The Crooks in the White House

This is exciting. Will Dick Cheney keel over from his fifth heart attack before he becomes the first veep since Spiro Agnew to resign in the face of charges of financial crookery? Or will Bush fire him to divert attention from his own scummy past? n Over the weekend President Dumbo poked his head above the rubble of the WorldCom scandal and made a stand: "No violation of the public’s trust will be tolerated... Executives who commit fraud will face financial penalties and, when they are guilty of criminal wrongdoing, they will face jail time."

Sunday morning brought more ringing pledges to protect the public weal: "If anybody violates the law, we go after them," SEC chairman Harvey Pitt told Sam Donaldson on ABC’s This Week. In an earlier incarnation Pitt was one of the guys who successfully lobbied the SEC to make it easier for Arthur Andersen and the other big accounting firms to cook the books on behalf of Enron, MCI/WorldCom and others. Bush, flush with campaign contributions from Enron and MCI/WorldCom ($100,000 last summer), duly signaled his gratitude by putting Pitt in charge of the SEC, where he put the agency in snooze mode amid a ripening cloud of scandal involving the biggest names in corporate America.

But even Pitt couldn’t choke off the investigation into Halliburton, one of the largest oil service companies in the world, headed until July 2000 by Cheney, who was the company’s CEO. The SEC is probing whether Halliburton reported more than $100 million of disputed costs on big oil contracts as revenues so that it could prop up its profits while negotiating a merger with a rival. These accounting shenanigans took place in 1998 on Cheney’s watch, and yes, the accounting firm was Arthur Andersen. Noting Bush’s promise that CEOs who have mismanaged their companies in some fraudulent way will "have to pay," Donaldson asked Pitt, "Will that be the case in Halliburton if you find wrongdoing under Mr. Cheney’s reign?" Quivering with integrity, Pitt bravely declared, "I head an independent regulatory agency. We don’t give anyone a pass."

What else could he say? Up till now the Halliburton scandal has been rumbling along, just under the radar. But now it’s nearing Critical Mass. It may not be long, too, before Dick Cheney announces that on doctor’s orders, and the better to deal with these outrageous accusations of chicanery, he’s stepping down, which is–if you believe friends of Tom Ridge in Philadelphia–what Cheney was planning to do before 9/11, making way for the former Pennsylvania governor.

Of course, anyone with a memory longer than the day before yesterday would have doubled over with laughter at the spectacle of Bush calling for jail time for corporate crooks. Remember Spectrum? Back in 1986 George W. Bush’s oil company, Spectrum, was about to go belly up, until kind friends folded it into Harken Energy. Various accounts, including the Daily Enron site (www.dailyenron.com), narrate that, from being on the threshold of the debtors’ prison, Bush suddenly had $500,000 worth of Harken stock, an $80,000-a-year salary and a stock option arrangement that allowed him to buy Harken stock at 40 percent below market value. Bush made more than a million off Harken, even though the company itself lost a ton of money.

Sound familiar? Here’s more, culled from the Daily Enron site. Bush also borrowed $180,375 from the company–a loan that was later "forgiven," in accordance with Christ’s instructions on the subject of sinners. (In 1989 and 1990 alone–according to the company’s Securities and Exchange Commission filing–Harken’s board "forgave" $341,000 in loans to its executives.)

Sure, this is old stuff, just like Whitewater. Now it’s spring 1990. Iraq is menacing Kuwait and thereby casting a shadow over Harken Energy’s only pending contract, a drilling project in Bahrain. Harken’s Smith Barney financial advisers have just issued a bleak assessment of the company’s position and future. Harken sets up a "restructuring board" and Bush is on it. In June 1990, claiming ignorance of Harken’s desperate plight and the Smith Barney report, Bush sells his 212,140 shares of Harken Energy, banking $848,560.

The sale falls under the SEC’s insider stock sale rule requiring almost immediate formal notice, but Bush does not report the sale until seven months later. At the time the SEC is headed by George H.W. Bush’s appointee, Richard Breeden. W sold his Harken stock less than 30 days after his father’s national security adviser, Brent Scowcroft, sent the President a secret memo warning that hostilities between Iraq and Kuwait were likely.

As Daily Enron asks, "Did dad share this information with his son? If so, W. Bush traded on ‘non-public’ information of an extraordinary nature indeed."

Sure enough, two months after W made his killing, the shit hit the fan in the Gulf, and Harken’s shares went south, losing 25 percent of their value the day Saddam sent his troops into Kuwait. If Bush hadn’t bailed out he’d have lost nearly $250,000. And they talk about this man restoring "trust" in the White House?