Vice (18 page)

Once ILSA became law, Cheney lobbied a friend, Texas senator
Phil Gramm
, for a waiver for Halliburton so it could work in Iran, even as the federal government investigated the company. In October 1997, Halliburton Energy Services reached a $15,000 settlement with the
Department of Commerce
over charges that it had violated the
U.S. Export Administration Act
fifteen times between 1993 and 1994 involving transactions with Iran. As part of the agreement, the company admitted to no wrongdoing. While the violations had occurred prior to Cheney's tenure at the company, he wanted to avoid such settlements in the future.

At the 1998 Cato Institute conference, Cheney devoted much of his speech to Iran. "American firms are prohibited from dealing with
Iran and
find themselves cut out of the action, both in terms of opportunities that develop with respect to Iran itself, and also with respect to our ability to gain access to Caspian resources," he complained. "Iran is not punished by this decision. There are numerous oil and gas development companies from other countries that are now aggressively pursuing opportunities to develop those resources."

Having failed to change the Iran sanctions, Halliburton decided to work around them. The U.S. prohibition included a loophole that allowed foreign subsidiaries of U.S. companies to work in Iran as long as they were completely independent of their parent in America. In early 2000, while Cheney was CEO, a Halliburton subsidiary registered in the
Cayman Islands
opened an office in Tehran. In 2001, the Treasury Department began an investigation into more than $40 million worth of
Halliburton projects in
Iran. The investigation foundered. In 2004, a
60 Minutes
report revealed that the Cayman office was nothing but a letter drop without employees. The subsidiary's actual address in Dubai shared offices and staff with Halliburton. Several months before, citing new leads, a federal grand jury subpoenaed Halliburton for more information about its dealings with Iran. Two years later, the investigation has yet to reach a conclusion—but with Cheney's special interest in Iran dating back to his work with USA Engage, it is unlikely that he wasn't fully aware of Halliburton's work in the country.

One of the few occasions when Cheney said that he agreed with
sanctions
was in connection with
Iraq
after the Gulf War. "I had a firm policy [at Halliburton] that we wouldn't do anything in Iraq, even arrangements that were supposedly legal," he told ABC News during the 2000 campaign.

Well, that wasn't entirely true. While Cheney was CEO of Halliburton, the company's subsidiaries signed $73 million worth of contracts with Iraq. And ironically, the Iraq sanctions regime, codified by the United Nation's
Oil for Food program
, was a textbook case of how not to do an embargo. Halliburton subsidiaries
Dresser-Rand
and
Ingersol Dresser Pump Company
sold spare parts and equipment to Saddam Hussein from 1997 to the summer of 2000 to help rebuild Iraq's oil infrastructure—which Secretary of Defense Dick Cheney had helped destroy. Since Halliburton went through France and complied with Oil for Food, the transactions were technically legal. But by the late nineties it was clear that the U.N. program was thoroughly corrupted. Saddam and his officials skimmed billions from profits destined to pay for medicine and food for ordinary Iraqis. When Cheney was pressed again as vice president about his former company's dealings with Iraq, a spokesperson explained it involved joint ventures in which he had no knowledge.

A year after joining Halliburton, Cheney did a cameo in a promotional video for the firm that handled his company's accounting work. "I get good advice from their people based upon how we're doing business and how we're operating—over and above just sort of the normal by-the-books auditing arrangement," he pitched gamely to the camera.

The promotional video was for Arthur Andersen. It would take another five years before the irony of Cheney's words would be fully evident. By then Enron had imploded, and Andersen, its handmaiden in fraud, was under federal indictment for shredding documents. (The Supreme Court would later overturn Andersen's conviction for obstruction of justice on a technicality, but the decision came too late to save the venerable firm.) Halliburton was Andersen's third biggest client, right behind Enron. Both Andersen and Enron were among the top campaign donors to the Bush-Cheney effort in 2000. By the time evidence of Halliburton's own
accounting irregularities
from that period surfaced, Cheney was already in the White House.

