Published on
The Age (Australia)

Cheney's Day Is Done

Michael West

Vice President Dick Cheney arrives at George Washington University Hospital on Wednesday, Oct. 15, 2008, in Washington.Cheney's fortunes really ballooned in the heat of the Iraq conflict in 2004 when his 433,333 Halliburton options soared in value from $US241,498 to more than $US8 million in 2005. (AP Photo/Evan Vucci)

The most spectacular, and indeed sinister, conflict of interest in the world of politics and business must surely be the relationship between US Vice President Dick Cheney and Halliburton Company.

Cheney had been chairman and CEO of the oil services and construction giant Halliburton from 1995 to August 2000 when he signed up with George W Bush's election campaign. Halliburton stands to benefit every time an oil pipeline is blown up in Iraq or a meal is handed out to the troops, and Cheney still has stock options in the company.

To give the Vice President the benefit of the doubt - an exercise which counters every journalistic instinct apart from the need to report both sides of the story - his supporters say he donates the proceeds to charity.

Cheney's official position has always been: ``Since I left Halliburton to become George Bush's vice president, I've severed all my ties with the company, gotten rid of all my financial interest".

Here are the available Halliburton stock option numbers sourced from the Vice President's Federal Financial Disclosure forms:

100,000 shares at $US54.5000 (vested), expire December 3, 2007
33,333 shares at $US28.1250 (vested), expire December 2, 2008
300,000 shares at $US39.5000 (vested), expire December 2, 2009.

In 2001, he was paid deferred salary by Halliburton of $US205,298. In 2002, deferred salary was $US162,392, in 2003 $US178,437 and in 2004 $US194,852.

End is nigh

Thankfully, the US election will bring this breathtaking conflict of interest to an end - it is a issue which has been chronically under-reported in the US media - and Halliburton's stock price is faring poorly. It dropped another 7.3% to $US18.36 overnight, well down on this year's July highs of $US55 a share.

The stock was trading around $US20 a share before Operation Enduring Freedom was unleashed in March 2003 and it subsequently shot up.

Halliburton has racked up some $US20 billion in revenue from the war. Meanwhile, 4,190 US troops have been killed, an estimated 100,000 have been injured and the Iraqi body count is documented at 97,000, although the real figure is would likely to be higher as there are no accurate records.

According to Congressional research data, the cost of the ``Liberation of Iraq'' to US taxpayers is now over $US596 billion. The cost now runs at $US12 billion a month ($US16 billion if Afghanistan is included) compared with original Pentagon estimates of $US50 billion all up .

In 2007 alone, the war and its concomitant ``nation building'' cost US taxpayers $US121,000 per Iraqi citizen.


If Barrack Obama gets up in the presidential election Halliburton is likely to come under pressure. The company and the administration have managed to kill a plethora of Federal probes.

Some relate to the well-documented success of Halliburton in winning contracts in Iraq which were not even put to public tender.

Others related to the myriad of corruption allegations. The war in Iraq has largely been outsourced, privatised if you like, and Halliburton and its subsidiary Kellogg Brown Root, have been the greatest beneficiaries in dollar terms.

Should the Republican candidate John McCain defy the polls and beat Obama to the White House, Halliburton can breathe easy, or more easily, at least.

Despite his positioning as a "maverick'' and some credibility as an independent legislator, McCain would come under all sorts of sway from the Republican Party base and its donors to suppress potential recriminations arising from the conflict.

Further, Halliburton would presumably continue to rake in billions of dollars from the prosecution of the War as McCain has vowed to ``win'', whatever that means and there is no timetable for withdrawal. He was even pilloried by Democrats for suggesting that the US could stay in Iraq for 100 years.

No surrender

Given Iraq's enormous oil reserves and looming energy security issues for the US, this is no laughing matter. Yet oil is another story.

"It's a tough war we're in. It's not going to be over right away. There's going to be other wars,'' he told supporters in a stump speech recently. ``We will never surrender but there will be other wars."

Obama is espousing a troop withdrawal as soon as practicably possible, perhaps in 2010 - an outcome which would leave a gaping hole in Halliburton's revenues.

The company even picked up reconstruction contracts under the Bush regime from the devastation of Hurricane Katrina - apparently ``no-bid'' contracts again.

Cheney's fortunes - or according to his aides, the fortunes of the charities to which he had pledged the income from his stock options - really ballooned in the heat of the Iraq conflict in 2004 when his 433,333 Halliburton options soared in value from $US241,498 to more than $US8 million in 2005.

Conservative finances

What is fascinating, though, in the light of the present market turmoil and the espousing of ``ownership'' and free market principles by the Bush administration, is just how conservative are the personal investments of Bush and his VP.

Going back to his 2006 financial disclosures, Bush had between 2% to 4% of his money in stock and balanced funds.

The rest of was tied up in, as one pundit put it ``money-under-the-mattress investments'': bank checking accounts, certificates of deposit, money-market mutual funds and Treasury bills and notes.

Bush disclosed between $US4.6 million and $US9.7 million in these low-risk investments compared with just $US205,000 in stock and balanced funds.

Cheney's investment strategy is more gung-ho. He had 28% in stocks, stock options and stock funds in 2006 with the balance spread among bond funds. Some $US1.6 million to $US6.3 million was locked up in the ultra-safe kind of investments favoured by his Commander-in-Chief.

While Bush and Cheney appear to have adopted extremely defensive personal finance strategies, their administration's stewardship of the national wealth, particularly in relation to Halliburton, reek of the sort of crony capitalism which would have embarrassed a South American junta.

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