CyberAlert -- 07/22/2002 -- Stock Market Fall: Cheney's Fault

Stock Market Fall: Cheney's Fault; Russert vs. Hume on Impact of Sarbanes Bill; Hunt: "Reckless Tax Cut"; Koppel as "Smartass"

1) It's Dick Cheney's fault. He personally caused the stock market decline. At least according to reporter Joie Chen, who declared on Saturday's CBS Evening News: "In Houston, Hartford, Macon Georgia, anxious small investors pin the blame for the falling stock market on Mr. Cheney." Chen then backed her claim with a soundbite from a man who was part or an organized protest, who charged: "The Golden Years are no longer golden because of the Cheneys of the world."

2) Russert versus Hume. NBC's Tim Russert assumed that the Sarbanes corporate regulatory bill must be passed "as soon as possible so that the markets will be reassured" and "investors will be reassured," while Fox's Brit Hume mocked the very notion that people are sitting at home deciding on whether to invest or not based on the passage of the Sarbanes bill.

3) Al Hunt obsessed with condemning Bush's tax cut: "Most of the fundamentals are sound, with the exception of the fiscal situation a few years out, because of that reckless tax cut for the wealthy."

4) Nightline reporters conceded President Bush's Harken stock sale was long ago investigated and Vice President Cheney's actions at Halliburton violated no laws, but, nonetheless, the ABC reporters stressed how the cases are legitimately causing trouble for Bush. Chris Bury concluded: "The President is correct to say that's all old news, but his past is problematic precisely because the old stories make his new concerns about corporate shenanigans such a hard sell." On the Cheney front, Linda Douglass decided: "For the President, the timing could not be worse, as he tries to make the case that he will rid the country of corporate criminals."

5) Ted Koppel, appearing on CBS's Late Show with David Letterman, on himself: "So much for the smartass news anchor."

1

Dick Cheney caused the stock market decline? Yes indeed, according to CBS reporter Joie Chen, who declared on Saturday's CBS Evening News: "In Houston, Hartford, Macon Georgia, anxious small investors pin the blame for the falling stock market on Mr. Cheney." Chen, who jumped to CBS from CNN just a few months ago, then corroborated her claim with a soundbite from one old man who charged: "The Golden Years are no longer golden because of the Cheneys of the world."

Without identifying the organizers of the little protest, Chen proceeded to assert that the money Cheney brings in at fundraisers is "usually from corporate big-wigs," before she featured a clip of Hotline's Craig Crawford maintaining that Cheney "has become the poster child for corporate abuse." How the money Cheney raises is any more from "corporate big wigs" than money brought in at fundraisers headlined by any other prominent official of either party, she did not say.

It's all Cheney's fault. CBS's Joie Chen: "Anxious small investors pin the blame for the falling stock market on Mr. Cheney."

Anchor Sharyl Attkisson set up the July 20 story by insisting "questions abound about the Vice President's own past business dealings. Joie Chen has more about the cloud that's following Dick Cheney."

Over video of maybe a dozen people in Macon Georgia walking around carrying signs reading things such as "Make Love, Not Fraud," "Cheney Come Clean," "Full Cheney Investigation" and a couple of people in striped jailhouse outfits with "Free Cheney" signs, Chen began her piece:
"No big crowds of protesters, but as the Vice President stumped for Republicans this week he repeatedly face the kind of welcome that can make congressional candidates nervous. In Houston, Hartford, Macon Georgia, anxious small investors pin the blame for the falling stock market on Mr. Cheney."
An old man, who was holding a sign out of camera range, maintained: "The Golden Years are no longer golden because of the Cheneys of the world."
Chen continued: "Kept away from reporter's questions, the Vice President remains a big draw at Republican fundraisers. He's made nearly fifty appearances so far this year, raising millions of dollars, usually from corporate big-wigs. His busy schedule though could change as the fall elections get closer."
Craig Crawford, Hotline: "If what Republicans say privately is true, we are not going to see Dick Cheney campaigning as much in this election because he has become the poster child for corporate abuse."

