http://rawstory.com/news/2005/Cheneys_stock_options_rose_3281_last_1011.html

An analysis released by a Democratic senator found that Vice President Dick Cheney's Halliburton stock options have risen 3,281 percent in the last year, RAW STORY can reveal.

Sen. Frank Lautenberg (D-NJ) asserts that Cheney's options -- worth $241,498 a year ago -- are now valued at more than $8 million. The former CEO of the oil and gas services juggernaut, Cheney has pledged to give proceeds to charity.

The above graph released by Sen. Frank Lautenberg (D-NJ) charts the value of the Vice President's holdings in Halliburton in the past year.


“Halliburton has already raked in more than $10 billion from the Bush-Cheney Administration for work in Iraq, and they were awarded some of the first Katrina contracts," Lautenberg said in a statement. "It is unseemly for the Vice President to continue to benefit from this company at the same time his Administration funnels billions of dollars to it. The Vice President should sever his financial ties to Halliburton once and for all.”

Cheney continues to hold 433,333 Halliburton stock options. The company has been criticized by auditors for its handling of a no-bid contact in Iraq. Auditors found the firm marked up meal prices for troops and inflated gas prices in a deal with a Kuwaiti supplier. The company built the American prison at Guantanamo Bay.

Cheney isn't getting rich of the war, yet people still insist on this nonsense.

http://www.factcheck.org/article261.html

The benefactors are: University of Wyoming (Cheney's home state), George Washington University's medical faculty and Capital Partners for Education .

No, but when his options in Halliburton are sold he's going to have an enormous tax write off that gets bigger as the option values increase. Providing its true that all his halliburton options are going to go to charity.

Factcheck.org is right-wing led you know

Mmhmm, and rawstory.com is totally non-biased, right?

Factcheck.org is right-wing led you know

They seem to do a pretty good job of debunking crap from both sides. And at the very least, they back up what they say with facts. The original article even mentions that its going to charity. See below, the actual agreement signed by Cheney.

http://www.factcheck.org/UploadedFiles/Cheney%20Gift%20Trust%20Agreement.pdf

Also, I admittedly don't know much about the The Annenberg Public Policy Center of the University of Pennsylvania, but, I certainly don't see anything biased about their site or information.

no website is non-biased =p

True, but I certainly think some are less than others.

After a bit more research, I find absolutely nothing that supports your statement of FactCheck.org being a right wing site.

The Annenberg foundation supports organizations of all political views.
http://www.annenbergfoundation.org/usr_doc/GrantsOverview.pdf

Where did you get your information that it was a right wing site?

The Point is... anyone can make a website. call it what they want.... say what they want... and claim to be non-biased, and its all a lie.

Watch CNN or Fox News sometime. Half the stuff on there isnt 100% true

True, but Factcheck's credetials are pretty good. Plus, they reference their work with, well, facts. Stuff that can be verified. And given that they included a copy of the actual agreement for the stock options, There is no reason to claim bias in this particular situation.

You claimed that Cheney was getting rich on the war, using a biased source.

I countered with FactCheck's evidence that it's not true.

You claimed FactCheck was right wing.

I pointed out that I see no evidence of that, and provided the link to the Stock Option agreement that proves my original statement as fact.

You respond by saying no website is non-biased.

The fact is. You made a statement that was blatently false based on a bias source. When pointed out, you claim that my source is bias, when there seems to be no meaningful or intentional bias with the site or with the organization funding/running the site.

I'll ask again, where did you find evidence that Factcheck.org is a right wing site?

No, but when his options in Halliburton are sold he's going to have an enormous tax write off that gets bigger as the option values increase. Providing its true that all his halliburton options are going to go to charity.

The enormous tax write-off will not enrich Cheney one cent. The way this is structured, he neither benefits from nor is harmed by exercise of the options.

The enormous tax write-off will not enrich Cheney one cent. The way this is structured, he neither benefits from nor is harmed by exercise of the options.

Which begs the question ... why is he keeping the options? Is the reason he is keeping them a conflict of interest in itself?

My assumption is that he's keeping them so he can have a job/money after the VP gig goes away. Becoming President doesn't mean you have to liquidate all your assets. Sheesh, it's not like you're becoming a monk.

My assumption is that he's keeping them so he can have a job/money after the VP gig goes away.

Well nestling up to a multinational so you can have extra work/money after your term in office is over is still a definite conflict of interest. It's not as if Cheney is going to be short of either money or lucrative opportunities when his term ends. Even when you consider that politicians need high rewards for high capability, Cheney will be very well set.

Seeing that he was a part of the company before he even became VP, I don't see him "nestling up" to the company at all. That's like saying you'd want Bill Gates to sell off all shares of Microsoft before he became Gov. of Washington state.

If you have proof positive that Halliburton is getting kickbacks or political favors directly from Cheney, I'm sure we'd all love to see it.

The enormous tax write-off will not enrich Cheney one cent. The way this is structured, he neither benefits from nor is harmed by exercise of the options.

Explain your reasoning. If his options increase in value, %3000 percent, and he donates them to a charity, he's just gotten an enormous shelter of other income he almost certainly has. If they only increase 6% its a much smaller shelter. So yeah, he stands to gain from his shares increasing.

If you have proof positive that Halliburton is getting kickbacks or political favors directly from Cheney, I'm sure we'd all love to see it.

There have been enough contracts given to Halliburton without open tendering to raise suspicions. If Cheney wants to remove the rumours then he can sell his stock options.

The question comes back to this ... if he's set up an elaborate scheme which is the equivalent of selling the shares now and buying them again after he leaves office, why didn't he just do that! Why is he walking into a political minefield to keep shares that have no special value to him?

Hate to remind you, but people are innocent <i>until proven guilty</i>, not the other way around.

Hate to remind you, but people are innocent until proven guilty, not the other way around.ONLY in a court of law, Stormhaven. That rule certainly does NOT apply to internet forum threads and rumor mills :)

Of course, because actually <i>proving</i> a theory requires too much work, and brings too much of that whole "reality" thing into play. It's much better to rely on conjecture and word of mouth.

If you're a smart politician you get rid of the rumours. Cheney seems a pretty smart guy, so why isn't he squashing this whole thing by selling his shares now and buying whatever he damn well wants with the money when he leaves office? Insuring yourself and pledging profits to charity is a really circular method of doing things, so just what is he trying to circumvent?

