http://www.nytimes.com/2004/08/06/business/06halliburton.html?hp=&pagewanted=print&position=Four former finance employees at the Halliburton Company contend that a high-level and systemic accounting fraud occurred at the company from 1998 to 2001, according to a new filing in a class-action lawsuit on behalf of investors who bought the company's shares.
The filing accuses the company of accounting improprieties that go far beyond those outlined by the Securities and Exchange Commission in its civil suit against Halliburton, which the company settled on Tuesday, paying $7.5 million.
The charges in the complaint and in the S.E.C.'s action cover the two years when Vice President Dick Cheney was Halliburton's chief executive. But he was not named as a defendant in the new filing nor in the regulatory proceeding. S.E.C. officials said Mr. Cheney provided testimony and willingly cooperated in their inquiry and his lawyer, Terrence O'Donnell, said Mr. Cheney's conduct as chief executive of Halliburton was "proper in all respects." He added that the S.E.C. "investigated this matter very, very thoroughly and did not find any responsibility for nondisclosure at the board level or the C.E.O. level."
According to the new filing, the four former employees, who are not identified in the suit but were managers in financial or accounting positions, say that Kellogg Brown & Root, Halliburton's engineering and construction unit, inflated its financial results by overbilling for services, overstating its accounts receivable due from customers and understating accounts payable owed to vendors. The filing also noted that one former employee in the accounting department said superiors had told her to do "whatever it took" to make projects appear profitable and to meet Wall Street estimates for the company's earnings.
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