Halliburton/Vice Pres. Cheney

  1. I thought this was interesting.

    Halliburton's Unfair Burden

    Tuesday, April 29, 2003

    By Hilary Kramer

    DOHA, Qatar-Let's give ourselves a break here. Operation Iraqi Freedom got off to a great start. Then, instead of applauding the American armed forces for sound planning and courageous efforts, some critics second-guessed them because they believed it was taking too long to secure Baghdad.

    Compared to the Gulf War, this conflict had a much tougher objective, more constraints on the military's options and greater international scrutiny, but it still came to a timely conclusion.

    Now that we've successfully liberated Iraq, some are griping about rebuilding efforts and how American companies that may participate in that process are somehow absolutely the wrong choices for the job. Engineering firms Bechtel Group and Fluor Corporation have both taken some flak, being accused of using political ties to make the short list on bids.

    But these "ties" are feeble at best, limited to a decade-removed former secretary of state sitting on the board of Bechtel and a retired former CEO of Fluor being considered as a possible postwar Iraqi energy official. All of which means that of the potential American contractors, energy services company Halliburton was the perfect choice to be condemned.

    After all, Vice President Dick Cheney worked as CEO of Halliburton from 1995 to 2000, as conspiracy theorists are quick to point out. They are equally eager to highlight that Halliburton's contract with the U.S. Army Corps of Engineers to fight Iraqi oil fires is a multi-year deal, awarded with no bids, and potentially worth $7 billion.

    What the critics choose to ignore is that Cheney dumped all of his Halliburton shares prior to taking office, so he's clearly not profiting from Halliburton's contract. Nor do they note Halliburton's stellar qualifications -- it's the world's second largest oilfield services company in addition to having built a distinguished history of providing logistical support for the U.S. military.

    And as much as critics love to throw around the enormous $7 billion number, the Army Corps of Engineers explains that this figure was used as a "worst-case scenario," based on the 750 oil wells that burned during the first Gulf War.

    Instead of the worst case, however, the U.S. military quickly controlled all of the Iraqi oilfields in this war, and according to the U.S. Central Command, of the nine oil well fires, all except one has now been extinguished.

    This success is due to the Army and Halliburton's quick reaction (their firefighters were already in place as part of an Army contingency plan dating back to late 2001), which enabled them to put out the fires in less than one month. Public bidding on an emergency situation like this would likely have taken a minimum of 45 days, says the Army Corps of Engineers, and would have led to the fires burning longer and potentially more hazardously.

    What is the bill so far for this expedient work by Halliburton (subcontracted out to two different firms, I might add)? A mere $50.3 million, which is a fraction of the $7 billion we keep hearing about.

    Thanks to the unfounded cries of impropriety over the oil fires contract, however, Halliburton and the Bush administration chose to take the high road, and the company withdrew from the bidding for the much more lucrative U.S. government contract to reconstruct Iraq's infrastructure.

    Bechtel has just been announced as the winner of this 18-month, $680 million contract-the largest Iraq rebuilding contract thus far-covering work ranging from restoring utilities and sanitation systems to repairing buildings and transportation systems. This contract is viewed as merely the first of many Iraq reconstruction contracts that is ultimately expected to reach billions of dollars over several years.

    The immediate consequence of the negative press against Halliburton was the elimination of an exceedingly qualified company from the competitive bidding process for this important contract. The ongoing impact could well be the exclusion of Halliburton and other equally proficient firms from bidding on future contracts to rebuild Iraq.

    And I was under the impression that as Americans we always believed that competition was a good thing for economic efficiency. So why don't we just give these American companies a break? Despite baseless accusations to the contrary, the U.S. government sure didn't give them one.

    Hilary Kramer is a contributing editor to TechCentralStation.com and a frequent guest on the Fox News Channel.
  2. 10 Comments

  3. by   Mkue
    Excellent article furball, the administration chose to take the high road as I suspected they would.

    "Thanks to the unfounded cries of impropriety over the oil fires contract, however, Halliburton and the Bush administration chose to take the high road, and the company withdrew from the bidding for the much more lucrative U.S. government contract to reconstruct Iraq's infrastructure. "- Hilary Kramer

    "What the critics choose to ignore is that Cheney dumped all of his Halliburton shares prior to taking office, so he's clearly not profiting from Halliburton's contract. Nor do they note Halliburton's stellar qualifications -- it's the world's second largest oilfield services company in addition to having built a distinguished history of providing logistical support for the U.S. military."- Hilary Kramer
    __________________________________________________ _

    Halliburton had been providing support for the military all along.
  4. by   pickledpepperRN
    Halliburton and the Dictators: The Bloody History of Cheney's Firm

    April 16, 2003

    Kellogg Brown & Root, the company chosen last month by the Pentagon to extinguish oil well fires in Iraq, has a long
    history of supporting the same terrorist regimes vilified by the Bush administration and on at least one occasion
    defrauded the United States government to the tune of $2 million, according to public documents.