Put it this way, if I was a Republican party campaigner I'd want Cheney to dump those shares right now. He's not going to lose anything by dumping them now instead of 3 years time, given his claims of zero-profits, so I'd tell him to get on with it.

Explain your reasoning. If his options increase in value, %3000 percent, and he donates them to a charity, he's just gotten an enormous shelter of other income he almost certainly has. If they only increase 6% its a much smaller shelter. So yeah, he stands to gain from his shares increasing.


Except it doesn't work that way. There are two types of Stock options.

Insentive Stock Options which have a favorable tax benefit, but is not transferrable untile Death. So, we aren't talking this type.

And Nonstatutory STock Options which can be set up as Cheney has done. The way the the charity exercising the options interact with the donor's Gross adjusted income, any deduction benefit is at best a wash. So, in essense, there is no financial benefit in doing it this way.

In fact, Financial advisors recommend exercising the option yourself and then donating the other appreciated assets as there is no benefit.

why didn't he just do that! Why is he walking into a political minefield to keep shares that have no special value to him?

He did this because he was not legally able to sell them until after he was inaugurated, and by then it would have been too late.

It's also worth noting that the agreement on these options state that the agreement is:
irrevocable and may not be terminated, waived or amended
So, even after he is out of office, he can't back out of the agreement.

If you're a smart politician you get rid of the rumours. Cheney seems a pretty smart guy, so why isn't he squashing this whole thing by selling his shares now and buying whatever he damn well wants with the money when he leaves office? Insuring yourself and pledging profits to charity is a really circular method of doing things, so just what is he trying to circumvent?

Put it this way, if I was a Republican party campaigner I'd want Cheney to dump those shares right now. He's not going to lose anything by dumping them now instead of 3 years time, given his claims of zero-profits, so I'd tell him to get on with it.If you think that the shares are only shares, then you don't understand the full breadth of the situation.

If you think that the shares are only shares, then you don't understand the full breadth of the situation.

Correct. We aren't talking about actual shares, but Stock options. IE the agreed upon right to buy a stock at a certain price at a certain time. Cheney sold off any stocks he had. This is an entirely different story.

He did this because he was not legally able to sell them until after he was inaugurated, and by then it would have been too late.

Too late for what exactly? He may not have been able to divest them before inauguration but presumably he could do it when the opportunity arose. Why does he have to keep this strange system of charitable donations and insurance going for what will be close to ten years? Why can't he divest them tomorrow?

If you think that the shares are only shares, then you don't understand the full breadth of the situation.

Shares, options, whatever. The options seem to be highly lucrative. What is the extra breadth of situation?

Too late for what exactly? He may not have been able to divest them before inauguration but presumably he could do it when the opportunity arose. Why does he have to keep this strange system of charitable donations and insurance going for what will be close to ten years? Why can't he divest them tomorrow?

He had to do it before the inauguration to avoid the very thing he is being accused of. He needed to square it away before he was in office.


Shares, options, whatever. The options seem to be highly lucrative. What is the extra breadth of situation?

Shares and Options are pretty different. Options can be highly lucrative, but, in Cheney's case it isn't as he essentially gave them up to charity. The only way he could see any financial benefit to the options is if he cancels the agreement, which he can't do.

He had to do it before the inauguration to avoid the very thing he is being accused of. He needed to square it away before he was in office.

That's not an answer. Why can't he divest himself of the options tomorrow, giving any profits to charity as he promised and clearing up all the confusion?

(US politicians do seem to like to make things complicated. I can't seem to think of any other group of people who come up with such intracate and perplexing reasons for their behavoir.)

That's not an answer. Why can't he divest himself of the options tomorrow, giving any profits to charity as he promised and clearing up all the confusion?


It's not an answer? Of course it is. He needed to remove any financial interests with Halliburton Before he took office to avoid any conflict of interest. He couldn't legally do it before he took office, so he set up the agreement. The only confusion are the people who are trying to claim otherwise.

Plus, if I were going to set up money for charity, I would probably try to get it to provide the maximum amount of funds to those charities. The way it's set up does exactly that.

Bottom line is he gains ZERO financial benefit from his remaining Stock Options. He will never gain any from them in the future. People keep dragging this up as if it's some shady deal or some big worry when it is simply people looking for something to grief the current administration over.

There are plenty of things to complain about this administration that doesn't involve fictional financial interests. Beating this non-existant dead horse is just silly.

Instead of giving a politician's answer, can you say why he can't divest himself of the options tomorrow, give the profits to charity, and be done with it.

All the stuff about maximising profits for charity and the rest of it is nice but irrelevant. All the stuff about him getting zero financial benefit becomes irrelevant once he properly divests himself of the options. It will never become dead horse while Cheney has this complex insurance and charity scheme that boggles the imagination instead of just divesting himself of the options.

Instead of giving a politician's answer, can you say why he can't divest himself of the options tomorrow, give the profits to charity, and be done with it.

Because he can't. The agreement prevents it. The charities can do it, as per the agreement, but he can't.

All the stuff about maximising profits for charity and the rest of it is nice but irrelevant.
You asked why do it. It's a reason to do it. While it may be irrelevant to the situation, it's relevant to your question of why to do it.

All the stuff about him getting zero financial benefit becomes irrelevant once he properly divests himself of the options.
It's irrelevant now. It's out of his hands now. He gets no money, no tax benefits. Halliburton can close it's doors tomorrow or make a 900 trillion dollar profit and there wouldn't affect him in the least.


It will never become dead horse while Cheney has this complex insurance and charity scheme that boggles the imagination instead of just divesting himself of the options.
It is a dead horse. It just won't get a burrial because bitter Gore and Kerry supporters just don't want to face reality. There is nothing that boggles imagination here. He legaly couldn't do it before, he doesn't control the options now so he can't do it now. There is no insurance on the options.

There is nothing mysterious about the insuarance either. That was for his defered salary agreed upon when he left the company. All it does is guarantee he will get the salary he earned from the company no matter what happens to it. This sort of protection is common business practice too!

So, Halliburton can't legally increase or decrease his defered salary. The only thing that could affect that is if they went bankrupt. That's where the insurance comes in. If they were to go bankrupt, Cheney would STILL get paid. So, There is no financial dependance on Halliburton for the salary. And to top it all off, the last of these defered payments was this year. He gets no more from them after 2005. If he didn't insure this salary, he would have a financial stake in the company. But since he did insure it, he doesn't.

