Halliburton 2002

www.nytimes.com/2004/08/06/business/suit-accuses-halliburton-of-fraud-in-accounting.html

Many of the blogs that are posted about accounting scandals are interesting. The amazement in CEO's, CFO's, financial controllers, etc. reporting or not reporting funds, is unnecessary. Eventually these corporate officers are arrested or fined and sometimes both.

Halliburton's fraud started in 1998 and ended in 2001. During this time Halliburton's chief executive, David J. Lesar, Douglas Foshee, former CFO, Gary Morris, retired CFO, and Robert Muchmore Jr., former controller, are the accused in this fraud. The interesting part of this fraud involves former Vice President Dick Cheney.  Mr. Cheney was the chief executive for two years at Halliburton. The S.E.C did a thorough investigation on Mr. Cheney and found nothing. They stated that Mr. Cheney's conduct was "proper in all aspects."

In order for Halliburton to achieve this fraud, a former employee stated that she was told to do "whatever it took" to meet Wall Street's financial expectation from superiors of Kellogg Brown and Root. K.B.R is an engineering and construction unit that over billed services, overstated accounts receivable, and understated accounts payable.

The lawsuit filed by the S.E.C resulted in a settlement of $7.5 million with Halliburton, and Mr. Muchmore.  Despite the proof of  many schemes committed by Halliburton, they called the lawsuit abusive and a way to smear the company's name. In addition to the charges filed by the S.E.C., the Justice Department investigated overbilling for government services in Balkans. The Justice Department and the S.E.C. are investigating a project set up by Halliburton involving Nigeria. The accusations are illegal payments under the Foreign Corrupt Practices Act. There was no further development on this investigation in August 2004.