Video of Cheney extolling virtues of Arthur Andersen surfaces

Thursday, July 11th 2002, 12:00 am

By: News On 6

WASHINGTON (AP) _ A 1996 promotional videotape has surfaced that features Dick Cheney praising now-disgraced Arthur Andersen LLP for going above and beyond routine audits for the company he ran for five years.

The oil services firm the vice president once headed, Halliburton Co., is being investigated by the Securities and Exchange Commission for the way it accounted for cost overruns on construction jobs during Cheney's tenure. Cheney and the company were sued on Wednesday by a watchdog group alleging fraudulent accounting practices, a suit the White House dismissed as lacking merit.

The Wall Street Journal obtained a copy of the video, which can be viewed on the Internet. On the tape, Cheney and six other executives applaud the accounting firm.

``One of the things I like that they do for us is that, in effect, I get good advice, if you will, from their people based upon how we're doing business and how we're operating, over and above the, just sort of the normal by-the-books audit arrangement,'' said Cheney, who headed Halliburton from 1995 to 2000.

The four-minute video was produced by Andersen in 1996, well before the company was damaged by revelations about its role in such corporate scandals as the collapse of Enron Corp. and WorldCom Inc.

In May, Andersen was convicted of obstruction of justice by shredding documents that had to do with Enron, which admitted it exaggerated profit to appeal to investors.

The video became available as President Bush demanded new penalties for corporate wrongdoing to restore public confidence in the stock market.

A spokeswoman for the vice president said Halliburton had no reason to question Andersen at the time.

``Arthur Andersen was Halliburton's accountant for 50 years,'' said Jennifer Millerwise. ``Obviously, they had never had a problem, so of course under those circumstances the vice president, along with many other CEOs, did a piece.''

Millerwise said Cheney was unhappy that Andersen identified him as ``vice president'' in a recent copy of the video.

``It's inappropriate, and they did not ask our permission,'' she said.

The video features another executive whose company is now under an SEC investigation: Peregrine Systems' former chief executive, Steve Gardner, who left soon after the company fired Andersen as its auditor. Peregrine Systems said it may have overstated revenue.

David Rubenstein appeared on the video praising Andersen for not collecting its fees right away when he first started his company, The Carlyle Group. ``They carried us for quite a while,'' Rubenstein said.