So, to summarize:
-He gets NO money from the Stock Options.
-He get NO tax benefit from the Stock Options.
-He has been getting nothing but a defered salary that will not and can't increase or decrease no matter what he does or what happens to Halliburton.
-He simply doesn't doesn't have any financial stake in Halliburton now.

See, it is a dead horse.

Because he can't. The agreement prevents it. The charities can do it, as per the agreement, but he can't.

What is to stop him from asking the charities to accept the options now? I'd expect they would do it immediately if he requested. What is to stop Cheney and the charities completing the divestment of his shares tomorrow?

Well, first off, I doubt the several universities would be too keen to agree to get less Money when they control the funds. Especially when it takes a unanimous vote (according to the agreement) to do so. And why should they. There is nothing illegal, immoral or even vaguely questionable with the practice.

Also, and this is what you don't seem to clear on. There are NO SHARES TO DIVEST. There are options to buy shares for a fixed price (no matter the stock value) at specific times. The Trust he set up can excersise SOME of these options as long as they have matured. Cheney simply gave the right to buy these stocks, that he does not own, to the charities.

Difference between Stock and Options: http://www.investopedia.com/articles/optioninvestor/03/073003.asp

Oh forgive me, I keep writing shares instead of options. Mental slip.

Well, first off, I doubt the several universities would be too keen to agree to get less Money when they control the funds.

Are the share options set up so that if they are collected before the due date then the purchase price or quantity of the share options change? If not, then the universities will have the capability to re-invest the proceeds of the share options in property, shares, people, research or whatever they want. There would be no reason not to take the money at an earlier date.

Why re-invest at all? cashing in options just to buy other appreciating assets don't make a lot of sense, especially if the original options are lucrative enough.

But, what you seem to be fundimentally ignoring is that it's up to the charities and not Cheney. And Cheney has no right to ask the charities to do it. And he has no legal or moral obligation to do so either.

I still don't get the problem. Cheney worked for Halliburton just before he became VP. He then insulated himself, financially, from them removing any potential conflict of interests.

All I see here is you suggesting that something needs to be done about a problem that doesn't exist. Why is this even important when it doesn't affect Cheney in the slightest? I'd agree if this did present a conflict of interest, but since it doesn't what's the point?

All I see here is you suggesting that something needs to be done about a problem that doesn't exist. Why is this even important when it doesn't affect Cheney in the slightest? I'd agree if this did present a conflict of interest, but since it doesn't what's the point?

OK ... I take it that the charities and Cheney can presumably exercise the share options now, without loss, and remove the potential conflict of interest. The beneficiaries could immediately reinvest the proceeds in Halliburton or anything else they choose, which seems to be an advantage for them. In essence, it seems that Cheney can actually divest himself of the political accusations surrounding the options but is unwilling to do so. The only complications are complications surrounding an agreement that he himself constructed.

Politics is not always about facts. Opinions can be as important. If Cheney divests his share options it may not change any facts about profits, but it might change opinions.

Sheesh, how many times do I need to say this? Cheney can't. They are out of his control now. Cheney has zero control of what is done with the options. Get it? Cheney doesn't divest is options because he legaly can't because he gave up control of them.

The horse is still dead. Let it rest in peace!

I don't believe it's 'too late'. I've seen nothing to suggest that the charities can only maximise the potential of the donation by leaving the options to be exercised in the future. I believe that Cheney will continue to suffer political damage from the status quo. I believe that the complexities of his arrangements, mostly of his own making, are no excuse to resolving them simply.

The horse isn't dead. The basic question, "Why doesn't he agree with the charites to divest these options?", has only been answered by "Why should he?". That isn't satisfying.

omg, I so want to lock this thread. =/

omg, I so want to lock this thread. =/Ooooo GO FOR IT!! :D

:dh2: :deadhorse

Sheesh, how many times do I need to say this? Cheney can't. They are out of his control now. Cheney has zero control of what is done with the options. Get it? Cheney doesn't divest is options because he legaly can't because he gave up control of them.

The horse is still dead. Let it rest in peace!

Just like Frist's money was in a blind trust he couldn't see or control, right?

The two situations are not analagous. Frist stood to benefit from his trust, but was barred from knowledge of its operation. Cheney will not benefit from the exercise of the options, but there is nothing to prevent his knowledge of their disposition. He is not allowed to control their disposition, but has no incentive to either. Frist had a considerable incentive to break the blinds on his trust.

The two situations are not analagous. Frist stood to benefit from his trust, but was barred from knowledge of its operation. Cheney will not benefit from the exercise of the options, but there is nothing to prevent his knowledge of their disposition. He is not allowed to control their disposition, but has no incentive to either. Frist had a considerable incentive to break the blinds on his trust.

They are analagous in the fact that I have no faith, in either of them, to abide, honestly by the terms with which they supposedly seperrated themselves from their money.

Oh..and Cheney was paid a few million dollars as a going away present by Halliburton.

I also rather suspect he'll get a job with them again after his term with some nice hefty stock bonuses.

Oh..and Cheney was paid a few million dollars as a going away present by Halliburton.? You are the first to state this and I wonder if you can cite a reference. I know that he was due a year end bonus that was a part of his compensation package and even though he left before year end he had to wait for this bonus until year end figures were calculated. I believe he made arrangements to take multi-year payouts for this bonus, too. But I don't know of Haliburton paying him a "leaving bonus". Please cite a reference. I'd be interested to look through it.

its called severance

Read the link Tea keeps posting.

You can call it deferred salary, or severance, or circus peanuts if you like. It doesn't change the fact that Cheney received a few million dollars from Halliburton after Bush and he won the first election and before they took office.

Just like Frist's money was in a blind trust he couldn't see or control, right?

No, Frist's was actual stock not stock options. The difference has already been discussed.

You can call it deferred salary, or severance, or circus peanuts if you like. It doesn't change the fact that Cheney received a few million dollars from Halliburton after Bush and he won the first election and before they took office.

He did recieve money after gettting office, but there is nothing illegal or unethical about it. The deferred salary was insured so that no matter what happened to Halliburton he would still get the same amount of money.

