President Bush is being criticized again, today, much of it is 1)partisan for his business past. He is accused of 2)indulging as a businessman in the same corporate excesses that he is now 3)condemning.
As the President headed off on a Midwest trip, his aides were left behind to deal with more questions about Mr. Bush’s own business practices years ago. In his Wall Street speech on Tuesday, Mr. Bush criticized 4)sweetheart loans given to company insiders.
Bush: I challenge compensation committees, to put an end to all company loans to corporate officers.
But in 1986, while a board member of Harken Energy Corporation, Bush himself received a low interest loan from the company, lower than the market rate, for $96,000, so he could buy Harken Company stocks. Two years later, another loan of $84,000 to buy more shares, for a total of $180,000 in company loans. Mr. Bush ultimately repaid them. Democratic leaders accuse him of 5)hypocrisy. Tom Daschle(Majority leader): He did criticize the effort in his speech, and yet it appears that is what he did himself.
Richard Gephard(Minority leader): It is hard to lead when you haven’t done the things that you’re asking others to do.
The President’s aides say there was nothing wrong in accepting the loans because it was common practice in the 80s. And there was no hypocrisy, says the Presidents spokesman, because Mr. Bush did not abuse the system as executives have done in recent years.
Ari Flescher(WH Press Secretary): People taking out loans and not doing what President Bush did, and not putting them back into the company and using them for other purposes, which are abusive.
The President’s aides are particularly frustrated that his own words have 6)diverted attention to what he is trying to do: 7)boost investor confidence. That is the real concern here, a weak stock market, and the effect it could have on economic recovery.
Now to this issue of Vice President Cheney. A legal activist group called “8)Judicial Watch” filed the lawsuit today against the Vice President, and Halliburton, the Energy Company he used to run. The lawsuit accuses Halliburton, and its former CEO, of the same 9)fraudulent accounting associated with the WorldCom and Enron companies. So, what is the bottom line?
Mr. Cheney was CEO of Halliburton from 1995 until he 10)joined the ticket in 2000. In his last full year on the job he earned $26.4 million.
The suit by Judicial Watch on behalf of Halliburton shareholders claims Mr. Cheney and other Halliburton executives 11)artificially boosted profits by $455 million, between 1998 and 2001.
Larry Klayman(Chairman of Judicial Watch): Cheney said no, it’s just the accountants that did that. He doesn’t want to take responsibility; he was head of the company.
Halliburton says its accounting practices were approved by its auditor, Arthur Anderson. In 1997 Mr. Cheney taped a testimonial for an Anderson marketing video.
Cheney(in video): I get good advice, if you will, from their people based upon how we’re doing business and how we’re operating, 12)over and above just the sort of the normal by-the-books auditing arrangement.
The Securities and Exchange Commission is investigating whether Halliburton inflated its profits since 1998.
Prof. Lawrence Mitchell(George Washington University, Law School): It’s consistent with the kinds of earnings management that have gotten companies like Enron and WorldCom and Global Crossing into trouble.
Halliburton Executives say they cannot imagine Mr. Cheney signed off on the way the company kept its books. Corporate law experts say the CEO is ultimately responsible for the way the company is run.
Prof. Lawrence Mitchell: It is not proper that the CEO not know, and giving the kind of reputation that Cheney had as a businessman. No, I don’t think it’s credible that he didn’t know.
Aides to the Vice President said today that the Judicial Watch suit has no merit.
