View Full Version : Post to Cheney: Stop Doing the Right Thing!
07-18-2002, 09:06 AM
The Media Research Center made an interesting point regarding the Washington Post and its coverage of Dick Cheney's sale of Halliburton Co. stock.
In an editorial, the Post stated:
"The prospect of a Vice President's having a large financial interest in the outcome of national policy bearing on oil --domestic energy policy, environmental policy, foreign policy in the Mideast and elsewhere -- can appeal to no one, not Mr. Cheney, not Mr. Bush, not the public either....It's a complication no one needs." -- Washington Post editorial, August 18, 2000.
Then Dana Milbank, a reporter at the Post, runs an article stating:
"An executive sells shares in his energy company two months before the company announces unexpected bad news, and the stock price eventually tumbles to a quarter of the price at which the insider sold his...George W. Bush at Harken Energy Corp. in 1990? Yes, but also Richard B. Cheney at Halliburton Co. in 2000."
He goes on to attribute the sale only to "serendipity or shrewdness", and dismisses the concerns earlier stated by the Post editors and the Gore campaign about Cheney owning oil stock by saying
"Though Cheney was under pressure to sever his future financial interest in Halliburton, conflict of interest laws did not require the sale."
In other words, Cheney should be eyed suspiciously for doing something the Post itself recommended as the ethical thing to do.
The whole article is posted at
the Media Research Center website. (http://www.mediaresearch.org/realitycheck/2002/fax20020717.asp)
So which is it? Were they recommending that Cheney do something unethical, or are they being hypocritical for attacking the VP for doing the right thing?
07-18-2002, 09:39 AM
Neither, actually. As I see it, the target is more the Bush Administration's "running government like a business" tack.
Either the likes of Cheney and White brought genuine business expertise to the Bush Administration (in which case Cheney should have known how bad Halliburton was doing when he sold his shares, which the Washington Post couldn't have been expected to know, btw), or they didn't, in which case the Bushies are more about crony capitalism than actual business skills and acumen.
I'm going with the latter explanation, myself, but it's probably not a bad idea to check whether anything's behind Door #1 just to clarify the discussion.
After reading the linked article, I'm confused. It states that he sold his stock in August 2000 but was questioned about when he'd sell on Meet the Press on August 27th, 2000? Did he sell in the four days after that show or is this a discrepancy by the WaPo or MRC?
I would also point out that Media Reality Check is a heavily partisan site- their assertion that "Milbank included no other information about Harken, such as the fact that the SEC cleared Bush of any wrongdoing" is incorrect. The SEC did not clear Bush of any wrongdoing and, in fact, they found that he violated securities law four times (http://www.public-i.org/story_01_100400.htm).
07-18-2002, 10:52 AM
I think he sold, or was in the process of selling, after the show, or that he had already sold it when he went on Meet the Press, but the reporters questioning him either didn't know that, or didn't want to know. They were questioning him (according to the article) on "when" he would sell his stock options, not if it was ethically or legally necessary for him to do so.
And of course you are correct that the MRC is partisan conservative. It would have been more accurate to state that the SEC "found no wrongdoing by Bush worthy of any sanction, nor any evidence that he was guilty of insider trading, or anything except failure to file some paperwork on time".
Nonetheless, I think the thrust of the article is accurate. Cheney would be damned if he did and damned if he didn't. He sells the stock, he must have done it as a rip-off of the other investors. He doesn't sell the stock, he must be doing whatever he does as vice-president to make money.
07-18-2002, 11:53 AM
The expectation of August 2000 that Cheney should sell his stock before becoming veep, made perfect sense.
Excepting company insiders, no one could have been expected to know what bad shape Halliburton was in.
The problem here was that Halliburton was just one more company that hid its true situation from outsiders somewhat overlong.
It's unreasonable to excoriate the Post for a change in position based in part of information it wasn't privy to in August 2000.
07-18-2002, 11:46 PM
It's not just the position change. It's that they are basically trying to claim that Cheney had no good reason to sell his stock at that time, hence the reason must have been insider knowledge. But in fact they knew that he had a reason, because they provided one - Cheney was under some serious pressure to drop his stock holdings. I remember it well. Haliburten came up regularly on the various newsmagazine shows and pundit shows.
Knowing that they themselves pressured Cheney into selling, it's disingenuous of them to suggest that he had no good reason.
07-19-2002, 06:01 AM
Originally posted by Sam Stone
Knowing that they themselves pressured Cheney into selling, it's disingenuous of them to suggest that he had no good reason. The original article (http://www.washingtonpost.com/wp-dyn/articles/A10129-2002Jul15.html) says: Though Cheney was under pressure to sever his future financial interest in Halliburton...The people who left that out, btw, were the people at the Media Research Center.
