Cheney aide rejects Halliburton questions
From John King
WASHINGTON (CNN) -- Vice President Dick Cheney's office Tuesday dismissed as "a political cheap shot" new Democratic questions about his financial stake in the energy services giant Halliburton, which has received lucrative contracts in postwar Iraq.
"He doesn't have a financial interest in the company," a top Cheney aide told CNN.
His comment came after two Democratic senators suggested Cheney gave misleading answers when he said Sunday on NBC's "Meet the Press" that: "I have no financial interest in Halliburton of any kind and haven't had, now, for over three years."
Senate Minority Leader Tom Daschle issued a statement Tuesday saying Cheney has "to clarify this discrepancy of no financial interest."
Sen. Frank Lautenberg, D-New Jersey, said Cheney's financial disclosure forms show that he continues to receive deferred salary from the company and therefore has a stake in whether the company stays profitable.
Cheney's office said that to avoid any such questions and any suggestion that Cheney would have a stake in Halliburton's continued success, he bought an insurance policy back in 2001 -- at a cost to him of $15,000 -- to guarantee that he would receive his deferred salary regardless of whether Halliburton stayed in business.
Cheney is expected to receive three more installments of his deferred salary -- in 2003, 2004 and 2005.
Over the past two years his deferred payments totaled roughly $368,000. The aide said the insurance policy would pay Cheney $140,000 a year for five years if Halliburton went insolvent and was unable to pay Cheney's deferred salary.
In strict accounting terms, Cheney's claim that he has no financial interest in the company is accurate, said certified public accountant Doug Stives of the Curchin Group in Redbank, New Jersey, who has handled similar executive pay arrangements.
Cheney's arrangement with with Halliburton to take his 1999 salary over a period of five years is called a "nonqualified plan," which stands in sharp contrast to a 401K plan or a pension, which is a "qualified" plan.
"Assuming he has divested himself of all stock holdings in the company," Stives said, "it is accurate for Cheney to say he has no financial interest in Halliburton."
The aide said Cheney elected in 1998 -- two years before he became the head of the Bush campaign's vice presidential search committee -- to defer his 1999 salary.
Cheney had to choose then whether to take it in one lump payment or in a series of annual payments -- and he elected to receive it over a period of years.
"Once you make the election you cannot change it," the Cheney aide said. "He had no knowledge at the time he would be a vice presidential candidate or that he might be going back into the government."
Lautenberg also listed Halliburton stock options that are shown on Cheney's financial disclosure form -- some 233,000 shares in all that vest between 2007 and 2009.
The Cheney aide said that on January 18, 2001 -- just before being sworn in as vice president -- Cheney assigned all of his Halliburton stock options to a charitable trust.
"He legally and irrevocably assigned them and he receives no tax benefit from them," the Cheney aide said. This aide said the trustee of the trust decides when to sell them.
Lautenberg, in a statement, renewed a call for the Senate Government Affairs Committee to hold hearings on government contracts with Halliburton and said to everyday Americans that Cheney's statement would not make sense.
"If you ask everyday Americans if someone has a financial stake in a company that provides them with annual compensation, I am certain they would answer, 'yes.' "
CNNfn Correspondent Louise Schiavone in Washington contributed to this report.