    Halliburton, headed by Dick Cheney before he became vice president, and it's KBR subsidiary did business with some of
    the world's most notorious governments and dictators - in countries such as Azerbaijan, Indonesia, Iran, Iraq, Libya
    and Nigeria. The company has routinely skirted U.S. sanctions placed on these countries and lobbied the U.S.
    government to lift sanctions so it could set up new partnerships and create new business opportunities in these

    Still, the Pentagon awarded the Iraqi oil well contract to KBR without competitive bidding; a move that some
    Democratic lawmakers in Congress said was based on favoritism because of Cheney's ties to the company.

    Charges of cronyism led the U.S. Army Corps of Engineers on Monday to open the job of putting out Iraqi oil well fires
    to other firms that will now bid for the multibillion -dollar contract and KBR would have to compete with other
    companies for the right to finish the job. The Army Corps of Engineers said it would seek new bidders to rebuild Iraq's
    oil infrastructure, considered the key to reviving that country's economy.

    KBR and Halliburton have broken U.S. laws on numerous occasions while Cheney was chief executive and as far back as
    1978. Moreover, the company inflated the price of some of its military contracts and defrauded the government.

    Last year, KBR agreed to pay the U.S. government $2 million to settle allegations it defrauded the military while
    Cheney was chief executive of parent company Halliburton. KBR was accused of inflating contract prices for
    maintenance and repairs at Fort Ord, a now-shuttered military installation near Monterey, Calif. The lawsuit, filed in
    Sacramento, alleged KBR submitted false claims and made false statements in connection with 224 delivery orders
    between April 1994 and September 1998.

    KBR and Halliburton has also paid out settlements to end investigations and lawsuits on half-a-dozen other occasions.

    In 1978, a grand jury indicted KBR on charges that it colluded with a competitor on marine construction work. KBR paid
    a $1 million fine to settle the charges. In 1995, the U.S. fined Halliburton $3.8 million for violating a ban on exports to
    Libya. Four years later, a Halliburton subsidiary opens an office in Iran, despite a U.S. ban on

    doing business in that country. In 2001, Halliburton shareholders lash out at company executives for its pipeline
    project in Burma, citing that country's human-rights abuses.

    Also in 2001, watchdog groups blast Cheney for placing 44 Halliburton subsidiaries in foreign tax havens.

    Halliburton's dealings in six countries - Azerbaijan, Indonesia, Iran, Iraq, Libya and Nigeria - show that the company's
    willingness to do business where human rights are not respected is a pattern that goes beyond its involvement in
    Burma. A May 2001 report in the Multinational Monitor identified the following countries in which Halliburton and its
    KBR unit did business with, despite U.S. sanctions and charges of human rights abuses.

    Azerbaijan. Dick Cheney lobbied to remove Congressional sanctions against aid to Azerbaijan, sanctions imposed
    because of concerns about ethnic cleansing. Cheney said the sanctions were the result only of groundless campaigning
    by the Armenian-American lobby. In 1997, Halliburton subsidiary Brown & Root bid on a major Caspian project from the
    Azerbaijan International Operating Company.

    Indonesia. Halliburton had extensive investments and contracts in Suharto's Indonesia. The post-Suharto government
    during a purging of corruptly awarded contracts canceled one of its contracts. Indonesia Corruption Watch named
    Kellogg Brown & Root (Halliburton's engineering division) among 59 companies using collusive, corruptive and
    nepotistic practices in deals involving former President Suharto's family.

    Iran. Dick Cheney has lobbied against the Iran-Libya Sanctions Act. Even with the Act in place, Halliburton has
    continued to operate in Iran. It settled with the Department of Commerce in 1997, before Cheney became CEO, over
    allegations relating to Iran for $15,000, without admitting any wrongdoing.

