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Bush Predicts Cheney Will Be Cleared

July 17, 2002

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WASHINGTON (AP) _ President Bush said Wednesday he is confident an inquiry into Dick Cheney’s former oil company will exonerate the vice president, drawing swift criticism from Democrats who said Securities and Exchange Commission investigators may be influenced by the president’s prediction.

As a string of corporate scandals loomed as a major political issue, Bush shrugged off calls to have the SEC release files from its decade-old insider-trading investigation of Harken Energy Corp. _ the president’s former oil company.

``There is no case,″ said Bush, a former Harken board member. ``It was fully investigated by career investigators.″

Shifting the subject, the president said: ``The key thing for the American people is to realize that the fundamentals for economic vitality and growth are there.″

The White House has been dogged in recent days by questions about an old SEC investigation into Bush’s $848,000 sale of Harken stock, a case that was dropped in 1991. The SEC is currently investigating the Dallas-based Halliburton Co.’s accounting practices when Cheney was its chief executive.

Asked if he was confident the SEC would find Cheney did nothing wrong, Bush replied, ``Yes. I am″ and called the vice president a ``fine business leader.″

Until the news conference, the White House had diligently refused to comment on the Halliburton inquiry to avoid being accused of trying to influence the independent agency. Cheney himself has not discussed the SEC inquiry.

``Bush has blown Cheney’s cover,″ said Democratic National Committee spokeswoman Jennifer Palmieri.

``The whole White House strategy for protecting Cheney has been to refuse to answer any questions on Halliburton. For Bush to clear him from the podium blows that cover,″ she said. ``And what kind of message does it send to the SEC when the president of the United States says, in effect, there is nothing to investigate?″

Bush did not respond when asked whether Cheney should go public about his business dealings.

He grudgingly addressed the Harken and Halliburton cases in a joint news conference Polish President Aleksander Kwasniewski, who was rewarded a rare state visit for his staunch support of U.S. foreign policy.

``America and Poland see the world in similar terms. We both understand the importance of defeating the forces of global terror,″ Bush said, flanked by his counterpart in the East Room ceremony.

Kwasniewski replied, ``We want to reconfirm our readiness to continue this combat.″

On other subjects, Bush:

_ Renewed his call for new leadership for the Palestinian people, but did not answer a question about whether a compromise could be reached to give Yasser Arafat a figurehead position in a new Palestinian government. Secretary of State Colin Powell has suggested he is open to the idea.

_ Sought to quell European concerns about potential U.S. military conflict with Iraq. ``We don’t necessarily place one aspect on the war against terror as more important than the other.″

_ Said the long-term cost to run his proposed Homeland Security Department is ``going to depend upon how effective we are at defeating the enemy.″ He acknowledged that some states will have trouble paying their share of new homeland security costs, but predicted that their situation will improve as the economy prospers.

The Harken and Halliburton investigations pose a political problem for Bush as he tries to shield himself and his party from fallout over a string of corporate scandals.

He has urged corporate America to adhere to the highest ethical standards, and has proposed stiff new penalties for wrongdoers.

Democrats hope to convince voters that Bush and Cheney were involved in the same types of business dealings they now denounce.

``They can’t hide from their own business records,″ the Democratic Party spokeswoman said.

Bush said the SEC has released key documents under Freedom of Information laws. However, the SEC continues to withhold a wide range of internal investigative documents in the probe.

The SEC closed the Harken case in 1991 without taking any action against Bush. The SEC found that Bush had known of only $4 million of a $23 million loss the company announced two months after he sold his stock.

Congressional Democrats have said they may hold congressional hearings into accounting at Halliburton Co., when Cheney was chief executive of the oil equipment company.

A watchdog group, Judicial Watch, has filed a shareholders lawsuit alleging that Halliburton overstated revenue by $445 million from 1999 through 2001. The suit suggests that Halliburton’s accounting practices resulted in an overvaluation of its shares.

``I’ve got great confidence in the vice president,″ Bush said. ``He’s doing a heck of a good job. When I picked him, I knew he was a fine business leader.″

On the SEC inquiry, he said: ```That matter will run its course.″

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