Legal group sues Cheney for fraud

A LEGAL watchdog group said yesterday that it was suing Vice-President Dick Cheney and Halliburton Co, the oil services company he ran for five years, alleging fraudulent accounting practices at the company.

The lawsuit by Washington-based Judicial Watch alleges that the accounting fraud led to shareholder losses, claiming Halliburton overstated revenues by $445m from 1999 to the end of 2001.

"Halliburton overstated profits that many American citizens relied upon. That's fraudulent security practices and it resulted in those Americans suffering huge losses," said Larry Klayman, chairman and general counsel of Judicial Watch.

Judicial Watch announced the lawsuit at a news conference and said it had been filed in the US District Court in Dallas. However, court officials in Dallas said yesterday morning the suit had not yet been received.

Asked about the suit yesterday, White House press secretary Ari Fleischer said he talked to the vice-president's staff and "they believe the suit is without merit and that's where it stands."

Cheney was chairman and chief executive of the oil field-services giant from 1995 to 2000. Halliburton announced on May 28 that it received notice from the Securities and Exchange Commission that the commission was looking into Halliburton's accounting methods adopted in 1998 for reporting cost overruns on construction jobs.

The SEC has not filed any charges against Halliburton.

Judicial Watch alleges those accounting practices resulted in overvaluation of Halliburton's shares, deceiving investors.

The suit names Cheney, Halliburton and accounting firm Andersen Worldwide and Arthur Andersen LLP. Thirteen Halliburton board members and Terrence Edward Hatchett of Arthur Andersen, the accounting firm's former managing partner for North America, also are named in the suit.

Andersen spokesman Patrick Dorton declined to comment.

Judicial Watch, which describes itself as a non-partisan group, has also sued for access to records of the Cheney-led energy task force that drafted the Bush administration's energy policy.

The suit against Cheney comes the day after President Bush called for tougher penalties to fight the corporate corruption that has engulfed several high-profile companies in recent months.