More like the "poster child" for a few liberal activists whom Chen treated as average "small investors."

2

Two contrasting views of the role of the federal government expressed on Sunday interview shows. NBC's Tim Russert assumed on Meet the Press that the Sarbanes corporate regulatory bill must be passed "as soon as possible so that the markets will be reassured" and "investors will be reassured," while Fox's Brit Hume mocked the very notion that people are sitting at home deciding on whether to invest or not based on the passage of the Sarbanes bill. He even suggested on Fox News Sunday "that most people would not be cheered by" knowledge that the "re-regulation" bill will become law.

Russert wrapped up a July 21 interview with House Majority Leader Dick Armey by inquiring: "Will Republicans embrace much of the Sarbanes bill on accountability and reform in corporate America as soon as possible so that the markets will be reassured, the investors will be reassured and that those who violated laws will go to prison?"

Over on Fox News Sunday, however, Hume mocked the premise assumed by Russert. In a panel segment after an interview with Fox News Channel business anchor Neil Cavuto, Hume proposed:
"Put yourself in the position or an ordinary person, retail investor or someone with money in the stock market, and you're sitting at home. Can you picture this conversation? 'Hey Martha, guess what? Senator Sarbanes is writing new regulations for the stock market, the Senate Democrats are going to pass them and the President says he'll sign whatever they send him.' Is that a signal to buy or sell? My guess is that most people would not be cheered by that news. Put in that perspective, I think Neil's right on the money here, that this re-regulation, these people are arriving at this fire long after the building has burned down and say 'well we're going to fix this.' Well, the heck they are."

3

All is well with the economy, except for "the fiscal situation a few years out," Al Hunt argued on CNN's Capital Gang, "because of that reckless tax cut for the wealthy."

On the July 20 show, Wall Street Journal Executive Washington Editor Al Hunt offered his assessment of the stock market situation, but showed he's obsessed with Bush's tax cut: "What we have is a crisis of confidence here. And I think it's a crisis that ignores the fact that most of the fundamentals are sound, with the exception of the fiscal situation a few years out, because of that reckless tax cut for the wealthy. But other than that, you know, they're pretty sound fundamentals, which Chairman Greenspan made clear."

4

Nightline reporters conceded President Bush's Harken stock sale is old news which was long ago investigated and Vice President Cheney's actions as Chairman of Halliburton violated no laws, but, nonetheless, MRC analyst Jessica Anderson observed, the ABC reporters stressed how the cases are legitimately causing trouble for the Bush administration.

Chris Bury concluded a piece about Bush and Harken by declaring that Bush can never be credible on corporate reform: "The President is correct to say that's all old news, but his past is problematic precisely because the old stories make his new concerns about corporate shenanigans such a hard sell."

By that logic no politician can ever propose or support any law impacting something he or she did years ago.

If it weren't for his stake in Harken, Bury suggested, Bush would never have become President: "It was his sale of Harken stock that allowed Mr. Bush to buy into the Texas Rangers baseball team, raise his public profile, run for Governor, and, well, the rest is history."

Up next, Linda Douglass looked at Dick Cheney. Douglass decided: "For the President, the timing could not be worse, as he tries to make the case that he will rid the country of corporate criminals." She concluded: "Democrats in Congress say even if Mr. Cheney is cleared by the SEC, they just might have to investigate him themselves just in time for this fall's elections."

Douglass treated the "watchdog group" Judicial Watch as an expert source, running multiple soundbites from its President Larry Klayman. How Douglass described it: "A watchdog group representing shareholders is one of at least six groups suing Halliburton and Mr. Cheney for fraud."

Following the two taped pieces, anchor Ted Koppel asserted: "Even if nothing illegal is ever identified in either the Halliburton or the Harken cases, the Bush White House will still have to address the political ramifications of these questions."