The trouble in this case began in 1997, when Halliburton simultaneously embarked upon several larger-than-usual construction projects throughout the world. The company took on many of these projects on a fixed-price basis, arranging to complete the job based on a set, agreed-upon fee that would cover all costs. The profit from such an arrangement comes from the margin by which the fee exceeds the contractor's expenses. A fixed-price contract can potentially be more lucrative for a contractor, if it can keep expenses down or somehow persuade its customer to pay more. In the past, Halliburton had mainly worked under safer "cost-plus" contracts, under which the company was guaranteed a certain profit regardless of the cost of the job.

Halliburton's
fixed-price projects
didn't work out as planned, and by 1998 the company was looking at more than $100 million in cost overruns. The extra expense couldn't have come at a worse time for Cheney and Halliburton. A recession in the oil industry had depressed an already volatile company stock. Investors had not been as excited about Cheney's deal with Dresser as he had. A one-time $1 billion charge against earnings for costs related to the merger didn't help.

Arthur Andersen offered a quick way to enhance Halliburton's bottom line. Historically, Halliburton would count payment for cost overruns in its financial statements only after the client paid them. Beginning in the second quarter of 1998, the company began to book revenue for cost overruns under the assumption that clients would pay at least some of it in the future. With the stroke of a pen, losses became gains. With the accounting change, for just 1998, Halliburton's pretax income was 46 percent greater than it would have been without the unapproved claims. But shareholders didn't know that. Halliburton didn't disclose this new accounting procedure to investors, even as the revenue it reported from uncollected claims grew from $98 million to $106 million in 2000, numbers first revealed in the March 2000 company report.

After a 2002
New York Times
story raised questions about
Halliburton's
accounting, the
Securities and Exchange Commission
launched an investigation. Cheney's handpicked replacement as CEO,
David Lesar
, who had worked for Arthur Andersen before coming to Halliburton, blamed politics and the media for the SEC investigation. Because the vice president was the company's former CEO, the media were covering Halliburton like a political story, not a business story, Lesar complained in a phone conference with analysts. The SEC disagreed, fining Halliburton $7.5 million and imposing minor fines on two company officials. The agency took no action against Cheney, who cooperated with the investigation.

Cheney's and Lesar's gamblers' affinity for fixed-price projects would lead to one of the future vice president's greatest debacles at Halliburton. Before leaving the company in 2000, Cheney signed a contract for a $2.5 billion fixed-price job for Halliburton to build the infrastructure for the Barracuda and Caratinga oilfields beneath about three thousand feet of water off the coast of
Brazil
. Costs for the project quickly spiraled out of control. By the project's completion in 2004, overruns had cost Halliburton $762 million.

On the presidential campaign trail in 2000, the Brazil disaster, like most of Cheney's Halliburton legacy, remained hidden. When he left the company, its stock price was at a five-year high, having increased 157 percent during his tenure at the company. Its $44 plunge was still two years off. The peak in the stock allowed Cheney to pocket $18.5 million when he exercised his stock options in 2000.

Still, without doubt Cheney had achieved one of the key objectives of his hiring: positioning Halliburton to win
federal contracts
. He did most of the work before even joining the company, as defense secretary in the late eighties, when the Pentagon awarded Halliburton a five-year contract to study how a private company could supply logistical support for troops in various deployment scenarios. Not surprisingly, because Halliburton designed it, Brown & Root won the first
LOGCAP
(Logistics Civil Augmentation Program) contract in the
Balkans
. And while it earned high marks for its work there, questions of cost overruns and poor supervision later surfaced.

Cheney's grand dream of transforming Halliburton into
the
one-stop-shopping place for oil services had proved unattainable. Rather than building on the Dresser merger, Halliburton entered a period of retraction, selling off some of its newly acquired subsidiaries almost immediately. In 2005, Halliburton put its construction division, Kellogg Brown & Root, on the block. Thanks to Cheney, the company had achieved a level of federal contracts that would have been the envy of the Brown brothers. But with it had come death, political liability, and small profit margins.

