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CAMPAIGN 2000

Cheney Says He'd Forfeit Stock Options if Elected

Politics: GOP candidate contends that he would seek to avoid any appearance of a conflict of interest.

September 02, 2000|MEGAN GARVEY | TIMES STAFF WRITER

Dick Cheney, the Republican vice presidential nominee, said Friday that he would give up millions of dollars worth of stock options if he and George W. Bush win the White House this fall.

"In order to avoid even the appearance of a conflict of interest," said Cheney in a statement, "I am fully prepared to forfeit any options that have not vested by the time I assume office."

The decision comes after Cheney fielded criticism over the terms of an early retirement package from the Dallas-based oil company, where he served as chief executive officer for five years. Cheney left Halliburton Inc. with a package of stocks and stock options worth nearly $34 million after agreeing to be Texas Gov. Bush's running mate.

Part of the compensation is in stock options estimated to be worth $6 million. A significant share of those options, now valued at $3.6 million, cannot be exercised for three years, well into Cheney's tenure as vice president should the Republicans win.

After the terms became public two weeks ago, Cheney appeared reluctant to forgo the stock options, even though he had been criticized for holding on to them when their value could be affected by decisions made by a Bush administration.

An option allows a person to buy stock at a preset price. If the stock rises above that price, the owner makes money. Companies often grant stock options to executives as a performance incentive.

Some who regularly look into political finances and ethics said Cheney's vow to give up the options if he is elected is too little too late because the conflict already exists.

Peter Eisner, managing director of the Center for Public Integrity, a nonpartisan, nonprofit watchdog group, said Cheney's decision to hold on to the options for now was one of the "most blatant cases" of conflict of interest he has seen.

"The idea of maintaining the options throughout the campaign and only forgoing the options should he win is quite odd," Eisner said. "He's already made tens of millions of dollars from retirement, and he's done it because of the revolving door between government and private business, and now he's trying to have it both ways."

And Eisner said he believes Halliburton could potentially benefit now from a close relationship with a vice presidential candidate.

Cheney spokesman Dirk Vande Beek rejected Eisner's assertion, calling Cheney "a man of integrity who has always lived by the highest moral and ethical standards."

The controversy over the retirement package opened the door for Democrat Al Gore's presidential campaign to renew criticism of Cheney and the close ties both he and Bush have to big business.

"Cheney got his hand caught in the cookie jar, and now, far too late, he's trying to put a half-eaten cookie back in the jar," said Gore communications director Mark D. Fabiani. "People won't be fooled by this last-ditch and desperate attempt to separate the Bush-Cheney ticket from Big Oil."

But Cheney's aides say he had always vowed to "do the right thing" and has been advised by legal and financial experts who worked closely with the Office of Government Ethics and the Internal Revenue Service. Vande Beek called Fabiani's comments "nonsense."

"Secretary Cheney said all along when the issue first came up that he would do what he needed to do to avoid conflict of interest," said Vande Beek, who also worked with Cheney when he was at Halliburton.

Cheney's promise to relinquish the options if he is elected came on the same day he and his wife, Lynne, filed detailed financial statements with the Federal Election Commission showing they had earned about $22 million in the last decade.

Figures released by the Bush-Cheney campaign showed the Cheneys' financial situation dramatically improving in the years after he left public service. Cheney served as Wyoming's sole congressman for 10 years before leaving in 1989 to be Defense secretary under President Bush.

In 1992, his last full year as Defense secretary, the couple made $258,394. Last year, the Cheneys reported more than $4.4 million in income to the IRS.

Cheney said Friday that if he is elected he plans to establish a blind trust for his assets before being sworn in on Jan. 20, 2001. Such trusts are often set up by elected officials to avoid conflicts of interest between their personal finances and political actions.

Cheney's reluctance to give up the stock options has been apparent. In Oregon last week, he said he was exploring a "process of puts and calls" that he had read about in the Wall Street Journal. He said it might "allow me to insulate myself from having any financial interest in what happened to the price of Halliburton stock."

But he was adamant when asked whether he might give up the options before the election.

"Of course not," he said. "I don't have any conflict until I get sworn into office."

Last Sunday, Cheney again expressed his hope to keep as much of his Halliburton pay package as possible.

"Well, I'd like not to have to give away all my assets in order to serve in public," he said on the CBS show "Face the Nation." "I don't think that's required, and shouldn't be. But, as I say, we'll do whatever is necessary. We're looking at various possibilities."

Cheney's decision to forfeit the stock options if he wins may have been on his mind Thursday when he was campaigning in Fort Lauderdale, Fla. Asked by a 6-year-old student if he had "lots of money," Cheney said: "Not as much as I did before I got back into politics."

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Times staff writers Michael Finnegan and James Gerstenzang contributed to this story.

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