Guess they didn't reprint the whole article after all. Nor did I see a direct link from their page to the Post article. It would be a shame if people could read the entire original while comparing it with the MRC commentary.
Maybe the MRC could use a little Media Reality CheckTM.
07-19-2002, 06:06 AM
Oops, I blew it. The MRC did include that particular quote. Sam and I both missed it in their C&P version.
But my points stand: (1) the Post story did in fact mention the pressure that Cheney was under in August 2000 to divest himself of his Halliburton holdings, and (2) if the MRC can't reprint the whole thing (which they probably can't, what with copyright laws), they need to link to the original so that people can see whether or not they're fairly representing the stories they're criticizing.
07-19-2002, 06:43 AM
So what should Cheney have done? Seriously. He did the right thing by selling the Hall. stock due to the complaints that were being lodged against him. Are you all saying that now he shouldn't have sold? It's a damned if you do or damned if you don't.
07-19-2002, 07:19 AM
Yep--damned if you do sell the stock of the company whose true financial condition you've been concealing from investors, and damned if you don't sell the stock of the company whose true financial condition you've been concealing from investors. Oh, if only there were some way to have avoided that terrible decision in the first place!
07-19-2002, 07:42 AM
Hi, minty green -
Cite, please, that Cheney concealed the true financial condition of Halliburton from investors. Or is this another of those accusations that we are supposed to assume is valid, because Martha Stewart has been accused, and all Those People are the same.
07-19-2002, 09:33 AM
When Cheney left, outward signs were good for Halliburton. On July 27, Deutsche Banc Alex. Brown analysts wrote that "quarterly earnings have impressively turned the corner, in our opinion." Even as late as Oct. 16, Jefferies & Co. analysts wrote that "Halliburton's earnings should show greater growth momentum in 2001 as the Engineering & Construction business turns decidedly more positive."
But on Oct. 24, Halliburton delivered a different message in a conference call with analysts: Despite its strong current earnings, Halliburton was encountering weak orders and high costs in its engineering and construction businesses -- about a third of the company. To rectify matters, it announced plans to combine the unit's two businesses, essentially reversing Cheney's strategy, which was to make each stand alone.
The change would lead to asset sales, layoffs and a $120 million after-tax charge against earnings. Cheney's successor, David Lesar, told analysts he was "not at all satisfied with this situation," and analysts sharply reduced their earnings forecasts. Halliburton's Hall said plans for the overhaul were made after Cheney left.
The news, coming a day after Halliburton acknowledged it was the target of a federal grand jury investigation related to overbilling of the government at Fort Ord in California, was a surprise.
By Nov. 13, Jefferies wrote that "Halliburton's stock has lost between $3 billion and $4 billion of total market value." The researchers attributed half of that to the bad news about the engineering business, and half to worries about Halliburton's asbestos troubles "since Owens-Corning filed for bankruptcy protection" in October. I don't think anything's been proven, but as I understand it, engineering and construction, given the sort of big projects Halliburton did, just can't be that volatile on a month-to-month basis. If you're involved in a lot of multiyear contracts, the orders you get or don't get in a single three-month period can hurt you only so much. It certainly raises serious questions about where Halliburton was back in July (when Cheney was still running things), and whether that matched up with what it was sharing with the investing public.
Do I think it's legitimate for a newspaper to do a story in a case like this before there's been a resolution to whatever investigations may take place? Hell, yes - with government investigative staff having been cut the way it has in recent years (including serious SEC staff cuts between last year and this, courtesy of our President), newspapers can sniff out things that the government investigators might otherwise not get to in the first place.
Did the Post say anything false? No.
Did they mention the media pressure in 2000 for Cheney to divest himself of his Halliburton holdings? Yes.
What was the tone of the story? I'd call it, "there's a lot of smoke, but we don't know if there's a fire." Which is exactly where we are, and so I'd regard the story as truthful in tone.
What does the Post seem to be saying Cheney should have done in August 2000? It depends on what he knew that the public didn't.
But it's also loudly wondering what sort of businessman Cheney was, given the things he apparently didn't know. But I've already spoken to that. (This was perhaps the major thrust of the story, and one that the MRC piece completely disregarded.
The real 'damned if you do, damned if you don't' story in the story is the implication that if Cheney didn't know how badly his business was doing in August, he must've not known his own business very well. To overlook this aspect of the story, and pretend that it was solely about trying to make it look like Cheney dumped his stock on the basis of insider knowledge, is a complete misrepresentation of the story, IMHO.