Koppel set up the July 18 show: "It is in the context of a weak market, an impending election and a growing level of public mistrust about big business in general that questions are being raised, again and again, about the business practices of the President, more than a decade ago, and of the Vice President, just a couple of years ago. Is it politics? You bet. But does that imply that the White House needn't worry? We have a couple of reports beginning with Nightline correspondent Chris Bury on questions surrounding George W. Bush's actions when he was on the board at the Harken Energy Company."

Bury began: "The President's clarion calls for cleaning up corporate corruption have largely received a raspberry from Wall Street which sees more rhetoric than reform."
Peter Jennings, on the July 10 World News Tonight: "Investors are clearly nervous and President Bush has apparently not reassured them."
Bury: "And that rhetoric has run into static, too, from something else: questions about his own business past, questions that clearly annoy the President....Some stories about a Securities and Exchange Commission investigation did surface briefly in previous Bush campaigns, including the 2000 race, but then came the wave of corporate scandals, and reporters returned to SEC documents posted on the Web site of a Washington watchdog group."
Charles Lewis, Center for Public Integrity: "There is hypocrisy. I mean, here he is lecturing Wall Street about corporate responsibility when he himself was with a company that was skating on the edge of propriety."

Bury soon added: "Other questions involve allegations of insider trading. In June 1990, Mr. Bush sold about $850,000 worth of stock. Two months later the company revealed a quarterly loss of $23 million. The stock temporarily tanked. For more than two years, the SEC investigated whether he sold knowing that the company was about to report a huge loss. In the end, the SEC did not take any action. One internal memo says, quote, 'The vast majority of the loss was unknown to management, let alone to Bush,' but other memos take him to task for filing notice of his stock sale 34 weeks late. And over the years, Mr. Bush's explanation for that, technically a violation of the law, have changed."

After some clips of Bush, Bury contended: "The most troublesome item from the President's past may be something called 'The Aloha Deal.' In 1989, Harken Energy sold a big stake in Aloha Petroleum, a chain of gas stations in Hawaii. The buyers? Harken's own chairman, a company director and other investors. They put up only $1 million and gave Harken an IOU for the remaining $11 million, but the company counted its paper profits on the insider deal, profits that were never realized as income. That maneuver, courtesy of none other than the Arthur Andersen accounting firm, allowed Harken to hide $8 million in losses just when the company was struggling....In the case of Aloha, the SEC investigated and, in a rare move, forced the company to restate its earnings, but it did not recommend prosecution. The problem for George W. Bush, he served on Harken's audit committee at the time."

Bury saw a pattern: "The author of a Bush biography, who has also written extensively about his business dealings, describes a pattern of getting ahead through cozy connections and some of the same insider tactics the President now condemns."
Bill Minutaglio, author of First Son, charged: "My pet belief, and I think it's grounded in some good research and reality, is that George W. Bush would not be President of the United States today if not for that starting point of this controversial Harken sale."
Bury agreed: "After all, it was his sale of Harken stock that allowed Mr. Bush to buy into the Texas Rangers baseball team, raise his public profile, run for Governor, and, well, the rest is history. The President is correct to say that's all old news, but his past is problematic precisely because the old stories make his new concerns about corporate shenanigans such a hard sell. This is Chris Bury for Nightline in Washington."

Koppel introduced the next segment: "Vice President Cheney's days as an energy executive have been the focus in recent weeks of multiple lawsuits, a government investigation and an untold amount of newspaper ink."