If the premier power couple in Washington, D.C., are Bill and
Hillary Clinton
, Dick and
Lynne Cheney
come a close second. For more than forty years they've been a team, even serving together in the first Bush administration. Lynne is just as much a partner and counselor to Dick as Hillary was to Bill. Long before the media dubbed David Addington "Cheney's Cheney," Lynne had mat role. Those who know her say she is as ideological as her husband, if not more so, but while Dick has cultivated a gravitas that seductively whispers "calm and ready to govern," Lynne is all about the fight. It's the difference between the solemn pronouncements on
Meet the Press
and the rapid-fire slap-down of CNN's now defunct
Crossfire,
where Lynne was a host for four years. Yet unlike Hillary's effortless slide into public office, it's an open question whether Lynne, who has privately expressed interest in a political run, can escape her husband's shadow.

Lynne didn't always play
second fiddle
. In the beginning, she was the dazzling standout with the promising future, and Dick, the quiet but eager suitor who wasn't quite worthy. Back in Casper, many still believe that Dick would never have made it to the White House without Lynne's
ambition
fueling his ascent. They met for the first time shortly after the Cheney family moved to Casper from Nebraska. Lynne recalls seeing a fourteen-year-old Dick sweeping out the Ben Franklin five-and-dime where he worked after school. Nearly half a century later, on the presidential hustings, Dick Cheney would recall those early years. "Lynne talks about knowing me since she was fourteen years old, that's true, but she wouldn't go out with me until she was seventeen," he cracked.

Dick would credit their match to the 1952 victory of
Dwight Eisenhower
. When Ike reorganized the Agriculture Department, Cheney's father, an engineer who worked for the Soil Conservation Service, was transferred to Casper. The Cheney family's move and its consequences for Dick and Lynne's future would become a well-worn campaign joke, with more than a bit of truth. "If it hadn't been for Eisenhower's election victory, Lynne would have married someone else," Cheney would tell the audience, "and then
he'd
be Vice President of the United States."

As teenagers, the two seemed remarkably compatible. They shared similar backgrounds. Both came from north European frontier stock. Civil War veterans and Indian fighters numbered among their ancestors. Lynne's father, Wayne, also worked for the government as an engineer. Both of their mothers were strong, independent women in the western mode. Lynne's mother, Edna, was a deputy sheriff (she had a badge, but had clerical, not law enforcement, responsibilities). They loved to read, and logged countless hours at the Carnegie-built public library in Casper. Dick favored military histories. Lynne's scholarly appetites, even then, were more wide-ranging.

"There is nobody else like Dick Cheney, except for Lynne," says John Perry Barlow, who knew the couple years later in Wyoming. "She's like Dick, wicked smart, highly motivated, and, as with Dick, without much empathy."

Natrona County
High School
yearbook pictures of Lynne show a plain and petite blonde, her hair coiffed in Sandra Dee waves. Her face is too asymmetrical to be called pretty, but what sets her apart is a strong chin and full lips fixed in a determined half-smile. It's the face of someone who hungers for something beyond what a small and insular 1950s town in Wyoming can offer.

Lynne was a straight-A student, and in her senior year was elected Mustang Queen, a position chosen by, among others, the football team, of which Cheney was co-captain. He was also senior class president and a desirable catch for any girl—only they were both already attached to others. That abruptly changed when, with the prom only months away, Lynne's beau ended their relationship. At the time, her friend
Joan Frandsen
had been seeing Dick for three and a half years. "She has a real competitive edge, our girl does," Frandsen told the
San Francisco Chronicle
in 2004. "She had to get a boyfriend real quick."

Despite a friendship with Frandsen that dated from the first grade, Lynne made a play for Dick, the boy who seems to have pined for her for years. Cheney promptly dumped Frandsen. The very next day he took Lynne home to his parents for his birthday dinner.

Lynne dominates Casper memories of the couple. An oft-repeated story involves Lynne's victory at the state championship in baton twirling, one of the few competitive sports available to women at the time. The winning routine featured flaming batons. Dick stood in the wings with a coffee can filled with water, ready to douse the ends when Lynne completed her performance.

