Do As I Say, Not As I Did

President Bush doesn't think corporate America needs a pile of new regulations. Someone just needs to tell business leaders to cut out the shenanigans. Bush did exactly that last week with some tough words. But his words were far more ambiguous when he had to explain alleged shenanigans of his own. Dick Cheney offered no answers to similar questions. That undercut Bush's moral authority, and the stock market just kept dropping.

WHAT BUSH SUPPORTS "I urge board members to check the quality of their company's financial statements, to ask tough questions about accounting methods," Bush told corporate leaders during a speech last week, saying CEOs will be held accountable.

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WHAT BUSH AND CHENEY DID While BUSH was on Harken Energy's board of directors and a member of its audit committee, the company hid losses by selling a subsidiary to itself. Harken officers bought Aloha Petroleum with a loan from the company. Harken labeled the sale a $7.9 million profit, shrinking its losses to just $3.3 million for the year. The SEC forced the company to restate its losses to $12.6 million.

THE EXPLANATION Bush's words to reporters last week: "All I can tell you is that in the corporate world, sometimes things aren't exactly black and white when it comes to accounting procedures."

[WHAT BUSH SUPPORTS] "I challenge compensation committees to put an end to all company loans to corporate officers." Bush says the loans have been abused. He also calls on CEOs to clearly justify how much they are paid in salary, bonuses and benefits.

[WHAT BUSH AND CHENEY DID] Twice, in 1986 and 1988, Harken loaned BUSH money at low interest to buy company stock. The loans totaled $180,375. The company later sweetened the terms of the loans, freeing up some of Bush's stock that was being used as collateral. Bush sold those shares and used the proceeds--$848,000--to help finance his purchase of part of the Texas Rangers baseball team.

[THE EXPLANATION] The White House says there is a big difference between Bush's loans, which were a common practice, and gross abuses like WorldCom's $400 million insider loan to CEO Bernard Ebbers.

[WHAT BUSH SUPPORTS] "We're moving corporate accounting out of the shadows, so the investing public will have a true and fair and timely picture of assets and liabilities and income of publicly traded companies. Greater transparency will expose bad companies."

[WHAT BUSH AND CHENEY DID] While CHENEY was Halliburton's CEO, the company's construction contracts allowed it to negotiate for additional payment if cost overruns hurt profits. In 1998, the company began listing those disputed claims as revenue, even when clients had not yet agreed to pay. Two months ago, Halliburton disclosed that the SEC was investigating the aggressive accounting.

[THE EXPLANATION] Cheney's not talking. But a White House spokesman said the lawsuit against Halliburton, Cheney and Arthur Andersen on behalf of shareholders was "without merit."