And that's exactly what MRC did.
On further review, it seems to me that it's Cheney supporters who wants to have it both ways. IIRC on the August 2000 Meet the Press, Cheney stated that there was no conflict of interest and he had no reason to divest. Therefore he was selling the stock for his own reasons and not because of the claims that there may be a conflict.
If he had stated that he could see where there may be a conflict and that he would sell off his stock, the claims that the "WaPo wants it both ways" would have some merit. However, Cheney basically said "I'll sell when I feel like it" and got rid of the stock two months prior to Haliburton's financial restating- which he should have been aware of.
07-20-2002, 07:23 AM
Actually, the Post spin seems to be to put the worst possible construction on whatever Cheney does.
He can only be considered to have sold because he was incompetent, or because he was corrupt. They disregard any chance that he was an astute businessman, buying low and selling high, or that he was acting ethically in divesting himself of financial positions which the Post itself admit are neither illegal nor unethical.
As I said, damned if he does, and damned if he doesn't.
07-20-2002, 08:08 AM
A couple of additions:
1) The story's headline, from Tuesday's print edition:
Main head: "For Cheney, Tarnish From Halliburton"
Subhead: "Firm's Fall Raises Questions About Vice President's Leadership There"
Bolding mine, but the point is that if that's the head, Cheney's executive abilities, or lack thereof, were what the Post was clearly saying the story was about.
2) The play the story got, relative to other business-scandal news: modest.
Tuesday's story was on A1, but below the fold, in a small-to-middling box - the same play as "Poll Shows Bush's Ratings Weathering Business Scandals" got on Wednesday, and less than what "Fed Chief Says Economy Is on Recovery Path" got, also on Wednesday.
The Post's big business story this week, at the top of A1 both Thursday and Friday, was about how AOL (http://www.washingtonpost.com/wp-dyn/articles/A21983-2002Jul17.html) cooked (http://www.washingtonpost.com/wp-dyn/articles/A22449-2002Jul17.html) their (http://www.washingtonpost.com/wp-dyn/articles/A28624-2002Jul18.html) numbers (http://www.washingtonpost.com/wp-dyn/articles/A28567-2002Jul18.html) in the months leading up to the Time Warner merger, to make it look like they were continuing to be the powerhouse they claimed to be, while in fact the ground was eroding from under their feet. (AOL was buying Time Warner primarily with AOL stock; AOL management was worried that Time Warner would back out of the deal if it looked like that wasn't such terrific currency.)
There was another Halliburton story on Thursday, but it was buried on A18. There was a "fallout from" story about Halliburton on A1 below the fold this morning. But on the whole, the Post's Cheney/Halliburton coverage has been subdued compared to other stories that were in the news anyway, or that they made a special effort to cover.
These days, the so-called liberal media has no monopoly on news coverage. On TV, Fox (I'm told; I don't watch much TV) takes a conservative line, and you can always go to CBN's allged news coverage for a far more conservative point of view. On the radio, Rush, Ollie, and G. Gordon Liddy can bring underplayed stories to their legions of followers. And the number of WorldNetDaily-type conservative 'news' sites on the Internet is pretty astounding.
No one is forced to get their news from the 'liberal media' any more. But people do, regardless of their political viewpoints - because the Post, the New York Times, and so forth, have the credibility that comes from reporting the news, checking their facts, and doing the job right. People jump on them for the occasional evidence of bias, despite the reality that newspapers have the right to be biased, and as we've found here, the truly biased party was the Post's accuser.
Meanwhile, nobody even expects Rush Limbaugh (does he still claim to be a one-man truth squad?) or the Christian Broadcasting Network to be unbiased. It would be nice if they gave it a halfhearted effort, though - and the Post does much more than that.
07-20-2002, 08:20 AM
Originally posted by Shodan
They disregard any chance that he was an astute businessman, buying low and selling high,That would be evidence of being an astute investor, not a businessman. (BTW, did Cheney actually buy his Halliburton stock?) An investor doesn't have to run anything. Why would you bring in astute investors to run the country?
The claim was that Bush's team had business management skills that the country would benefit from. The Washington Post's story brings up a fair amount of evidence that Cheney didn't really bring much to the table in that department.
or that he was acting ethically in divesting himself of financial positions which the Post itself admit are neither illegal nor unethical. Maybe we're reading different stories. The one I'm reading, Tuesday's Washington Post story (http://www.washingtonpost.com/wp-dyn/articles/A10129-2002Jul15.html), leaves that door wide open: "There has been no serious allegation of wrongdoing by the vice president himself in all of this."
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