Wednesday, May 22, 2002

Under Cheney, Halliburton Altered Policy on Accounting
…the Halliburton Corporation altered its accounting policies so it could report as revenue more than $100 million in disputed costs on big construction projects, public filings by the company show. Halliburton did not disclose the change to investors for over a year.

At the time of the change — which was approved by Arthur Andersen, the company's auditor at the time — Halliburton was suffering big losses on some of its long-term contracts, according to the filings. Its stock had slumped because of a recession in the oil industry. Two former executives of Dresser Industries, which merged with Halliburton in 1998, said that they concluded after the merger that Halliburton had instituted aggressive accounting practices to obscure its losses.

Much of Halliburton's business comes from big construction projects, like natural gas processing plants, which sometimes run over budget. With the policy change, Halliburton began to book revenue on the assumption that its customers would pay at least part of the cost overruns, although they remained in dispute. Before 1998, the company had been more conservative, reporting revenue from overruns only after settling with its customers.

As chief executive, Mr. Cheney had final responsibility for Halliburton's books. But the company's chief financial officer, Doug Foshee, said yesterday that he could not imagine that Mr. Cheney had specifically approved the change, which he called a routine decision dictated by a shift in Halliburton's business mix.
http://www.nytimes.com/2002/05/22/business/22HALL.html?todaysheadlines

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