A Congressional Research Service report released yesterday concluded that federal ethics laws treat Vice President Cheney's annual deferred compensation checks and unexercised stock options as continuing financial interests in the Halliburton Co.
Democrats have aggressively challenged Cheney's claim that he has no financial ties to Halliburton, despite those arrangements.
The Houston-based energy conglomerate has been awarded more than $ 2 billion in contracts for rebuilding Iraq, including one worth $ 1.22 billion that was awarded on a noncompetitive basis.
The report, from the law division of the congressional research arm of the Library of Congress, said deferred salary or compensation received from a private corporation -- as well as unexercised stock options -- may represent a continuing financial interest as defined by federal ethics laws.
The seven-page report, dated Monday, did not name Cheney or Halliburton, but addressed the general legal question. It was prepared at the request of Sen. Frank Lautenberg (D-N.J.), who said Cheney should "stop dodging the issue with legalese, and acknowledge his continued financial ties with Halliburton to the American people."
Cheney, who was Halliburton's chairman and chief executive, has disclosed the payments and the 433,333 options. The report suggests no illegality.
Catherine Martin, Cheney's public affairs director, said: "The vice president has no financial interest in Halliburton. He has no stake in the company. He will in no way benefit from the rise or fall of Halliburton's stock price or the success or failure of the company."
Cheney said on NBC's "Meet the Press" on Sept. 14 that he has "no financial interest in Halliburton of any kind and haven't had now for over three years." His assertion came during a discussion of Halliburton's contracts in Iraq. Cheney said he had "severed all my ties with the company, gotten rid of all my financial interests."
Democrats disputed that because Cheney received deferred compensation of $ 147,579 in 2001 and $ 162,392 in 2002, with payments scheduled to continue for three more years.
In response, Cheney's office said he had purchased an insurance policy so he would be paid even if Halliburton failed. And his office also has announced he has agreed to donate the after-tax proceeds from his stock options to three charities.
However, the congressional report said that neither the insurance policy nor the charity designation would change the public official's disclosure obligation.
The continuing controversy over Cheney's statement puts him in the position of drawing criticism to the White House. In the past, White House officials have considered him a reassuring figure for viewers and voters.
Bush issued what amounted to a correction of another statement Cheney made on "Meet the Press." When asked about the possibility of a connection between former Iraqi president Saddam Hussein and the attacks of Sept. 11, 2001, Cheney said, "We don't know." Three days later, Bush said in response to a question that the government has no evidence of such a link.
The liberal group American Family Voices has spent more than $ 300,000 to run ads about Halliburton's connection to the administration. The group said the commercials are effective for raising money. The ads -- on cable in Washington and on broadcast television in New Hampshire and battleground states of the Midwest -- began last week and will run for at least another week, the group said.