This may be the big article on this topic ---
(When Republicans said they would run government like a business, who knew they meant Enron and Halliburton?!?!?!)
Halliburton's quagmire becomes Cheney's liability
Purchase of rival mired company in asbestos woes
JAMES V. GRIMALDI <> THE WASHINGTON POST
The Olympian, Olympia Washington Sunday, August 11, 2002
http://www.theolympian.com/home/services/promotions/popups/circPromo.htmlWASHINGTON -- Vice President Dick Cheney, who boasted on the campaign trail of his success as chief executive officer at the Halliburton Co., has watched the biggest business deal of his corporate career turn into a quagmire that could haunt the Dallas oil field services company for years.
When Cheney negotiated the $7.7 billion acquisition of longtime rival Dresser Industries Inc. during a south Texas quail hunt in 1998, he saddled Halliburton with a mammoth liability over injuries to workers using asbestos products Dresser had manufactured. Halliburton officials now say that they thought they were legally protected against the claims and were ultimately insured for their costs, but the company's protections seem to be failing. Documents related to Dresser show that Cheney and Halliburton management either underestimated, disregarded or ignored the looming legal risk in acquiring the company. Some of those risks were clearly spelled out in internal Dresser records, available in court files, that would normally be scrutinized before such a deal was sealed. When it was announced, Cheney called the merger a "win-win" for shareholders and "one of the most exciting things I've ever done." But the deal astounded trial lawyers then involved in lawsuits against Dresser and a related company.
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As Cheney last week made clear his willingness to serve a second term on the Bush ticket, Halliburton remains under scrutiny by the Securities and Exchange Commission for aggressive accounting methods used during Cheney's tenure. The company counted uncollected debt as revenue, an accounting method that it contends was widely accepted in the industry. Halliburton has said it did nothing wrong.
Halliburton now estimates its overall asbestos exposure at $2.2 billion, about $1.6 billion of that covered by insurance. Trial lawyers question the estimate, and insurance disputes raise doubts about coverage. Halliburton's stock has taken more than a $4.5 billion hit from asbestos woes, according to industry analysts.
Cheney and his management team compounded Halliburton's liability by deeply integrating Dresser into Halliburton, rather than creating a subsidiary. As a result, asbestos costs and liabilities are part of Halliburton's bottom line.
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Bush link from 1920s
Dresser had close ties to a family Cheney knew well: the Bushes. Cheney's boss while he served as Secretary of Defense, President George H.W. Bush, was once being groomed to run Dresser, a company that Bush's father and grandfather had reshaped decades earlier.
When Dresser went public in the 1920s, it turned to W.A. Harriman & Co., whose president was George Herbert Walker, grandfather and namesake to former president Bush. Prescott Bush, the former president's father, helped organize Dresser and select its new president, H. Neil Mallon. Prescott Bush eventually sat on the board and by 1941, still held 1,900 shares of Dresser stock.
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