    Iraq. Dick Cheney cites multilateral sanctions against Iraq as an example of sanctions he supports. Yet since the war,
    Halliburton-related companies helped to reconstruct Iraq's oil industry. In July 2000, the International Herald Tribune
    reported, "Dresser-Rand and Ingersoll-Dresser Pump Co., joint ventures that Halliburton has sold within the past year,
    have done work in Iraq on contracts for the reconstruction of Iraq's oil industry, under the United Nations' Oil for Food
    Program." A Halliburton spokesman acknowledged to the Tribune that the Dresser subsidiaries did sell oil-pumping
    equipment to Iraq via European agents.

    Libya. Before Cheney's arrival, Halliburton was deeply involved in Libya, earning $44.7 million there in 1993. After
    sanctions on Libya were imposed, earnings dropped to $12.4 million in 1994. Halliburton continued doing business in
    Libya throughout Cheney's tenure. One Member of Congress accused the company "of undermining American foreign
    policy to the full extent allowed by law."

    Nigeria. Local villagers have accused Halliburton of complicity in the shooting of a protester by Nigeria's Mobile Police
    Unit, playing a similar role to Shell and Chevron in the mobilization of this 'kill and go" unit to protect company
    property. Dick Cheney has been a strong advocate for preventing or eliminating federal laws that place limits on
    Halliburton's ability to do business in these countries.

    Before it awards the contract this time around, the Pentagon ought to consider that KBR, which the Army Corps of
    Engineers says is most qualified to extinguish Iraq's oil well fires, supports the same terrorist regimes we're at war

    Jason Leopold can be reached at: jasonleopold@hotmail.com
  5. by   pickledpepperRN
    Doing business with Libya, Iran, even Iraq in spite of sanctions. Then we read :
    April 16, 2003

    Cheney's former firm paid fines on prior

    By David Morris, CongressDaily

    One of the companies selected for a lucrative no-bid contract to
    help rebuild Iraq paid a $2 million fine after being accused of fraud
    during previous Defense Department work and was criticized by
    the General Accounting Office for cost overruns on another
    contract, according to government documents.
  6. by   Furball
    Well this teeter totter of a thread is sure balanced, eh?

    Teeters this way, then it suddenly teeters that way.

    I've come to the conclusion that I can't come to a conclusion, sigh.
  7. by   Mkue
  8. by   pickledpepperRN
    Please don't get off the teeter totter while someone is high up.
    Halliburton is doing OK.
    Halliburton Says 1Q Profit Nearly Doubled
    Tue Apr 29, 4:34 PM ET
    HOUSTON - Oilfield services giant Halliburton reported its first-quarter profit nearly doubled despite international results hurt by war in the Middle East and unrest in Venezuela.
    The Houston-based company reported net income of $43 million, or 10 cents per share, in
    the January-March period compared to $22 million, or 5 cents a share, a year ago.
  9. by   pickledpepperRN
    Originally posted by Furball
    Well this teeter totter of a thread is sure balanced, eh?

    Teeters this way, then it suddenly teeters that way.

    I've come to the conclusion that I can't come to a conclusion, sigh.
    Well you started an interesting thread!
    Thank you.
  10. by   pickledpepperRN
    Is it so wrong to be a sceptic regarding this administration?

    What did Donald Rumsfeld know about ABB's deal to build
    nuclear reactors there? And why won't he talk about it?
    Monday, April 28, 2003
    By Richard Behar

    Defense Secretary Donald Rumsfeld rarely keeps his
    opinions to himself. He tends not to compromise with his
    enemies. And he clearly disdains the communist regime in
    North Korea. So it's surprising that there is no clear public record of his views on the
    controversial 1994 deal in which the U.S. agreed to provide North Korea with two light-water
    nuclear reactors in exchange for Pyongyang ending its nuclear weapons program. What's
    even more surprising about Rumsfeld's silence is that he sat on the board of the company
    that won a $200 million contract to provide the design and key components for the reactors.

    The company is Zurich-based engineering giant ABB, which signed the contract in early
    2000, well before Rumsfeld gave up his board seat and joined the Bush administration.
    Rumsfeld, the only American director on the ABB board from 1990 to early 2001, has never
    acknowledged that he knew the company was competing for the nuclear contract. Nor could
    FORTUNE find any public reference to what he thought about the project. In response to
    questions about his role in the reactor deal, the Defense Secretary's spokeswoman Victoria
    Clarke told Newsweek in February that "there was no vote on this" and that her boss "does
    not recall it being brought before the board at any time."

    Rumsfeld declined requests by FORTUNE to elaborate on his role. But ABB spokesman
    Bjoern Edlund has told FORTUNE that "board members were informed about this project."
    And other ABB officials say there is no way such a large and high-stakes project, involving
    complex questions of liability, would not have come to the attention of the board. "A written
    summary would probably have gone to the board before the deal was signed," says Robert
    Newman, a former president of ABB's U.S. nuclear division who spearheaded the project.
    "I'm sure they were aware."

