This is a partial transcript of "Special Report With Brit Hume," Oct. 6, 2004, that has been edited for clarity.

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(BEGIN VIDEO CLIP)

SEN. JOHN KERRY (D-MA), PRESIDENTIAL CANDIDATE: I have to tell you, you know, the country saw the clarity. The country sees the choice. He had no answer about Halliburton. He had no answer about, you know, taking care of the drug companies and the other company. He had no answer about the unfairness of their taxes. And he was incorrect in the facts.

(END VIDEO CLIP)

BRIT HUME, HOST: There it was again, the issue that Democrats keep bringing up against Dick Cheney, who was the CEO of the vast, energy services company, Halliburton (search), before running for vice president. It is indeed the focus of one of the Kerry campaign's ads.

(BEGIN KERRY-EDWARDS AD CLIP)

DICK CHENEY, U.S. VICE PRESIDENT: I have no financial interest in Halliburton of any kind and haven't had now for over three your.

NARRATOR: The truth? As Vice President Cheney received $2 million from Halliburton. Halliburton got billions in no-bid contracts in Iraq. Cheney got $2 million. What did we get? A $200 billion bill for Iraq, lost jobs, rising healthcare costs. It's time for a new direction.

(END KERRY-EDWARDS AD CLIP)

HUME: Last night, Vice President Dick Cheney (search) took the unusual s step of urging debate viewers to visit an Internet Web site to get the facts about his relationship with Halliburton. That site, though Cheney misstated it, is Factcheck.org.

And the person who did the fact checking is the veteran Washington investigative Brooks Jackson (search), who joins me now.

Brooks, welcome.

BROOKS JACKSON, DIRECTOR, FACTCHECK.ORG: Thank you, Brit.

HUME: So what about the claim there is about Cheney and Halliburton?

JACKSON: In that ad, there are two things wrong with that ad. One is Cheney did not get $2 million from Halliburton as vice president; $1.6 million of that came just before he was sworn in. So the ad is just...

HUME: What was that? Was that a distribution, a salary, what?

JACKSON: Basically deferred compensation, bonus and salary money, which he was owed by Halliburton and still is owed some. He still has one payment this year, another one next year to go. But it's money that Halliburton can't legally reduce.

HUME: So in other words, if something happened to — well, suppose something happened to Halliburton and its contracts with the government dried up. Would Cheney's interest in the continuing compensation that he gets — deferred compensation be at risk?

JACKSON: Well, actually he has taken out an insurance policy, which cost shy of $15,000 to insure against that very eventuality. So even if Halliburton goes bankrupt, Cheney gets what is he's owed under the terms of the insurance policy.

HUME: So he has continued to receive money from Halliburton in the form of deferred pay in the amount of what? Some $400,000, something like that?

JACKSON: Just shy of that, yes.

HUME: All right. Now, what about the question of contracts that Halliburton has gotten for its work in Iraq and I suppose elsewhere? What do you know about that?

JACKSON: Well, so far as anybody knows, Cheney has had nothing to do with those. They'd have gotten contracts, very lucrative contracts in Iraq. Whether they're making a profit on them or not is questionable. They are putting their subsidiary that has those contracts up for sale, last report.

But there just has been no solid evidence or even credible allegation at this point that Dick Cheney has had anything to do with those contract. He says he is totally recused from them. His chief of staff was informed that one of them was going to go to them. That is a far cry from influencing the award of contract.

HUME: What about this — the fact that these contracts with Halliburton have been no bid contracts? To the untutored person listening to that, that sounds like an act of favoritism by an administration or a government department to a particular company. Is that the case?

JACKSON: Well, my understanding is, of course, these were — the original contract and a much smaller one was, in fact, bid during the Clinton administration. This was an extension of that. It...

HUME: So you mean there was a preexisting relationship with Halliburton, or contract with Halliburton to perform what kinds of services? Do you know?

JACKSON: Well, I can't — I am not well briefed on the details of the contracts because that wasn't at issue in this particular that we just researched. But in general, no-bid contracts, in fact, are alarmingly common. I think there was a study out just the other day, showing something like 40 percent of all the Pentagon's contracts are no-bid contracts now, because they are just so few contractors who can handle the kinds of work that the Pentagon requires.

HUME: So, so far as — so it is possible then that Halliburton is chosen — it's name comes up often. I mean we keep hearing Halliburton this, Halliburton that, food service and so on.

JACKSON: Sure.

HUME: Why Halliburton? Is it something about the nature of the company or what?

JACKSON: Well, it's of course, because Dick Cheney was CEO. And we've heard...

HUME: Well, no. I know that's why we hear about it. But why does Halliburton get chosen for all these jobs?

JACKSON: Well, why does it get chosen for all these jobs? Well, in one case — and I'm going by what I read, the Pentagon determined that Halliburton was the only company that could handle planning in advance for the war on Iraq for...

HUME: On the scale...

JACKSON: ... repave — repair of their oil fields. They had the people who knew how to do it. And it was determined by the Pentagon officials, not by the White House, that they were the only ones who could handle it.

HUME: Now, Cheney had — obviously he would have had a stock interest as a CEO of the company. What about his stock interest in Halliburton?

JACKSON: Well, of course, he has no stock in Halliburton. He does...

HUME: Anymore?

JACKSON: What he does have are stock options, the right to buy at a certain price, which could be valuable in the future. And what he did was to turn over all his stock options and Mrs. Cheney's, whether it's in Halliburton or anything else, to a trust. And you can see — actually read the legal document on our Web site if you care to go there. We posted there for the first time.

HUME: And the trust does what?

JACKSON: What it does is it signs the after-tax profits from the eventual sale of these options, valued at roughly under $8 million...

HUME: To?

JACKSON: ... to charities. Three charities: University of Wyoming, a scholarship fund here in D.C....

HUME: Got you.

JACKSON: ... and hospital in D.C.

HUME: Brooks Jackson, great to have you. Thanks very much.

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