Judicial Watch Sues Cheney for Defrauding Investors

The legal watchdog group that made a career out of suing the Clinton White House has set Vice President Dick Cheney in its sights, filing a second lawsuit against the vice president in the last year.

Washington-based Judicial Watch is alleging that as former head of Halliburton oil services company, Cheney cheated shareholders by allowing fraudulent accounting practices that overstated the company's revenues between 1999 and the end of 2001.

"Halliburton overstated profits that many American citizens relied upon. That's fraudulent security practices and it resulted in those Americans suffering huge losses," said Larry Klayman, chairman and general counsel of Judicial Watch.

White House Press Secretary Ari Fleischer quickly dismissed the suit on Wednesday, saying the vice president's staff "believe(s) the suit is without merit."

The Securities and Exchange Commission announced in May that it was looking into Halliburton's accounting methods for reporting cost overruns on construction jobs, but no action has been taken at the company where Cheney served as chairman and chief executive from 1995 to 2000.

"We don't believe that there's any merit to this case," Halliburton spokeswoman Zelma Branch said.

U.S. District Court officials in Dallas said they had not yet received the suit, which Klayman said was filed there.

The Judicial Watch suit lists two shareholders as plaintiffs: Stephen S. Stephens of Indiana and Lyle and Deanna J. Lionbarger of New Mexico. It does not specify their hometowns or specify the number of shares they hold, but Klayman promised that the amount is "a lot".

It names Cheney, Halliburton and accounting firm Arthur Andersen LLP in the suit. Thirteen Halliburton board members and Terrence Edward Hatchett of Arthur Andersen, the accounting firm's former managing partner for North America, also are named in the suit.

This is the second suit Judicial Watch has brought against Cheney. The first, filed in July, seeks access to records of the Cheney-led energy task force that drafted the Bush administration's energy policy. A judge ordered the release of thousands of documents in March as a result of the suit.

The suit comes one day after President Bush delivered a 10-point plan on measures to fight corporate corruption, an issue that has claimed prominence since several companies, including Houston-based Enron energy company announced it was filing for bankruptcy after hiding billions of dollars in debt.

Judicial Watch was known as a thorn in the side of the Clinton administration, against whom dozens of lawsuits were filed ranging from the Monica Lewinsky investigation to Democratic fund-raising to the gathering of FBI files.

The group also alleged the GOP's House and Senate fund-raising committees illegally sold access to public officials by promising donors access to Bush administration officials. Federal election officials rejected the complaint.

Judicial Watch filed a $1.5 billion lawsuit in March on behalf of 14 Oklahoma City bombing survivors and victims' relatives, claiming Iraqi officials provided money and training to bombers Timothy McVeigh and Terry Nichols.

And it and the Cuban American National Foundation, a leading exile group, have campaigned for Fidel Castro's indictment in the killing of four men whose small planes were shot down by Cuban fighter planes.

The Associated Press contributed to this report.