I don't believe it's 'too late'. I've seen nothing to suggest that the charities can only maximise the potential of the donation by leaving the options to be exercised in the future. I believe that Cheney will continue to suffer political damage from the status quo. I believe that the complexities of his arrangements, mostly of his own making, are no excuse to resolving them simply.

lol, yeah let's not use a simple solution to a problem that needed to be addressed. Frankly, I don't think Cheney is suffering any political damage from this. The only people whining about it are the people that didn't support him in the first place.


The horse isn't dead. The basic question, "Why doesn't he agree with the charites to divest these options?", has only been answered by "Why should he?". That isn't satisfying.

It may not be satisfying for you, but, if there is no financial conflict of interest between cheney and halliburton what does it matter?

RIP you poor, poor dead horse.

There may be no legal conflict of interest...but you (and the GOP) must really believe Americans are idiots if you expect us to disbelieve that Cheney isn't doing some reciprocal backscratching and won't get more money from the now even more successfull halliburton after he leaves office.

And to think you folks got pissed because Clinton was letting his supporters sleep in the Lincoln bedroom. I bet they feel ripped off after seeing what Cheney's buddies get.

There may be no legal conflict of interest...but you (and the GOP) must really believe Americans are idiots if you expect us to disbelieve that Cheney isn't doing some reciprocal backscratching and won't get more money from the now even more successfull halliburton after he leaves office.

And to think you folks got pissed because Clinton was letting his supporters sleep in the Lincoln bedroom. I bet they feel ripped off after seeing what Cheney's buddies get.

Now that would be an entirely different discussion. We're talking about conflicts of interest due to the stock options and deferred salaries. But even what you are suggesting is nothing more than speculation. I'm just trying to dispell this silly myth that has been around too long, and dragged back out far too often.

If I were Cheney, and without any sort of ethics, I'd probably have left some pretty good friends back in Halliburton and I'd want to throw work their way whenever possible. I'd probably expect to get treated very well in return some time in the future.

Cheney is going to be a highly valuable consultant or director for any company selling services to the government. His future rewards are going to be so high that it might be hard to tell if there's icing on top for any "special favours" in office.

"future rewards" are all speculation and have zero to do with the original article which dealt with the Stock Options. You guys are really grasping at straws if you have to start citing what may or may not happen.

Personally, I'm betting that Cheney will retire when he leaves office. He'll be 68 and he has health problems. That's by no means a definate, but It seems fairly likely to me.

I think he's probably already so incredibly wealthy that he's not going to have to do anything after he leaves office. Unless he is getting blackmailed or something by a gay, sado-masochistic hooker or something. :p

Maybe this is the source of the skepticism you're seeing about Cheney and Halliburton:

...With the war looming, the agency wanted to award a no-bid "emergency" contract to Kellogg, Brown and Root (a Halliburton subsidiary) that was originally scheduled to last for two years -- and up to five years -- to provide a range of services in Iraq.

A potential five-year emergency? Worth billions? On a no-bid contract?

Greenhouse thought that was absurd. There were other companies who could do the work, she said, and they should be allowed to bid on it. She wrote that the original "emergency" contract should be limited to one year, with no options after that. She says when she got the final contract back, it was unchanged. So she wrote her reservations on it in ink.

Her notations became public through a media outlet's Freedom of Information Act request to see government war contracts. Given Halliburton's political connections, the issue eventually blew up into international news last fall, just before the elections. Greenhouse and Kohn gave interviews to national media. The FBI opened an investigation -- still ongoing -- into alleged price-gouging, overbilling and awarding of sole-source contracts to a politically connected company. Many of those questions still linger, and by no means do they all stem from Greenhouse, but from a range of sources. Greenhouse herself made several allegations of wrongdoing, but one of the most sensational charges, initially seeming to back up her concerns, was a Pentagon audit that found that KBR apparently overbilled the government $61 million for fuel in Iraq.

The audit was quelled, however, when the Corps granted KBR a waiver from explaining the apparent discrepancy. The agency said KBR's pricing had been dictated by an Iraqi subcontractor.

...

Bunny blew the whistle (http://www.washingtonpost.com/wp-dyn/content/article/2005/10/18/AR2005101801796_pf.html) on the no-bid contracts and now she's suffering for it. Looks like a good read.

You've GOT to be a pretty strong person if you have lived 61 years with a name like Bunnatine Hayes Greenhouse! No doubt there!

Yeah! Isn't her name cool? Bunnatine!

From Factcheck.org

You can have all the fun you want, speculating why she was fired, but the facts are out there.

The relevant parts are below, but, this is of note.

GAO Report: For example, the Army Corps of Engineers properly awarded a sole-source contract for rebuilding Iraq's oil infrastructure to the only contractor that was determined to be in a position to provide the services within the required time frame

The latest ad to malign Halliburton is called "Platter." Moveon Pac says it is spending $1 million to air it in Ohio, Missouri, Oregon, Nevada and Washington, D.C. But what it says is either unproven or contradicted by federal investigators.

"Silver Platter?"

The ads went up June 15, stating that the company's no-bid contract for Iraq came "on a silver platter." That's an opinion held by many, of course. But evidence to the contrary came to light in House hearings held just as the ads were appearing.

The head of the GAO told a House watchdog committee that it had looked into no-bid contracts in Iraq, including Halliburton's, and concluded that the Pentagon and other agencies "generally complied with applicable laws and regulations governing competition" when awarding them. Comptroller General David Walker faulted the Pentagon for some add-ons to those contracts, called "task orders," that he said were not properly justified in writing prior to the award. But he also said the agencies probably would have been able to formally justify the awards given urgent wartime needs (emphasis added):

Comptroller General David Walker: Importantly, given the war in Iraq, the urgent need for reconstruction efforts, and the latitude allowed by the competition law, these task orders reasonably could have been supported by justifications for other than full and open competition.

Preceding Walker's testimony was a formal GAO report to Congress stating, among other things, that the Army Corps of Engineers "properly" awarded a sole-source contract for rebuilding Iraq's oilfields (emphasis added):

GAO Report: For example, the Army Corps of Engineers properly awarded a sole-source contract for rebuilding Iraq's oil infrastructure to the only contractor that was determined to be in a position to provide the services within the required time frame.

That contract, of course, went to Halliburton's subsidiary, Kellogg, Brown & Root. So much for critics alleging that the Bush administration showed favortism to Halliburton because Vice President Cheney was once its CEO.

