The Bird's Eye View - Vice President Cheney

Vice President Cheney

This page was last updated on April 23, 2004.

Introduction

I prefer concentrating on the positives of a candidate, but that’s tough to do for a vice president. After all, he runs on the policies of the presidential candidate. Once in office, the VP’s duties are largely unnoticed. That’s why this page concentrates on putting the Democrat and media attacks on VP Cheney in context. That said, as a former Secretary of Defense (for President Bush #41), Dick Cheney seems well suited to be VP at this time in history.

Just about all criticism of Vice President Dick Cheney centers on his links to Halliburton Company. An objective person has a right to ask questions about VP Cheney’s current relationship with Halliburton. After all, Dick Cheney was CEO of Halliburton (1995 – 2000) and Halliburton is a large government contractor. Below are the major issues raised by Democrats and their friends in the mainstream media.

In fact, the “criticism” of VP Cheney is really innuendo. No one has accused Cheney of any wrongdoing.

VP Cheney continues to receive compensation from Halliburton

These are deferred salary payments from when he led Halliburton during 1995-2000. He’s being paid for work he performed before he left the company. Further, as soon as Cheney became VP nominee in 2000, he took out an insurance policy to guarantee the deferred salary would be paid to him whether or not Halliburton survived as a company. As a result, I see no conflict of interest.

VP Cheney has 433,333 unexercised stock options

Cheney placed the Halliburton stock options in a charitable trust and relinquished control over them when he became VP nominee. Should the options ever be exercised, the after-tax profits will go to charities and he will not take the tax deduction. Therefore, Cheney will receive no financial benefit from these options. As a result, I see no conflict of interest.

For what it’s worth, the exercise prices for these options are $54.50/share for 100,000 shares, $28.1250/share for 33,333, and $39.05 for 300,000. As of March 22, 2004, Halliburton’s stock price is $29.09/share. Thus, the stock price would have to increase quite a bit before exercising most of the options would make sense. I’m no stock expert, but I doubt that’s likely any time soon.

Halliburton has no-bid contracts in Iraq

VP Cheney has no direct input into the letting of Pentagon contracts. As mentioned above, no one has accused Cheney of any wrongdoing. Even the liberal Washington Post ran an op-ed piece stating, “One would be hard-pressed to discover anyone with a working knowledge of how federal contracts are awarded -- whether a career civil servant working on procurement or an independent academic expert -- who doesn’t regard these allegations as being somewhere between highly improbable and utterly absurd.”¹

Democrats would like you to believe all Halliburton contracts are “no-bid” contracts. This is not true. Much of the Iraq work is being done under the Logistics Civil Augmentation Program (LOGCAP). Kellogg Brown & Root (KBR is a Halliburton subsidiary) successfully won the LOGCAP bid in 2001, long before the Iraq war. This is standard operating procedure for this type of effort and was the same procedure used when the Clinton administration tapped KBR to perform similar functions in the Balkans. Some additional Iraq work -– the value changes with every story –- was awarded to KBR and other companies on a no-bid basis, but everything I’ve read indicates this too is standard operating procedure when there is very short lead-time and information leaks may be an issue.

The company (URS) partially owned by Sen. Feinstein’s (D-CA) husband, Richard Blum, also was reported to receive $600 million of “no-bid” work. Ms. Feinstein serves on the Senate Appropriations Committee where she is ranking member of the Subcommittee on Military Construction. For whatever reason, Democrats and the press don’t seem to have a big problem with the URS no-bid contract.

Pennsylvania has its own example of a Democrat double standard in this area.² Firms with ties to Gov. Rendell won a bid to help draft a recovery plan for Pittsburgh. The Pittsburgh Tribune-Review published an article to this effect, leading off with “Two Pennsylvania firms with political, financial and personal ties to Gov. Ed Rendell have been picked to craft a financial-recovery plan for Pittsburgh.”³ The article went on to say the companies had experience in this area. A state representative felt compelled to respond, though no allegation of wrongdoing was in the part of the article quoted in the representative’s letter.⁴ I found the letter especially humorous because in an e-mail note to me the same representative railed against VP Cheney and Halliburton though my original note to him wasn’t remotely connected to this subject.

While I prefer a bidding process, I recognize there are times when it’s not efficient. Given the situation, I can live with the no-bid awards as long there was no wrongdoing and taxpayers were not gouged.

Overcharging allegations against Halliburton

There have been a few overcharging allegations to date. The Army cleared Halliburton of the first allegation, in which Halliburton wouldn’t have profited even if the allegation had been true.⁵ The second allegation was uncovered and reported by Halliburton itself. I believe there are a couple of other allegations under investigation.

It’s important to know that either Halliburton or the Pentagon has uncovered all of the allegations. They don’t appear to be trying to hide anything. If there is this mass conspiracy to funnel business to Halliburton, why aren’t Democrats and the mainstream media able to find anything beyond that reported by Halliburton and the Pentagon?

1. No ‘cronyism’ in Iraq; Steven Kelman; The Washington Post; November 6, 2003.

2. I’m not picking on Democrats; I’m sure some Republicans would behave just as childishly given the chance.

3. Team chosen to tackle city's comeback strategy; Pittsburgh Tribune-Review; January 29, 2004.

4. Not fair & not balanced; State Rep. Frank LaGrotta (D-10); Pittsburgh Tribune-Review; February 12, 2004.

5. Army Corps Clears Halliburton In Flap Over Fuel Pricing in Iraq; Neil King, Jr.; The Wall Street Journal; January 6, 2004.