Halliburton, the Second-Term Curse?

The White House's Halliburton Honeymoon is already history.

Only two days after President Bush declared victory in his quest for a second term, the company once run by Vice President Cheney dropped a political bomb.

In a filing to the Securities and Exchange Commission on Friday, the oil services company said that the Justice Department expanded its investigation into Halliburton, that government probes have found that bribes may have been made in Nigeria and that A. Jack Stanley, a former senior executive, may have been involved.

The latest news about alleged shenanigans at Halliburton, some of which may have occurred on Cheney's watch, serves as a timely warning for the Bush administration: Second terms are often beset by scandal. President Bill Clinton was impeached in the Monica S. Lewinsky affair. President Ronald Reagan endured the Iran-contra scandal. And President Richard M. Nixon had Watergate.

Bush could defy the second-term curse, of course. And, with Congress in friendly hands and with the demise of the independent counsel statute, he has advantages his predecessors did not. But there are several investigations and simmering controversies that were held off until after the election -- and that could present trouble for the president as they resurface.

After last week's drubbing, the president's opponents have begun to seek solace in scandal. "At some point in the next four years there will be a great scandal that will make Watergate look like a fraternity prank," an article on the left-wing Web site Salon predicted yesterday.

That's a bit of a stretch. But there are certainly plenty of thorny matters awaiting resolution: the probe into the leak of a CIA operative's employment; reports and lawsuits stemming from the abuse of prisoners at Abu Ghraib; probes into prewar intelligence in Iraq and the White House's use of it; and FBI investigations into how sensitive intelligence wound up in the hands of Israelis and Iranians.

Even the chief investigator faces investigation. The Justice Department's Public Integrity Section is examining whether Attorney General John D. Ashcroft, when he served in the Senate, violated criminal campaign funding laws or federal disclosure laws relating to the transfer of a mailing list to his campaign committee.

Halliburton gets the prize for being the first to reassert itself since the election. Its SEC filing Friday disclosed more trouble related to investigations by the SEC, Justice, a French magistrate and Nigerian officials into whether a consortium including Halliburton paid $180 million in bribes to Nigerian officials involving a gas plant from 1995 to 2002. Cheney ran the company from 1995 to 2000, and Halliburton bought the unit involved in the consortium in 1998.

That followed by little more than a week the last bad news about Halliburton: that the FBI expanded a probe into charges of contract irregularities by Halliburton in Iraq and Kuwait. Lawyers for a Pentagon official said the FBI requested an interview with her over her complaints that the Army gave a Halliburton unit preferential treatment when granting it a $7 billion contract to restore Iraq's oil fields.

Halliburton also told shareholders that the Justice Department is examining whether operations in Iran by a subsidiary violated U.S. sanctions. The company received a grand jury subpoena in July and produced documents in September.

Also proceeding is special counsel Patrick J. Fitzgerald's probe into the leak of CIA operative Valerie Plame's employment to columnist Robert D. Novak. Novak said his sources were two senior administration officials. According to people involved in the inquiry, Fitzgerald has learned the identity of at least one person who allegedly was involved in leaking Plame's name, but he has not made that information public.

The FBI, for its part, is probing whether Lawrence A. Franklin, a Pentagon official, passed to Israel, by way of a pro-Israel lobbying group, classified intelligence about Iran. That examination follows another FBI probe that began in the spring into Iraqi figure Ahmed Chalabi, a former Pentagon ally who may have compromised U.S. intelligence by leaking sensitive information to Iran.

Investigations into the failure to find weapons of mass destruction in Iraq -- though largely exhausted in Bush's first term -- will have an encore in the second term. The Senate intelligence committee earlier this year voted to expand its investigation of prewar intelligence to the sensitive subject of how policymakers used the data; the new Senate, with more Republican members, may reconsider that choice. Also continuing is an FBI probe into the forged documents showing Iraq was seeking to buy nuclear material from Niger. Meantime, a commission appointed by Bush related to the Iraq intelligence is scheduled to report by March 31.

Speaking of deadlines, a report that may be the last word on the Abu Ghraib torture scandal is due in the next several weeks. Navy Vice Adm. Albert "Tom" Church has been probing interrogation practices throughout Iraq and Afghanistan.

If that doesn't resolve the matter, there is also a CIA report on the subject, potentially dozens of court-martial proceedings and a passel of civil cases -- a veritable full-employment plan for government lawyers and investigators.


Dana Milbank
Tuesday, November 9, 2004
Staff writer Walter Pincus contributed to this report.