That contract, of course, went to Halliburton's subsidiary, Kellogg, Brown & Root. So much for critics alleging that the Bush administration showed favortism to Halliburton because Vice President Cheney was once its CEO.

I must be missing something... why would awarding a no-bid contract to a Halliburton subsidiary disprove favoritism? Maybe they should have made this sentence part of the preceding paragraph.

The FBI opened an investigation -- still ongoing -- into alleged price-gouging, overbilling and awarding of sole-source contracts to a politically connected company. Many of those questions still linger, and by no means do they all stem from Greenhouse, but from a range of sources.

Bunny worked in the office that awarded or reviewed contracts she said:
With the war looming, the agency wanted to award a no-bid "emergency" contract to Kellogg, Brown and Root (a Halliburton subsidiary) that was originally scheduled to last for two years -- and up to five years -- to provide a range of services in Iraq.

A potential five-year emergency? Worth billions? On a no-bid contract?

Greenhouse thought that was absurd. There were other companies who could do the work, she said, and they should be allowed to bid on it. She wrote that the original "emergency" contract should be limited to one year, with no options after that. She says when she got the final contract back, it was unchanged. So she wrote her reservations on it in ink.

Her notations became public through a media outlet's Freedom of Information Act request to see government war contracts. Given Halliburton's political connections, the issue eventually blew up into international news last fall, just before the elections. Greenhouse and Kohn gave interviews to national media. The FBI opened an investigation -- still ongoing -- into alleged price-gouging, overbilling and awarding of sole-source contracts to a politically connected company. Many of those questions still linger, and by no means do they all stem from Greenhouse, but from a range of sources. Greenhouse herself made several allegations of wrongdoing, but one of the most sensational charges, initially seeming to back up her concerns, was a Pentagon audit that found that KBR apparently overbilled the government $61 million for fuel in Iraq.

I must be missing something... why would awarding a no-bid contract to a Halliburton subsidiary disprove favoritism? Maybe they should have made this sentence part of the preceding paragraph.

The award itself doesn't. But, the Actual investigation's report does.

They determined that: Army Corps of Engineers properly awarded a sole-source contract for rebuilding Iraq's oil infrastructure to the only contractor that was determined to be in a position to provide the services within the required time frame


The FBI opened an investigation -- still ongoing -- into alleged price-gouging, overbilling and awarding of sole-source contracts to a politically connected company. Many of those questions still linger, and by no means do they all stem from Greenhouse, but from a range of sources.

Nice, they cite sources without actually doing so. But, this is not about awarding the contract it's about potential over charges. HEre's more info on that.
"Caught Overcharging?"

Gasoline:The ad makes a claim that Moveon can't back up when it states that "the Pentagon caught Halliburton overcharging $61 million for gasoline." To support that claim Moveon points to an Associated Press story from last December. But that's not what the AP story said. The AP reported that a Pentagon audit found Halliburton "may have overcharged the Army" and that the auditors found "potential overcharges of up to $61 million for gasoline."

The difference between a potential overcharge and an actual overcharge is a big one, of course. It's the difference between a suspicion and a proven fact. The AP story and other news accounts were based on a preliminary audit by the Defense Contract Audit Agency (DCAA), and Halliburton disputed the findings and insisted that the high prices it charged for gasoline were made necessary by wartime requirements imposed by the Pentagon. "We believe that once the DCAA receives our response, it should be clear that no overcharges have occurred," the company said in a news release at the time.

In fact, the gasoline billing dispute is still being reviewed by the Defense Contract Audit Agency, and is still considered a "potential" overcharge. A March 11 story in The Wall Street Journal reported that the Pentagon had asked the Department of Justice to look into the gasoline matter also, raising the possibility of a criminal investigation. However, a Department of Justice spokesman contacted June 18 would give no information about that.

One serious matter regarding gasoline wasn't caught by the Pentagon, either. It was caught by Halliburton's own internal auditors, who accused two company employees of taking kickbacks from subcontractors for allowing them to inflate the price they charged Halliburton for gasoline. Halliburton fired the employees and tentatively refunded $6.3 million to the Pentagon. That's still under review by Pentagon auditors and also by the Pentagon Inspector General.

Meals for Troops: The ad is partly right when it says Halliburton "billed over $100 million for meals for our troops that they never delivered." It is true that Pentagon auditors have withheld payments to Halliburton for meals served to troops, pending completion of its review of possible overcharging. And the disputed amount has grown to $186 million, actually. But that's not the whole story.

To start, Halliburton says its contract never called for billing according to meals actually served. The matter is still under review and auditors have made no final determination. Halliburton continues to insist that the matter will be resolved in its favor.

There's also disagreement over the size of the possible overcharge, should Halliburton's reading of its contract prove wrong. The company estimates that it has billed for 19 percent more meals than were actually consumed, while DCAA auditors say the figure could be as high as 36 percent.

The numbers are daunting; Halliburton has billed $800 million so far to build and operate more than 60 military dining halls in Iraq and Kuwait. The company says it's a tough job: it has to plan, purchase and prepare meals based on estimates because guessing who's coming to dinner in a war zone is complicated when soldiers go on leave or troops are shifted to other locations. The company said in a news release Feb. 2:

Halliburton news release: It is difficult to determine how many people will be at the dinner table in the middle of a war zone . . . This is not a neighborhood restaurant where you can quickly total up all the dinner tabs.

Nevertheless, the head of the DCAA, William Reed, testified June 15 to the House Committee on Government Reform that his auditors have found "substantial deficiencies" in the data provided by Halliburton to support its billing. "We are continuing to evaluate additional supporting information provided by KBR (Kellogg, Brown & Root, the Halliburton subsidiary) and will be issuing final recommendations . . . in the near future."

After that, the Pentagon contracting officer may or may not accept the DCAA recommendations. Should the Pentagon ultimately deny payment Halliburton would still have the option of going to court. So the matter is far from resolved.



Bunny worked in the office that awarded or reviewed contracts she said:

With the war looming, the agency wanted to award a no-bid "emergency" contract to Kellogg, Brown and Root (a Halliburton subsidiary) that was originally scheduled to last for two years -- and up to five years -- to provide a range of services in Iraq.

A potential five-year emergency? Worth billions? On a no-bid contract?