    FORTUNE contacted 15 ABB board members who served at the time the company was
    bidding for the Pyongyang contract, and all but one declined to comment. That director, who
    asked not to be identified, says he's convinced that ABB's chairman at the time, Percy
    Barnevik, told the board about the reactor project in the mid-1990s. "This was a major thing
    for ABB," the former director says, "and extensive political lobbying was done."

    The director recalls being told that Rumsfeld was asked "to lobby in Washington" on ABB's
    behalf in the mid-1990s because a rival American company had complained about a
    foreign-owned firm getting the work. Although he couldn't provide details, Goran Lundberg,
    who ran ABB's power-generation business until 1995, says he's "pretty sure that at some
    point Don was involved," since it was not unusual to seek help from board members "when
    we needed contacts with the U.S. government." Other former top executives don't recall
    Rumsfeld's involvement.

    Today Rumsfeld, riding high after the Iraq war, is reportedly discussing a plan for "regime
    change" in North Korea. But his silence about the nuclear reactors raises questions about
    what he did--or didn't do--as an ABB director. There is no evidence that Rumsfeld, who took
    a keen interest in the company's nuclear business and attended most board meetings, made
    his views about the project known to other ABB officials. He certainly never made them
    public, even though the deal was criticized by many people close to Rumsfeld, who said
    weapons-grade nuclear material could be extracted from light-water reactors. Paul
    Wolfowitz, James Lilley, and Richard Armitage, all Rumsfeld allies, are on record opposing
    the deal. So is former presidential candidate Bob Dole, for whom Rumsfeld served as
    campaign manager and chief defense advisor. And Henry Sokolski, whose think tank
    received funding from a foundation on whose board Rumsfeld sat, has been one of the most
    vocal opponents of the 1994 agreement.

    One clue to Rumsfeld's views: a Heritage Foundation speech in March 1998. Although he did
    not mention the light-water reactors, Rumsfeld said the 1994 Agreed Framework with North
    Korea "does not end its nuclear menace; it merely postpones the reckoning, with no
    assurance that we will know how much bomb-capable material North Korea has." A search
    of numerous databases found no press references at the time, or throughout the 1990s,
    noting Rumsfeld was a director of the company building the reactors. And Rumsfeld didn't
    bring it up either.

    ABB, which was already building eight nuclear reactors in South Korea, had an inside track
    on the $4 billion U.S.-sponsored North Korea project. The firm was told "our participation is
    essential," recalls Frank Murray, project manager for the reactors. (He plays the same role
    now at Westinghouse, which was acquired by Britain's BNFL in 1999, a year before it also
    bought ABB's nuclear power business.) The North Korean reactors are being primarily
    funded by South Korean and Japanese export-import banks and supervised by KEDO, a
    consortium based in New York. "It was not a matter of favoritism," says Desaix Anderson,
    who ran KEDO from 1997 to 2001. "It was just a practical matter."

    Even so, ABB tried to keep its involvement hush-hush. In a 1995 letter from ABB to the
    Department of Energy obtained by FORTUNE, the firm requested authorization to release
    technology to the North Koreans, then asked that the seemingly innocuous one-page letter be
    withheld from public disclosure. "Everything was held close to the vest for some reason,"
    says Ronald Kurtz, ABB's U.S. spokesman. "It wasn't as public as contracts of this
    magnitude typically are."

    However discreet ABB tried to be about the project, Kurtz and other company insiders say
    the board had to have known about it. Newman, the former ABB executive, says a written
    summary of the risk review would probably have gone to Barnevik. Barnevik didn't return
    FORTUNE's phone calls, but Newman's Zurich-based boss, Howard Pierce, says Rumsfeld
    "was on the board--so I can only assume he was aware of it."

    By all accounts Rumsfeld was a hands-on director. Dick Slember, who once ran ABB's
    global nuclear business, says Rumsfeld often called to talk about issues involving nuclear
    proliferation, and that it was difficult to "get him pointed in the right direction." Pierce, who
    recalls Rumsfeld visiting China to help ABB get nuclear contracts, says, "Once he got an
    idea, it was tough to change his mind. You really had to work your ass off to turn him
    around." Shelby Brewer, a former head of ABB's nuclear business in the U.S., recalls
    meetings with Rumsfeld at the division's headquarters in Connecticut. "I found him enchanting
    and brilliant," he says. "He would cut through Europeans' (*** sorry, the author used a slang term) like a hot knife through
    Last edit by pickledpepperRN on May 4, '03
  11. by   pickledpepperRN
    Pentagon Hands Major Iraq Deal to Scandal-Ridden

    NEW YORK - The Pentagon made an interesting choice when it hired a U.S. company to build a small wireless
    phone network in Iraq: MCI, aka WorldCom Inc., perpetrator of the biggest accounting fraud in American business
    and not exactly a big name in cellular service.

