Raw Story, October 2005
Title: “Cheney’s Halliburton Stock Options Rose 3,281 Percent Last Year, Senator Finds”
Author: John Byrne
Senator Frank Lautenberg’s website
Title: “Cheney’s Halliburton Stock Options Soar to $9.2 Million”
Faculty Evaluator: Phil Beard
Student Researchers: Matthew Beavers and Willie Martin
Vice President Dick Cheney’s stock options in Halliburton rose from $241,498 in 2004 to over $8 million in 2005, an increase of more than 3,000 percent, as Halliburton continues to rake in billions of dollars from no-bid/no-audit government contracts.
An analysis released by Senator Frank Lautenberg (D-NJ) reveals that as Halliburton’s fortunes rise, so do the Vice President’s. Halliburton has already taken more than $10 billion from the Bush-Cheney administration for work in Iraq. They were also awarded many of the unaccountable post-Katrina government contracts, as off-shore subsidiaries of Halliburton quietly worked around U.S. sanctions to conduct very questionable business with Iran (See Story #2). “It is unseemly,” notes Lautenberg, “for the Vice President to continue to benefit from this company at the same time his administration funnels billions of dollars to it.”
According to the Vice President’s Federal Financial Disclosure forms, he holds the following Halliburton stock options:
100,000 shares at $54.5000 (vested), expire December 3, 2007
33,333 shares at $28.1250 (vested), expire December 2, 2008
300,000 shares at $39.5000 (vested), expire December 2, 2009
The Vice President has attempted to fend off criticism by signing an agreement to donate the after-tax profits from these stock options to charities of his choice, and his lawyer has said he will not take any tax deduction for the donations. However, the Congressional Research Service (CRS) concluded in September 2003 that holding stock options while in elective office does constitute a “financial interest” regardless of whether the holder of the options will donate proceeds to charities. Valued at over $9 million, the Vice President could exercise his stock options for a substantial windfall, not only benefiting his designated charities, but also providing Halliburton with a tax deduction.
CRS also found that receiving deferred compensation is a financial interest. The Vice President continues to receive deferred salary from Halliburton. While in office, he has received the following salary payments from Halliburton:
Deferred salary paid by Halliburton to Vice President Cheney in 2001: $205,298
Deferred salary paid by Halliburton to Vice President Cheney in 2002: $162,392
Deferred salary paid by Halliburton to Vice President Cheney in 2003: $178,437
Deferred salary paid by Halliburton to Vice President Cheney in 2004: $194,852
(The CRS report can be downloaded at: http://lautenberg.senate.gov/Report.pdf)
These CRS findings contradict Vice President Cheney’s puzzling view that he does not have a financial interest in Halliburton. On the September 14, 2003 edition of Meet the Press in response to questions regarding his relationship with Halliburton, where from 1995 to 2000 he was employed as CEO, Vice President Cheney said, “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. I have no financial interest in Halliburton of any kind and haven’t had, now, for over three years.”
Comment: A similar undercovered story of conflicting interest and disaster profiteering by those in the top echelon of the U.S. Government is of Defense Secretary Donald Rumsfeld’s connections to Gilead Sciences, the biotech company that owns the rights to Tamiflu—the influenza remedy that is now the most-sought after drug in the world. This story was brought forward by Fortune senior writer, Nelson D. Schwartz, on October 31, 2005 in an article titled “Rumsfeld’s growing stake in Tamiflu,” and by F. William Engdahl for GlobalResearch, on October 30, 2005, in an article titled “Is avian flu another Pentagon hoax?”
Rumsfeld served as Gilead’s chairman from 1997 until he joined the Bush administration in 2001, and he still holds a Gilead stake valued at between $5 million and $25 million, according to Federal Financial Disclosures filed by Rumsfeld.
The forms don’t reveal the exact number of shares Rumsfeld owns, but whipped up fears of an avian flu pandemic and the ensuing scramble for Tamiflu sent Gilead’s stock from $35 to $47 in 2005, making the Pentagon chief, already one of the wealthiest members of the Bush cabinet, at least $1 million richer.
What’s more, the federal government is emerging as one of the world’s biggest customers for Tamiflu. In July 2005, the Pentagon ordered $58 million worth of the treatment for U.S. troops around the world, and Congress is considering a multibillion dollar purchase. Roche expects 2005 sales for Tamiflu to total at about $1 billion, compared with $258 million in 2004.
UPDATE BY JOHN BYRNE
The media has routinely downplayed Cheney’s involvement and financial investment in Halliburton, one of the largest U.S. defense contractors that received supersized no-bid contracts in Iraq. Ultimately, the importance of the story is that the Vice President of the U.S. is able to use his position of power to reap rewards for his former company in which he has a financial investment. Halliburton may also benefit from a chilling effect in which the Pentagon is more likely to favor Cheney’s firm to seek favor with the White House.
Cheney continues to hold 433,333 Halliburton stock options, and receives a deferred salary of about $200,000 a year. According to Cheney’s most recent tax returns, he held $2.5 million in retirement accounts, much of which likely came from his former defense firm.
Cheney recently filed disclosure reports that show he is valued at $94 million.
Senator Lautenberg’s disclosure, brought forward by Raw Story, received no mainstream coverage. While the press has often noted that Cheney was formerly Halliburton’s CEO, they routinely fail to mention how much money he accrued from the firm during his service there. They also fail to mention that he continues to receive a pension.
RawStory.com regularly reports on Halliburton and contracts awarded to the company. SourceWatch.org also has a good library of resources on Halliburton and other defense contractors as well as the Vice President.Another way to get involved is to contact your local senator or representatives about your concerns, and to ask them to push the Vice President to sell his stock options in Halliburton.