Greenhouse thought that was absurd. There were other companies who could do the work, she said, and they should be allowed to bid on it. She wrote that the original "emergency" contract should be limited to one year, with no options after that. She says when she got the final contract back, it was unchanged. So she wrote her reservations on it in ink.

Her notations became public through a media outlet's Freedom of Information Act request to see government war contracts. Given Halliburton's political connections, the issue eventually blew up into international news last fall, just before the elections. Greenhouse and Kohn gave interviews to national media. The FBI opened an investigation -- still ongoing -- into alleged price-gouging, overbilling and awarding of sole-source contracts to a politically connected company. Many of those questions still linger, and by no means do they all stem from Greenhouse, but from a range of sources. Greenhouse herself made several allegations of wrongdoing, but one of the most sensational charges, initially seeming to back up her concerns, was a Pentagon audit that found that KBR apparently overbilled the government $61 million for fuel in Iraq.


The bolded part is just an opinion of bunny, but the findings of the House commitee looking at this has found it to be wrong. Again, they reported that :Army Corps of Engineers properly awarded a sole-source contract for rebuilding Iraq's oil infrastructure to the only contractor that was determined to be in a position to provide the services within the required time frame
[/b]

The rest, is related, but a different topic. It's about the FBI investigation into overcharges. And That investigation isn't over. But also, no charges have been filed either.

The Army Corps of Engineers is not an independant organization. It is under control of the executive branch.

I don't put much faith when the source for how "fair" these contracts have been is the ACoE.

The FBI opened an investigation -- still ongoing -- into alleged price-gouging, overbilling and awarding of sole-source contracts to a politically connected company. Many of those questions still linger, and by no means do they all stem from Greenhouse, but from a range of sources.

Nice, they cite sources without actually doing so. But, this is not about awarding the contract it's about potential over charges. HEre's more info on that.

You seemed to miss something, yes it was about awarding the contract in addition to the other things.

About overbilling the meals, there was a Saudi Company that was doing it for $3 per meal. Then the contract was given to Halliburton and they charged $5 per meal. But in reality they sub-contracted back to the very same Saudi company that was charging $3.0 and they pocketed the other $2.0.

http://en.wikipedia.org/wiki/Government_Accountability_Office_investigations_of _the_Department_of_Defense

The investigation also uncovered questionable procurement arrangements with Halliburton. According to a United Press International article published in The Washington Times, the Kuwaiti-owned Timimmi Company had been serving hot meals to troops stationed in Iraq for $3 a meal. The contract was later reassigned to Halliburton, which raised the price to $5 a meal, subcontracted the meal services back out to Timimmi, and kept the 40% difference. GAO Analyst Neil Curtain exposed the problem in a Congressional hearing, noting, "Certainly that’s unfair to the taxpayer"[2].

Is this another service only Halliburton can provide?

Is this another service only Halliburton can provide?

Yes. Apparently Halliburton is the only company capable of screwing the taxpayer so blatantly and getting away with it. I need to go into that kind of service industry.

The report stated that they were the only ones able to provide the service in the time frame needed. I'm not going to defend on how or what the company did or did not do. I'm just showing why the contract was awarded to them. And it certainly wasn't to make Cheney rich, as this thread has stated.

I personally hope Halliburton gets everything they deserve. I just don't have an axe to grind like many seem to have.

About overbilling the meals, there was a Saudi Company that was doing it for $3 per meal. Then the contract was given to Halliburton and they charged $5 per meal. But in reality they sub-contracted back to the very same Saudi company that was charging $3.0 and they pocketed the other $2.0.


This statement is almost certainly untrue, or incomplete at best. The reasons for this lie in the arcana of government contracting and auditing practices. I'm sure that anyone really interested in the FAR can find the details on the web, so I will not go into them here. In practice, though, it's safe to say that it would be nearly impossible for Halliburton to make a 67% profit serving meals (or doing anything else for the government, for that matter.)

Vestix, I have an idea, why don't you go read the article and check the sources before you sit back and say it is untrue. Sheesh! Ya lazy yatz. (wow, how'd I write a sentence with so many z's and y's).

Vestix, I have an idea, why don't you go read the article and check the sources before you sit back and say it is untrue. Sheesh! Ya lazy yatz. (wow, how'd I write a sentence with so many z's and y's).

lol, now if you would only take the same advice before you post a lot of what you say.

I usually follow through, I might disagree with your sources and find my own to contradict you, but if I'm going to post, I take the time to read what was linked before I respond to it.

In practice, though, it's safe to say that it would be nearly impossible for Halliburton to make a 67% profit serving meals (or doing anything else for the government, for that matter.)

Why? In a semi-warzone like Iraq there are very high risks and very high profits. The price normally paid by the US for goods and services is completely different from the local economy. Supply and demand of quality good will be horribly skewed. Some people will be making massive profits there.

No company does anything out of the goodness of their heart. If "Timimmi" was selling the meals at $3/ea, that means they were making their profit. If Halliburton signed Timimmi as a subcontractor to provide the meals at $3 to them, they had every right to add the additional $2 as their profit margin. How do you know that the meals didn't cost Timimmi $1.75 to make?

That isn't the issue in the slightest. The two issues I see there is why did the meal contract go to Halliburton in the first place? And why was it necessary for Halliburton to make such an enormous markup on meals they're not even providing?

Even removing all the issues surrounding our VP's possible ties to the company, the stupidity of this war and how poorly it is going, it irritates me to see my tax dollars being frittered away like that.

That isn't the issue in the slightest. The two issues I see there is why did the meal contract go to Halliburton in the first place?

Because They were the only company that could do it in the timeframe needed. I've mentioned that several times.


And why was it necessary for Halliburton to make such an enormous markup on meals they're not even providing?
This is a completely different topic from "cheney gets rich off the war"


Even removing all the issues surrounding our VP's possible ties to the company, the stupidity of this war and how poorly it is going,

Halliburton has nothing to do with how the war is going. It's just you trying to switch attention from the actual discussion but using topics that you are extremely emotionally tied to.


it irritates me to see my tax dollars being frittered away like that.
That's fine. You have all the right in the world to feel that way. It just has nothing to do with Cheney's Defered salary or the Stock Options going to charity.

I'm not trying to argue for or against what Halliburton is or isn't doing. I'm just trying to get people to stop the FUD posts like this filled with accusations that have already been proven false.

