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Halliburton's Rising Cost for Bush

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  • Halliburton's Rising Cost for Bush

    In a normal political season, President George W. Bush could tough out the string of embarrassing charges of war profiteering and bribes emanating from Halliburton (HAL ), where Vice-President Dick Cheney used to hang his hat. But as Democrats more or less unite behind Senator John Kerry (D-Mass.), they're getting the better of Bush on issues ranging from missing Iraqi weapons to missing American jobs. With the 2004 election looking to be as tight as 2000's cliffhanger, the drip-drip-drip of Halliburton charges threatens to erode one of the President's greatest strengths: Character and credibility.

    Asked whether Bush is a leader they can trust, a stunning 61% of independent voters said they had "doubts and reservations" in a Feb. 5-6 CNN-Time poll. In a sharply polarized electorate, swing voters could hold the keys to the White House -- and Halliburton "could have enough appeal as a wedge issue to swing a few votes," says independent pollster John Zogby.

    A CLOUD OF DOUBTS. Questions about Halliburton are piling up rapidly -- and they won't go away soon. The Pentagon Inspector General has asked the Defense Criminal Investigative Service to probe allegations by Representatives Henry Waxman (D-Calif.) and John Dingell (D-Mich.) that the outfit inflated the price of fuel it supplied in war-torn Iraq.

    Also under scrutiny: Allegations that Halliburton overcharged for meals at a base in Kuwait and might have wildly overstated estimated costs for food services in Iraq. On Feb. 16, Halliburton announced that it was holding on to subcontractors' bills totaling $174.5 million until the amounts it should bill Uncle Sam are resolved. "We did this to take the issue off the table from a political standpoint," says Wendy Hall, Halliburton's director of public relations in an e-mail.

    Separately, Halliburton has acknowledged that employees took $6.3 million in kickbacks from a Kuwaiti subcontractor. And the Justice Dept., Securities & Exchange Commission, and French authorities are probing accusations that a Halliburton joint venture paid $180 million in bribes in connection with a Nigerian natural gas plant in the 1990s -- while Cheney was Halliburton's CEO.


    Mr. G