold the shares, he paid
off the bank loan — while he still could before the share price collapsed — and
other debts.
Bush's presidential run was possible only due to the windfall he reaped after
his ownership group sold the Rangers and their taxpayer-funded stadium. He was
Texas governor at the time. His 1.8 per cent share of the sale price would have
been $2.3 million, but the other owners, realizing he was poised for a run at
the presidency, gave him $14.9 million.
"So a group of businessmen, presumably with some interest in government decisions,
gave a sitting governor a $12 million gift. Shouldn't that have raised a few eyebrows?"
New York Times columnist Paul Krugman asked yesterday.
Bush's problems may not even be the worst facing the administration, with several
experts pointing to Cheney's role as CEO at Halliburton as being potentially much
more serious.
In August, 2000, six months before assuming office, Cheney made $18.5 million
(U.S.) profit on his sale of Halliburton shares. Sixty days later investors were
shocked to learn from the company that its construction division profits were
down substantially. Company shares fell 11 per cent on the announcement, which
was soon followed by another revealing that Halliburton was under a grand jury
indictment for overbilling the government.
The SEC is investigating, among other things, Cheney's decision to report construction
payments owed his company as profits, even before they were received, instead
of losses as had been previously reported by the company's accountants.
That bookkeeping wizardry kept Halliburton's stock price inflated until after
Cheney sold his shares.
The vice-president has refused to comment publicly on the matter.
Copyright 1996-2002. Toronto Star Newspapers Limited
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