What really gets me the most is, if the Anti-Bush folks put half the energy they put into stuff like this, and put it to finding an decent candidate maybe things would change.

You really think Halliburton is the only company in the US that is capable of finding a sub-contractor in the Middle East to provide meals to our soldiers?

Ok...

No company does anything out of the goodness of their heart. If "Timimmi" was selling the meals at $3/ea, that means they were making their profit. If Halliburton signed Timimmi as a subcontractor to provide the meals at $3 to them, they had every right to add the additional $2 as their profit margin. How do you know that the meals didn't cost Timimmi $1.75 to make?

But then the it begs the question of why the hell we didn't just keep buying it directly from Timimmimmmiiimmiiimimii, intead of paying halliburton an extra 2 dollars per meal for the honor of buying them from timimmimimimmmiiiimimi like we were before.

Vestix, I have an idea, why don't you go read the article and check the sources before you sit back and say it is untrue. Sheesh! Ya lazy yatz. (wow, how'd I write a sentence with so many z's and y's).

I always read linked articles before I respond to a post. I also think critically about what's read, and don't automatically believe everything I read, even from such a distinguished source as Wikipedia.

In this case, the source is a Wikipedia article relating a UPI story reported in the Washington Times. I have a pretty decent knowledge of how federal contracting works, and have seen how often the press gets it wrong when reporting contracting abuses. So, when I see a claim like this, I'm skeptical. Add in the extra levels of redirection, and I get more skeptical.

Now, let's take a look at the question at hand. As related in Wikipedia:

According to a United Press International article published in The Washington Times, the Kuwaiti-owned Timimmi Company had been serving hot meals to troops stationed in Iraq for $3 a meal. The contract was later reassigned to Halliburton, which raised the price to $5 a meal, subcontracted the meal services back out to Timimmi, and kept the 40% difference.

A remarkable claim. Lets look at the actual article published here. (http://washingtontimes.com/upi-breaking/20040615-082100-3407r.htm)

The relevant section:

Once Kellogg, Brown and Root, the subsidiary, was removed from overseeing the contract in April and the military dealt directly with the Kuwaiti-owned Timimmi company that actually provided the meal service, the per-meal price dropped from about $5 to about $3, according to GAO Comptroller David Walker.

"Certainly that's unfair to the taxpayer," Curtain said of the contract arrangement.

The contract was originally awarded to Timimmi but was put under a $10 billion umbrella logistics capability contract that KBR won in 2001 for operations in Iraq, Afghanistan and elsewhere in the Middle East.

What's the difference? The Washington Time article has no information on what the pre-KBR cost per meal was. It only states that after the contract was re-issued directly with Timimmi, the cost dropped from $5 to $3. So where does the pre-KBR cost figure come from? We don't know, but it's not this article. It would be rash to assume that it was $3, just because that was the cost on the reissued Timimmi contract. Costs for an item can change remarkably across contracts for reasons that have nothing to do with the item being provided.

However, let's assume for the sake of argument that the quoted cost figures are all correct, i.e., that Timimmi was charging $3 before and after the KBR contract, and that KBR was charging $5. Does this mean that KBR was in fact making a $2 profit on a pass-through?

No. Not even close. Before making this assertion, we'd have to know a lot more about the contracts involved. Was the same food being prepared, in the same amounts, at the same times, in the same places? If not, then this could be an apples and oranges comparison. How about overhead, or, in gov-speak, "indirect costs." This typically includes items such as administrative costs, facilities, workers benefits, and other items that are not directly billed to the government, but are a part of executing the contract (hence, the term indirect costs.) These costs are spread in various ways across all of the goods and services provided in a contract, just as is done in the private sector. If this was a major part of the difference between the Timimmi and KBR costs, then shifting the contract back to Timimmi would not actually save the government any money at all, it would just move it around.

But how can we know that the above isn't irrelevant, and that KBR really wasn't making 67% profit on meals?

We don't know for certain, hence my original statement that the report was "almost certainly wrong or incomplete", and there is no way we can know for sure without a lot more information. But we can be pretty sure KBR didn't make that much money.

Which brings up the question:

Why? In a semi-warzone like Iraq there are very high risks and very high profits. The price normally paid by the US for goods and services is completely different from the local economy. Supply and demand of quality good will be horribly skewed. Some people will be making massive profits there.

Yes, this would be true if the government followed free-market policies in its procurements, but it doesn't.

If someone really wants a soporific, I'll write a post on how the U.S. federal government does contracting, replete with descriptions of time-and-materials (T&M), cost plus award fee (CPAF), cost plus fixed fee (CPFF), firm fixed price (FFP), and other contract types. I'd rather not, though. It's tedious, and the info is almost certainly on the web.

What is boils down to is that with contract requirements as uncertain as they were when Halliburton/KBR were awarded their contracts, it is a virtual certainty that they got some type of T&M or cost-plus contract. By the way, I looked for this information but was unable to find it. Not surprising, since this type is detail is rarely reported in the media.

With these types of contracts the government determines what are and are not reasonable and allowable costs, particularly in regards to indirect costs. This includes fee (which includes profit and so-called non-allowable costs - a topic for another post). The federal government is rather strict about the fee allowed on contracts. The last time I checked (which was years ago), it was illegal to have a contract fee of over 15%, and 8% was typical. It is now a common practice for the government to disallow fee altogether on ODCs, i.e., other direct charges. These are typically material items bought for use on a specific contract. I suspect that operating in a war zone would warrent a fee close to the current maximum, whatever that is.

You should also know that the government has the right to make such decisions retroactively, and does so routinely. It is not uncommon at all for government auditors to decide that some cost or another on a contract was unallowable or excessive, and then to either withhold payments or demand a return of money already paid.

I suppose it is possible that the FAR allows for above-normal fee for operations in a war zone, but I rather doubt it. That's not the way the government operates. When I have some more time, I'll check on this.

What this all means is that the original idea that KBR was making 67% profit on a pass-through is dubious at best, and that the idea that they would be allowed to retain this amount of profit even more so. It will be interesting to follow this story over in the future and see how it evolves.

BTW, Panamah, I assure you that I am neither a liberal nor a bogan ;)

Because They were the only company that could do it in the timeframe needed. I've mentioned that several times.