    The Iraq contract incensed WorldCom rivals and government watchdogs who say
    Washington has been too kind to the company since WorldCom revealed its $11 billion
    accounting fraud and plunged into bankruptcy last year.

    "We don't understand why MCI would be awarded this business given its status as having
    committed the largest corporate fraud in history," said AT&T Corp. spokesman Jim
    McGann. "There are many qualified, financially stable companies that could have been
    awarded that business, including us."

    "I was curious about it, because the last time I looked, MCI's never built out a wireless
    network," said Len Lauer, head of Sprint Corp.'s wireless division.

    The contract in Iraq is part of a short-term communications plan costing the Defense
    Department about $45 million, said Lt. Col. Ken McClellan.

    The Pentagon also plans to have Motorola Corp. establish radio communications for security forces in Baghdad, a
    deal worth $10 million to $25 million depending on the options exercised, said McClellan, a Pentagon spokesman.
    The contract with WorldCom - which plans to adopt the name of its MCI long distance unit when it emerges from
    bankruptcy - has prompted grumbling in the telecommunications industry from people who say it was not put up for

    "We were not aware of it until it showed up in some news reports," Motorola spokesman Norm Sandler said.

    McClellan said he had no details on the process that led to the deal, which he said was signed early this month.
    WorldCom spokeswoman Natasha Haubold declined to comment on details of the contract.

    The company is to build a small wireless network with 19 cell towers that can serve 5,000 to 10,000 mobile phones
    used by reconstruction officials and aid workers in the Baghdad area.

    The network, using the GSM wireless standard dominant in Europe and the Middle East, is expected to be running
    by July.

    "This is an interim, quick government solution - this is not the basis for some national long-term solution for Iraq,"
    McClellan said. "That will probably have to be undertaken by the Iraqis."

    WorldCom is not a commercial wireless carrier. It once resold other wireless carriers' service in the United States but
    dropped that approach recently.

    However, Haubold said her company is fully qualified to perform the Iraq work.

    She pointed to the company's work on a wireless system in Haiti in the 1990s and a 2002 contract, in which it served
    as a subcontractor, to provide long-distance connections for a wireless network in Afghanistan.

    McClellan agreed that WorldCom's experience in Haiti and Afghanistan is "analogous work" to what is needed in Iraq.

    Haubold also stressed the company's overall deep relationship with the U.S. military and government.

    In fact, a recent review by Washington Technology, a trade newspaper that follows computing-related sales to the
    government, found that WorldCom jumped to eighth among all federal technology contractors in 2002, with $772
    million in sales.

    It was the first time WorldCom cracked the top 10.

    That $772 million figure refers only to deals in which WorldCom is the prime contractor to federal agencies. The
    company gets much more taxpayer money - exactly how much is not disclosed - from state contracts and from
    federal deals in which it is a subcontractor. That infuriates WorldCom critics, who say the government has kept the
    company afloat while the General Services Administration barred Enron and Arthur Andersen from getting contracts
    after their scandals emerged.

    They also say it shows how little WorldCom would be hurt by the proposed $500 million fine the company has agreed
    to pay to settle Securities and Exchange Commission fraud charges.

    "The $500 million is in a sense, laundered by the taxpayers," said Tom Schatz, president of Citizens Against
    Government Waste.

    Although the Iraq wireless deal is minor compared to other government contracts WorldCom has won - including a
    satellite data pact announced Tuesday with the National Oceanic & Atmospheric Administration - Schatz found it

    "Why would you have a company that is not really in that line of business providing that service for another country?"
    he said. "Given the circumstances and the bailout the government seems to be engaged in, that is certainly is not fair
    to their competitors or the taxpayers."
  12. by   pickledpepperRN
    Published on Sunday, May 25, 2003 by the Atlanta Journal-Constitution
    Critics Decry SEC's Corporate Settlements
    by Marilyn Geewax

    WASHINGTON -- This past week, the Securities and Exchange Commission reached settlements with both
    WorldCom Inc. and PricewaterhouseCoopers LLP, forcing the companies to pay penalties for wrongdoing.

