Last week every liberal’s favorite company, oil services supplier, all-round US Army replacement and DOD no-bid contract winner Halliburton, managed to squeak out (more or less) of an SEC investigation into accounting shenanigans that kept its stock price high while it was merging with Dresser in the late 1990s. Several commentators thought that the SEC let them off very lightly and, for reasons that are unclear (but can be guessed at by us conspiracy theorists who note that the SEC head was appointed by a Mr G.Dubya Bush), the SEC decided not to allot any legal blame to Halliburton’s CEO at the time, a Mr R. Cheney. Mr R. Cheney has a close political relationship with several people called Bush, and also serves in some kind of role in the current Administration. He does though remain on Halliburton’s payroll receiving somewhere between $150,000 and $600,000 a year in something called "deferred" compensation. If you’re interested in this ruling you might want to read liberal blogger Billmon’s article on the subject.
Halliburton though is engaged in another potential scandal that may be of more interest to my health care audience. They are launching a pre-emptive strike (another Cheney legacy no doubt) against three retirees who complained about being dumped out of their company-sponsored health coverage so that the retirees have to appear in a court in a state of Halliburton’s choosing, and so that Halliburton can get its side of the story out first. The company’s argument is that they are entitled to change their retirees’ coverage.
This may be a (rare) case where Halliburton is not completely in the wrong, although by suing their own retirees, one of whom is the former VP of HR at Dresser, they continue to prove that PR is not their strong suit. While the promise to keep the health benefits may have been rescinded and while that decision may be morally dubious, legally it appears that corporations can dramatically reduce benefits. For example United Airlines has recently basically cancelled all its contributions to pension and health benefits for retirees (for an non-unbiased version of that story, see here) In any case this is a forerunner of what will happen in the next few years as companies start removing their health insurance benefits for retirees under 65 and the wrap-around Medi-gap policies, which typically provide drug coverage for their retirees over 65. The latter will of course be encouraged by the new Medicare drug benefit, despite the fairly substantial
bribes subsidies in the legislation which encourage employers not to cut this benefit.
The last laugh of course is that the purchase of Dresser brought with it a huge unknown unknown (as Mr Cheney’s friend and colleague Mr Rumsfeld might have said)– a huge asbestos liability which nearly took the company down with it.