Even if that were true (which I don't believe in the slightest...too many people have suggested otherwise), why were their no bid contracts for 5 years instead of a more limited time after which they could open the jobs up for bidding?


This is a completely different topic from "cheney gets rich off the war"

Its not a different topic at all. Halliburton is making a bundle as a direct result of who holds the executive branch.





What really gets me the most is, if the Anti-Bush folks put half the energy they put into stuff like this, and put it to finding an decent candidate maybe things would change.

Every time we get a decent candidate the Bush League steals the election.

You really think Halliburton is the only company in the US that is capable of finding a sub-contractor in the Middle East to provide meals to our soldiers?

Ok...

In the time allowed? why not?

But then the it begs the question of why the hell we didn't just keep buying it directly from Timimmimmmiiimmiiimimii, intead of paying halliburton an extra 2 dollars per meal for the honor of buying them from timimmimimimmmiiiimimi like we were before.

Can the US government buy from directly from foriegn sources like that for these contracts?

Its not a different topic at all. Halliburton is making a bundle as a direct result of who holds the executive branch.


It doesn't matter how much Halliburton makes. Cheney isn't getting any of it. which is the original topic. You may choose to not believe that, but, you do so in the face of contradicting evidence.


Every time we get a decent candidate the Bush League steals the election.

Keep telling yourself that. Anti-Bush folks put so much energy into promoting this idea that they don't put what they need to into a candidate that IS decent. So, instead of finding someone that would sway those of us that are more moderate, they bring in the Gore's and Kerry's then cry foul as much as possible, hoping nobody notices.

I have many friends that voted for Kerry... er, actually the voted "anyone but Bush." They knew little to nothing of Kerry and his policies. That's no way to win an election, and I wouldn't want to see someone get in on that.

It doesn't matter how much Halliburton makes. Cheney isn't getting any of it. which is the original topic. You may choose to not believe that, but, you do so in the face of contradicting evidence.

I don't believe your evidence is contradicting. It shows that Cheney received a large payoff before taking office and that he has even more in 'stock options' which, I have no doubt, he'll get his hands on once he's out of office.



Keep telling yourself that. Anti-Bush folks put so much energy into promoting this idea that they don't put what they need to into a candidate that IS decent. So, instead of finding someone that would sway those of us that are more moderate, they bring in the Gore's and Kerry's then cry foul as much as possible, hoping nobody notices.

It doesn't matter how many moderates you bring over when there are counties in Ohio where there were more votes for Bush than there were registered voters in the district.

I'm afraid to disappoint you Vestix, but just because the US government has set up a complex set of standards for procurement it doesn't mean its suppliers actually follow them. Business just isn't that nice.

I'm afraid to disappoint you Vestix, but just because the US government has set up a complex set of standards for procurement it doesn't mean its suppliers actually follow them. Business just isn't that nice.

It's not a question of being nice. It's a question of wanting to stay in business.

If you look, you will certainly find cases of companies that have flagrantly violated the law. You will also find a record of prosecutions, convictions, fines, and jail time. If such a company doesn't go bankrupt, it will be banned from doing any future business with the federal government.

Do you think that ignoring the law is the norm in federal contracting? If so, I'd like to know what you base that belief on. Are you familiar with the auditing practices of the U.S. government? Are you familiar with the fraud hotlines and incentive programs that the government has? Do you think that government auditors are corrupt or incompetent? Just what is your rationale here, Anka? Let's have some facts instead of inane generalizations.

What you are all missing is that the American public doesn't require facts or proofs.

We require that our officials avoid even the appearance of impropriety.

Are you familiar with the fraud hotlines and incentive programs that the government has?

That must mean that the US government is aware that companies try to defraud them in their contracts. If companies never did it, there would be no need for a helpline would there?

We require that our officials avoid even the appearance of impropriety.
I highly doubt that.

Unless you plan on a ban for congressmen and women and senators with law degrees.

What is a bogan?

Synonym for yatz - an unintelligent and disliked person, esp. when a member of a subculture such as hip-hop or redneck.

Here I thought a boggan was something like a mix between a troll and a leprechaun.

Synonym for yatz - an unintelligent and disliked person, esp. when a member of a subculture such as hip-hop or redneck.
I wasn't really sure what it meant, it just had a nice alliterative quality to it. I might have meant yutz, but wasn't sure if that was right either.

Besides:

Definitions of yatz on the Web:

* Kiai is a compound of "ki" meaning mind, will, turn-of-mind, spirit... and "ai" being the contraction of the verb "awasu", signifying "to unite". In bujitsu (or the Japanese art of war), it is usually linked to the inner amassing of energy released in a single explosive focus of will, shout, or in one legend a "stare" in which a samurai froze a pack of wolves in their tracks by simply glaring at them. Modern karate refers to the shout that accompanies some kata as "kiai". ...

Korean martial arts may call this sound a Yatz or Kihap.
en.wikipedia.org/wiki/Yatz



Oh yeah, it was yutz I really meant:

2. yutz link send redefine
krusty the clowns version of Putz, you yutz
" its a towel you yutz"

So is boggan someone who comes from a bog or is it an abbreviation of bogeyman?

I'm sorry, but I can't really imagine a cross between a leprechaun and a troll. Maybe someone in Ireland painted their bridge like a rainbow and was surprised at the results, but I doubt it.

Definitions of boggan on the Web:

* Boggans are one of the common kiths in Changeling The Dreaming a role playing game by White Wolf Game Studios. Boggans are very similar in appearance and attitude to Hobbits. They are happy helping types. They claim to be the result of mortals wishing for extra hands to help around the house. They prefer comfort over fancy things and tend to be plump and short with bushy hair and eyebrows. ...
en.wikipedia.org/wiki/Boggan_(Changeling)

One of my favorite perjoratives is: Bogtrotter

Don't forget that one of the europan's trolls version is like 10 to 20 cm in heigth and look very much the same as an man with a white bore and often wear a pointed's red hat (this version is also called a gnome in some part of europa).

Eridalafar

Yatz and bogan are current slang as listed in urbandictionary.com and other places. I didn't know that yatz was also synonymous with kiai.

I wonder what my karate instructor would have done if I had shouted yatz during a bout. Kicked me harder, perhaps? :)

LOL! I can imagine a way to pronounce it that sounds pretty good... Yeee-atzzzzssssss.

Yatzee!