Last month, the Financial Times reported that Cheney and his second in command, David Lesar (who succeeded Cheney as Halliburton's CEO), were both aware of negotiations between Halliburton and the Houston companies -- Anglo-Dutch Petroleum International and an affiliate -- for the rights to develop a rich oil field in Kazakhstan. In 1997, Anglo-Dutch went to Halliburton and the two began negotiating. Anglo-Dutch later sued Halliburton because Halliburton kept confidential information about the oil field and then tried to buy out Anglo-Dutch's interest in the project. Last October, a jury sided with Anglo-Dutch. Halliburton and a British company, Ramco Energy, were ordered to pay Anglo-Dutch. Halliburton was ordered to pay the majority of the judgment.

After the judgment was finalized, Scott Van Dyke, president and chief executive of Anglo-Dutch, told the Financial Times, "I think Halliburton thought I was just a little guy that they could walk all over."

Perhaps the most serious legal problems now facing Halliburton -- and Cheney -- involve the alleged bribery in Nigeria. Halliburton got into the Nigerian construction project in 1999. French authorities are investigating a $180 million slush fund that may have been used to bribe Nigerian officials. Cheney is one of several former Halliburton officials who may face indictment by French courts thanks to his role in the $4 billion project, which was built by Halliburton and Technip, one of France's largest engineering firms.

On June 18, Halliburton announced that it was "severing all ties" to Jack Stanley, the former president of Halliburton's construction and services subsidiary, Kellogg, Brown & Root. Halliburton took action against Stanley and another Halliburton official because it said they had received "improper personal benefits." Stanley allegedly received some $5 million in payments from the Nigerian project.

Halliburton has launched its own investigation into the Nigerian mess. The probe is being handled by the Houston law firm of Baker Botts, which has close ties to the Bush administration. The lawyer investigating the matter is James Doty, who represented George W. Bush when he was purchasing the Texas Rangers baseball team in the late 1980s. The Securities and Exchange Commission has launched its own investigation into the Nigerian bribery scandal, and it appears that Baker Botts is representing Halliburton in that inquiry as well. A spokesperson for the law firm referred questions to Halliburton's spokeswoman, Wendy Hall. Hall did not respond to e-mails.

If the SEC finds that Halliburton did bribe Nigerian officials, the company and its officials could be charged under the Foreign Corrupt Practices Act. If it is convicted under FCPA, Halliburton will be barred from bidding on federal contracts. That would mean the company would lose all future contracts with the Pentagon -- an area that is now one of its primary businesses.

Cheney had served as secretary of defense in the first Bush administration, and during his time as Halliburton's CEO, he pushed the company to increase its contracting deals with the Pentagon. He hired a number of former high-ranking military officials, who then began aggressively pursuing deals with the U.S. Army and other branches of the military. In Iraq, Halliburton was awarded logistics and oil-field repair contracts worth some $8 billion.

But it's not clear that all of that work has been good for the company's bottom line. In fact, the opposite may be true. According to the company, in 2003 its Iraq-related work resulted in $3.6 billion in revenues. But those contracts accounted for just $85 million in operating profits.

Those profits may turn out to be very expensive. It appears that Halliburton has overcharged the Pentagon for everything from fuel and food to overnight stays for its personnel at the Kuwait Hilton. The Pentagon has launched wide-ranging audits of the company's activities. The Department of Justice has launched its own inquiry into Halliburton, and the company could face fraud charges. In March, the company announced that the government audits of its contracts could "materially and adversely affect our liquidity" -- that is, the ability of the company to meet its ongoing cash obligations.

A CEO of an energy research firm, who also asked not to be named, said that Halliburton's lack of profits, given today's high oil prices, is stunning. "How can they not be making money in a business that is minting money?" he asked. He also questioned Cheney's push to get into the military contracting business. "The entitlements and all the attention on Halliburton's connections with the Pentagon and the Iraq contracts hasn't resulted in them getting anywhere. It's not repeat business. It's arguable whether they should even be in the business at all."

Given all of Cheney's blunders, it's no surprise that Halliburton's balance sheet is a disaster zone. Since the end of 2000, shareholder equity (the company's net worth) has fallen from almost $4 billion to less than $2.5 billion. Long-term debt during that time period has increased nearly fourfold, going from $1 billion to more than $3.9 billion. Between the end of 2000 and the first quarter of 2004, Halliburton's total liabilities went from $6.1 billion to $13.9 billion.

In short, Cheney's mistakes have cost Halliburton billions of dollars. But Cheney himself did just fine. During his 58-month stint at Halliburton, Cheney was paid a total of $45 million. He continues to receive deferred compensation from the company. This year's payout to Cheney is likely to exceed $100,000.

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