After high school, the couple maintained a long-distance relationship as college pulled them in opposite directions. Lynne had introduced Dick to
Thomas Stroock
, a Casper oilman and Yale alumnus. Impressed by the young football player, Stroock made a few calls and obtained a scholarship to Yale for Dick. While Lynne had demonstrated more intellectual promise, she had to settle for Colorado College. When Dick
flunked out of Yale
and returned to Wyoming to work as a lineman for the power company, Lynne was none too pleased. The blue-collar life was not the one she had envisioned for herself. It probably didn't help that Dick had started to drink heavily. She refused to marry him unless he sobered up and returned to school. Lynne's prodding—combined with the Vietnam draft—focused Dick and helped persuade him to enroll at the
University of Wyoming
in Laramie. The couple married on August 29, 1964. Lynne was already on her way to a master's degree in English at the University of Colorado. They both moved on to the
University of Wisconsin
to pursue advanced degrees. While Dick opted to shelve his doctorate in political science for the real thing, Lynne finished a weighty dissertation on the influence of Immanuel Kant's philosophy on the Victorian poet Matthew Arnold.

By the time the couple moved to Washington, D.C., they had a young daughter and another on the way. Dick soon fortuitously found a patron in Donald Rumsfeld. As her husband's
career
began its meteoric rise, Lynne was stuck
as a housebound mother
. Homemaker was not a role for which Lynne was suited by either temperament or skill. Dick would later joke that for the first year of their marriage, they would pretend that she could cook, and that he liked it. Once they got over that fiction, he handled all the serious cooking. Lynne had hoped to find work as a college professor, but the opportunity wasn't there. "I got my Ph.D. in 1970 and discovered that I was unemployable," she told Fox News in 2002. "There was a glut on the market that year. And this was before people were enlightened about women, and married women in particular."

Lynne turned to writing in part to escape the boredom of domesticity. To date she has written or co-authored eight books. In many ways, her three forays into fiction are the most interesting, for what they unintentionally reveal about the author. Lynne's first effort,
Executive Privilege,
published in 1979, is perhaps her most remarkable work, not for the writing, which is pedestrian at best, nor the convoluted plot, which some reviewers described in an excess of enthusiasm as "a political thriller." What makes
Executive Privilege
a page-turner in 2006 is how nakedly autobiographical it is. It's obvious that Dick's pillow talk and Lynne's life and fears as a White House widow provided the fodder for her tale.

The tortuous narrative begins with one of Dick Cheney's all-consuming passions: a White House leak. In this case—reminiscent of the tactics of Ford's senior staff—a fictional vice president leaks a week's worth of the daily presidential schedule, hoping that the leak will incite his supporters. The log shows that the president has cut him out of decision-making, in much the same way that Ford, with Cheney's help, marginalized Vice President Nelson Rockefeller. Instead, the media seize on details in the log involving the president's daily meetings with an adviser who is a psychiatrist. Is President Zern Jenner scheduling therapy sessions in the Oval Office? He refuses to comment. It turns out the psychiatrist is really a secret envoy to Filipino guerrillas seeking to overthrow Ferdinand Marcos. To reveal the true topic of the meetings would spike the revolution.

The central thesis of the book—that the president needs more latitude to keep affairs of state secret—is vintage Dick Cheney. Lynne is channeling Dick when she has President Jenner muse, "It seems to me that the history of the presidency in the twentieth century is the history of a gradually weakening institution." But the true meat of the book is found in the subplots. They center on the relationship of two couples—and both resemble the Cheneys.

First there are presidential assistant Dale Basinger and his needy wife Marie. Basinger—like Cheney under Ford—is the very picture of a behind-the-scenes faithful presidential counselor. Basinger would never write a "kiss-and-tell" book when his White House days are over. Lynne's fictional Basinger, like her husband, works to keep his outward demeanor "calm and positive," even if it's just a pose in the face of disaster. "So many staffers took their cues from him, and if their spirits were low, the press was sure to pick it up, and it wasn't long then before the stories started about how demoralized the Jenner staff was," Lynne writes.

But while obsessing about his job, Basinger suffers momentary pangs of guilt over abandoning his family for the grind of the White House. If it bothered Basinger, it was a workload under which Dick Cheney thrived. He described a typical day as Ford's chief of staff as beginning with his arrival at the office at 6:30 A.M. and ending with his departure sometime around 10 P.M. During one six-month period in the midst of the presidential campaign, he took off a single Sunday. Cheney didn't find this a problem, as he loved his job. But in an interview at the time he did allow that it could take a toll on a family. "It does apparently affect their personal lives—plus the strain on marriages and so forth," he said. It would be just one of many sacrifices Lynne would make for her husband's career.