Linda Douglass explained: "From the start, Dick Cheney has been one of George Bush's biggest assets, a man who has run big things inside the government and out. Mr. Cheney was once a CEO, head of the multibillion dollar energy exploration company Halliburton....But almost two years later, with financial markets reeling from the wave of corporate scandals, the Vice President's past as a corporate chieftain has become a liability. The President has been forced to go out and defend him....It is the Vice President's old job that is the problem. The Securities and Exchange Commission is investigating Halliburton to see if the company used misleading accounting tricks to inflate its profits."
Larry Klayman: "No one is above the law."
Douglass highlighted the lawsuit by a group previously known as "conservative" to reporters: "A watchdog group representing shareholders is one of at least six groups suing Halliburton and Mr. Cheney for fraud."
Klayman: "Dick Cheney was CEO of Halliburton. The buck stops on his desk, in the words of Harry Truman."
Douglass: "When Cheney was at the helm of the oil exploration giant, the company changed the way it calculated its profits. Starting in 1998, Halliburton began counting as revenue money it had not yet collected from clients because the charges were still in dispute. They company's current chief says Cheney, as CEO, was aware of the change."
Klayman: "Rather than booking actual profit, they started to book speculative profit on contracts that were in dispute, that hadn't really come to fruition yet."
Douglass: "The move was approved by the scandal-plagued accounting firm Arthur Andersen. The change allowed Halliburton to add $89 million in revenue to its books....Investors did not learn about the change until March 2000, some 18 months later, when it was disclosed in a footnote buried deep inside the company's 1999 annual report....Some accounting experts say it looks like Halliburton went right up to the line, but may not have crossed it."
John Coffee, Columbia Law School: "I'm not telling you that this was the proper accounting policy to follow. I'm telling you, rather, that it's within the judgmental realm that falls well short of criminal fraud."
Paul Brown, NYU Graduate School of Business: "We might have aggressive reporting to the point that possibly it was misleading, but fraud involves overt actions by egregious partners involved in activities. I don't think that's what is in the case here."
Douglass: "Still, Democrats see a political opening and have pounced. On last Sunday's talk shows they were out in force calling upon the Vice President to start answering questions.... For the President, the timing could not be worse, as he tries to make the case that he will rid the country of corporate criminals."
Coffee: "Oh, I think it does injure their credibility on this issue. The Bush administration, on the issue of corporate governance, is about as compromised as the Clinton administration was on marital fidelity. You both have issues that are going to come home to roost again and again."
Douglass: "Cheney stepped down as the head of Halliburton to join George Bush in the race for the White House in the summer of 2000. He cashed in his stock options for $35 million. Halliburton's fortunes have plunged since Cheney's departure. Cheney himself refuses to discuss the investigation and is staying away from reporters....Judicial Watch's Larry Klayman hopes to make the Vice President testify under oath."
Klayman: "If what Halliburton did was legal, in terms of their accounting principles, then why didn't they make full disclosure to the American public? Why did they hide it from the American public? Where there's smoke, there's fire."
Douglass concluded: "The White House says Klayman's lawsuit is without merit. The Vice President's spokeswoman says she will answer no questions about Halliburton, but Democrats in Congress say even if Mr. Cheney is cleared by the SEC, they just might have to investigate him themselves just in time for this fall's elections. This is Linda Douglass for Nightline in Washington."

Koppel then cautioned in previewing the next segment: "Even if nothing illegal is ever identified in either the Halliburton or the Harken cases, the Bush White House will still have to address the political ramifications of these questions. That conversation when we come back."

Bush and Cheney can't win. If they did something wrong, they cannot now be credible when proposing to outlaw that practice, and if they did nothing wrong then the media treat Democratic political demagoguery as perfectly reasonable and newsworthy in itself.

5

Ted Koppel on himself: "So much for the smartass news anchor."

Koppel appeared on Friday's Late Show with David Letterman, in a show taped Thursday night before the Nightline he anchored about Bush and Cheney's corporate past had even aired (see item #4 above).

He volunteered to participate in Letterman's "Will it float?" segment in which two female models drop an object into a tank of water after Letterman and band leader Paul Shafer guess whether it will float. Friday's object: A 15 pound bag of charcoal. Letterman and Shafer guessed that it would float because of the air in each briquet while Koppel predicted it would sink.

The bag floated, prompting Koppel to offer a self-deprecating quip: "So much for the smartass news anchor."

Now there's something we can all agree upon. -- Brent Baker

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