Halliburton Responds to Larry Klayman's Supersillyous Suit(My Title)

CBS Market Watch "Big Charts" Web Site ^ | 7/10/2002 | MarketWatch.com

[SierraWasp]

12:57PM Halliburton responds to Judicial Watch lawsuit (HAL) by Michael Baron Halliburton (HAL) is off 30 cents, or 2.1 percent, to $13.82, in midday action. The company is out with a press release responding to a lawsuit filed by Judicial Watch, a Washington, D.C.-based legal watchdog group. The suit alleges fraudulent accounting practices at Halliburton took place during the period when current vice president Dick Cheney served as its chairman and CEO. Halliburton called the claims in the suit, "untrue, unsupported, and unfounded." The company continued: "We are working diligently with the SEC to resolve its questions regarding the company's accounting procedures. Halliburton has always followed and will continue to follow guidelines established by the SEC and GAAP, General Accepted Accounting Principles."

[Texasforever]

The SEC is always there dummy.

[UnBlinkingEye]

But we CAN prove that Clinton perjured himself.

Yet Dubya refuses to prosecute.

[terilyn]

No kidding.

Now go back and read my post again. Oh, and first read yours.

Then try again.

[FreedominJesusChrist]

Please read my previous posts on the SEC, because I am not going to re-post them.

I realize that the SEC is always there, the point is, they weren't doing their job.

[Texasforever]

A mega company such as Halliburton is a full service engineering, procurement, and construction entity. When bidding EPC for a billion dollar contract on a lump sum basis, the quality of that estimate is only as good as the estimate information provided by the client. For that reason, lump sum estimates are submitted + or - 5 to 25%. During execution of the project, “production check estimates" are scheduled on a regular basis to re-cast the original estimate and release contingency funds. When in construction, field change notices are written to reflect added work do to client changes or engineering errors or in schedule delays because of bulk material and equipment delays. Every change notice except for engineering errors is a reimbursable cost either from the client or the equipment vendors. Those change notices are then submitted to the client and reimbursed by them. Legal action is usually required to gain non-performance costs from vendors. However; each dollar held in the form of a construction change notice OR an engineering scope change is an account receivable at the end of plant commissioning.

I will not even try to go into contracts that are based on joint venture construction projects that a commonly made up of 2 or more multinational EPC firms with Halliburton being the Project Manager for the overall effort.

I think that there is a bit of confusion about project contingencies and project changes. The contingencies are based on the confidence of the estimates, from the award estimate through the various check estimates. These contingencies are NOT booked as revenue until the money is justified by the estimate and signed off on by the client. The greatest costs generated in these estimates are in bulk material quantity increases. All construction man-hour and schedule estimates are based on the time required to install bulk materials.

Engineering change orders are issued for schedule delay caused by client delay in document approval, estimate reviews and sign-offs of client changes of installation documents and the overtime required to keep schedule dates.. Over the life of a 2-year engineering schedule these costs can run into the millions over several projects. Those are man-hours that Halliburton is paying up front for at about 40 bucks engineering man-hours out of its own pocket. Those changes are not a part of the contingencies BUT are real hours expended and billable to the client. The same scenario holds true for construction but on a much larger scale. Just for a typical point of reference, a single Ammonia-Urea complex with bagging facilities require up to 200,000 engineering man-hours alone. Triple that for construction. Halliburton in good times may have 5 of these running at any given time. Then look at the amount of money under "investigation" I believe it was about 30 mil

[Mo1]

This move on the DOJ's part is what is going to cause the entire company to go out of business.
A lot of people in Illinois are employed by Arthur Anderson and are angry at this move. Although I cannot say this was the wrong move on the DOJ's part.

Oh please ... the DOJ is investigating Newsweek .. you think they are gonna go out of business

Ross Perot's company is under investigation .. you think they are going to go out of business

If AA closes shop it is because a few morons helped cook a few books and lost the trust of their remaining clients

[terilyn]

Oh I'd say they're working just fine!

I'll have to catch up tomorrow. My alarm clock goes off in less than five hours.

Hold down the fort would you? Iwo's kind of busy down at the home.

'Nite

[Amelia]

Oh, I don't know, exaggerating profits, "cooking" the books...

Is that what the complaint alleges?

[Fred Mertz]

I realize that the SEC is always there, the point is, they weren't doing their job.

True. But all the politicians voted for the head of the SEC. I wonder why?

[FreedominJesusChrist]

I assume so, since the main point of the complaint was that accounting fraud led to shareholder losses.

[FreedominJesusChrist]

What do you think?

[Mo1]

Then where was the SEC before now? They are supposed to be monitoring this type of stuff

So it's ok for the SEC and the DOJ to investigate all the other companies but just not Halliburton ??

Like I said .. Larry is on a witch hunt

[UnBlinkingEye]

A mega company such as Halliburton is a full service engineering, procurement, and construction entity. When bidding EPC for a billion dollar contract on a lump sum basis, the quality of that estimate is only as good as the estimate information provided by the client.

All 'fixed' bid contracts are done on the same basis regardless of scale. Low bids assume the specifications will change and changes are where profit is to be found.

[FreedominJesusChrist]

True, but the DOJ's investigation certainly is not good for business either.

[FreedominJesusChrist]

"So it's ok for the SEC and the DOJ to investigate all the other companies but just not Halliburton ??"

The SEC is supposed to be monitoring this kind of stuff period. That is why they are even in existence--to protect investors from fraud and other investment malpractices.

[Mo1]

Nice try .. you didn't answer my question

[deport]

I assume so, since the main point of the complaint was that accounting fraud led to shareholder losses.

---

Is it possible that the main point is invalid?

[FreedominJesusChrist]

Yes, if they have the probable cause to suspect fraud and malpractice.

[FreedominJesusChrist]

Not in my opinion.

[deport]

Very few things are that concrete.... remember this is going before a jury should the 'eww' get it that far.....