Next to secrecy, the strongest plot thread in
Executive Privilege
is infidelity. Marie wonders if Basinger is bedding the First Lady's press secretary. He tries to reassure her, but to no avail. "He knew that his being home so little was part of the problem. And part of it was jealousy. She resented the women he saw at work. She saw them usurping her place in his life, and no amount of arguing could convince her that was not the case."

While Basinger truthfully tells a disbelieving Marie that he's too busy to have an affair, this is not the case for the other workaholic Cheney-like husband in the book, Rudy Dodman. White House correspondent for
Newstime
magazine, Dodman leaves the care of their two-year-old son to his stay-at-home wife, Nancy. She, as Lynne once did, spends her days working on a thesis involving Immanuel Kant. Throughout the book, Rudy is on the verge of straying into the bed of a flirtatious fellow reporter. Nancy, sensing his temptation, muses about how Washington is a place where the power that men amass attracts women. She had already decided that if he slept with another woman, she'd leave him. "There was a basic standard of honesty that had to be met in a relationship, if it was to have any meaning at all."

When queried by a reporter in Rawlins, Wyoming, about whether her husband supported the idea of her writing
Executive Privilege,
Lynne responded that it wasn't a question of asking permission; it was more like a consultation.

The most notorious of Lynne's fictional books is the 1981 novel
Sisters.
Written in prose that manages to be both stilted and overwrought,
Sisters
follows its heroine through a gritty frontier west. During the 2004 campaign, much was made of the breathy and positive treatment of
lesbianism
in the book. In an attempt to capitalize on the attention, New American Library, which owns the rights, wanted to reissue the now out-of-print novel. Cheney family lawyer and literary agent
Robert Bennett
called the publisher to request that it reconsider. It seems Lynne didn't think it was her best work. New American Library shelved the reprint. Nonetheless, several websites have made it available online. By excerpting the racier passages, they save the curious from the drudgery of having to read the entire book. In truth, the sex scenes in the novel are fairly tame. But the acceptance of
homosexuality
they evince contrasts sharply with the way, in public, Lynne handled the lesbianism of her youngest daughter, Mary.

Mary says that when she came out in junior high, her parents accepted her unconditionally. (This didn't stop Congressman Cheney from compiling an anti-gay voting record during this period.) As an adult, Mary was not only living openly as a lesbian, but also using her homosexuality as a professional selling point. She took a job with the Coors Brewing Company to help one of the radical right's deepest pockets market itself to homosexuals and other niche markets. A year before the 2000 campaign, she told the lesbian magazine
Girlfriends
that she went to work at Coors "because I knew other lesbians who were very happy there."

Yet in Lynne's first major interview of the 2000 presidential campaign, when ABC's
Cokie Roberts
addressed Mary's open lesbian life, Mary's mother took umbrage. Embracing a gay family member, instead of trying to convert her to heterosexuality, Family-Research-Council-style, would have offended a conservative Christian Republican base that was unaware of her daughter's sexual orientation. "Mary has never declared such a thing," Cheney snapped. "And I'm surprised, Cokie, that you even would want to bring that up."

The outburst served its purpose, cowing most of the media into avoiding the topic for the rest of the campaign. Not surprisingly, Mary's homosexuality returned as an issue in 2004. This time Mary was earning a six-figure salary running her father's reelection campaign. Despite her active campaign role, Mary seldom appeared with her longtime partner,
Headier Poe
, at events that involved the GOP base. Gay and lesbian activists, incensed by the Republican Party's use of same-sex marriage as a wedge issue, tried to force Mary out of her stealth lesbianism. They started a website,
dearmary.com
, where more than twenty thousand visitors wrote her letters, most imploring her to use her position to make a statement. The site featured Mary's likeness on a milk carton, to underscore her disappearing act. But Mary remained silent, and so did her parents. There was no public outrage from the Cheneys, even when members of their own party, like
Alan Keyes
, attacked Mary as "a selfish hedonist" or offered to pray for her soul.