Demagogue

I'm one day late on this because I'm not an regular reader of the Washington Post's business section. But a friend clued me in to this excellent article by Allan Sloan, demonstrating that Dick Cheney's foreign policy instincts ("no doubt" about WMDs) are equally as lacking as his business instincts:

It's time for yet another Halliburton story -- but not the one you may be expecting. This isn't about the endlessly scrutinized Iraq contracting business of the big energy services company that Dick Cheney ran before he became vice president. And it's not about Halliburton's profit-boosting accounting change during Cheney's regime, or the scandals and problems currently affecting some of the firm's far-flung projects.

Instead, let's talk about Halliburton's well-executed $5 billion escape from its asbestos problems, most of which Cheney created when he orchestrated Halliburton's purchase of Dresser Industries in 1998.

Few people connect this problem with Cheney, but they should, given that he was in charge at the time and got a raise as a result of buying Dresser.

Dresser's asbestos problem was only a potential one when Halliburton bought it, but rapidly metastasized into a threat to Halliburton's existence. By then, though, Cheney had gone off to Washington.

Had he still been Halliburton's chief executive, Wall Street might have forced him to take responsibility for the asbestos problem he imported to his company. But because he wasn't around -- and because his successor, Dave Lesar, was a stand-up guy -- Cheney has largely escaped scrutiny for this fiasco.

Now that Halliburton has managed to extract itself from its asbestos liability by paying a ton of cash and stock to trusts that will compensate victims and their lawyers, we can get a handle on how much Dresser's piece of the problem cost Halliburton. It turns out to be almost as much as Halliburton paid for the company.

... I give Halliburton's current management huge credit for pulling off this tricky maneuver. And I give them big credit for dealing with the problem rather than awaiting a miracle rescue from Congress.

Almost from the day it took office, the Bush administration has pushed hard to get Congress to limit asbestos liability. That includes President Bush's visit to Illinois last week to push his "reform" proposals.

Halliburton, whose fortunes are tied to the oil industry, has profited from the surge in oil prices. Even though its stock has quadrupled from its asbestos-woe low, it's still below what it was when Cheney left in the summer of 2000.

Imagine what Halliburton shares would fetch today had the Dresser problems never happened. Much more than it currently sells for, I'm sure.