    But some victims of corporate misdeeds ask: Why isn't the SEC hauling the scofflaws into court to let jurors decide
    the punishments?

    "The SEC should be enforcing the law to its fullest extent," not negotiating compromises, said Mitch Marcus, a
    former WorldCom manager who founded BoycottMCI.com to lobby for stiff punishment. Compared with the suffering of
    investors, WorldCom ended up with "a very, very insignificant fine."

    But the SEC says a settlement offers several advantages. By negotiating an agreement,
    the government can impose swift punishment that forces changes in corporate behavior to
    prevent future crimes, said Thomas Newkirk, associate director of the SEC's enforcement

    "You get things much more quickly than would otherwise be the case," Newkirk said.

    "The typical litigation case probably takes between two and three years," he said. "One
    needs to balance the benefit of getting remedial provisions into place now, as opposed to
    getting them three years from now."

    WorldCom agreed last week to settle fraud charges by paying $500 million, the largest penalty ever proposed for
    accounting fraud. In New York, U.S. District Court Judge Jed Rakoff is expected to decide in June whether to approve

    Also last week, the SEC announced that PricewaterhouseCoopers LLP agreed to pay $1 million to settle allegations
    of improper conduct related to its audits of SmarTalk TeleServices, a now-bankrupt provider of prepaid telephone
    cards and wireless services.

    With the lure of a settlement, the SEC can force almost immediate changes to protect shareholders and others from
    further victimization, Newkirk said.

    For example, after the WorldCom accounting fraud was revealed last June, "we got a monitor put into place to make
    sure we didn't have another Enron-type situation where the managers were giving themselves big bonuses on the way
    out of the door," Newkirk said. "We also got controls put into place to fix what was wrong with their record keeping
    and the accounting."

    In the PricewaterhouseCoopers case, the firm agreed to establish new document-retention policies.

    J. Boyd Page, a securities attorney in Atlanta, agreed that settlements typically offer more benefits than long court

    "Settlements can make sense because white-collar crime is ofttimes very, very complicated," Page said. "It can take
    weeks on end simply to present a case" to the jury after years of investigative work.

    As the case drags on, costs mount, he said. "There is a huge cost of going to trial, just in terms of absolute dollars,
    to retain lawyers, pay experts and pay employees to sit in a courtroom instead of doing their own jobs," he said.
    "Furthermore, trials, whether you win or lose, can be quite devastating simply because of adverse publicity."

    But Page said the reluctance to go to trial can harm shareholders who want to sue.

    "From a plaintiff's perspective, I prefer to go to trial because during the course of that, there is a lot of testimony
    developed, a lot of documentary evidence made public," he said. "That type of evidence often bolsters the claims of
    individual investors who have lost their life savings."

    The settlements also fail to help victims of corporate wrongdoing by allowing the perpetrators to avoid admissions of
    guilt. The WorldCom settlement allowed the company to declare that it does not admit guilt.

    Page said companies insist on that provision because typically, "they remain subject to a number of class-action civil
    lawsuits. An admission of guilt would pretty much stop them from fighting those lawsuits."

    Reformers alarmed

    Charlie Cray, a corporate reform expert for Citizen Works, a Ralph Nader group, said quick settlements allow
    companies to get off too easily.

    At WorldCom, where company officials overstated earnings by about $11 billion since 1999, a punishment of $500
    million won't amount "to a penny on the dollar," Cray said. "The number sounds impressive at first because it's the
    largest ever levied in history, but you take into count all the factors, and it looks pretty weak."

    Moreover, because the company didn't have to admit a crime, "it doesn't help people in lawsuits," he said.

    If the court accepts the SEC proposal, the settlement could help WorldCom Chief Executive Michael Capellas lead
    WorldCom out of the largest bankruptcy case in history.

    WorldCom's revelations last June of massive overstatements of earnings came on the heels of similar
    announcements by Enron Corp., Tyco International Ltd. and others.

    The SEC accused WorldCom with committing fraud "in connection with several securities offerings" and violating
    record and bookkeeping laws. Former Chief Financial Officer Scott Sullivan, who was fired after the earnings
    misstatements were discovered, has pleaded not guilty to criminal fraud charges. Ex-CEO Bernard Ebbers has said
    he was unaware of the disguised expenses and has not been charged.

    Four other executives have pleaded guilty to criminal charges filed in New York and are cooperating with

    2003 The Atlanta Journal-Constitution