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Halliburton's problematic Cheney connection
Hoping to escape the election spotlight, the vice president's old firm may shed its KBR division, the one doing billions of dollars of work in Iraq.

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By David Teather

Oct. 6, 2004 |

It must have seemed like a terrific stroke of luck: Dick Cheney, the man who for the past five years had been the chief executive of Halliburton, became the vice president in 2000. The oil services and engineering company was given a direct line to the White House. But Halliburton's relationship with the Bush administration is beginning to prove more problematic than it is worth.

The company admitted 12 days ago that it was considering selling Kellogg Brown & Root (KBR), the division carrying out billions of dollars' worth of work for the U.S. government in Iraq, in a desperate attempt to get out of the spotlight. It is considering a sale, a spinoff or a separate listing for the business on the stock exchange. The company's shares have fallen from $50 when Cheney first took office in the White House to the low $30s.

Career, firm built on asbestos cases

Dallas lawyer tagged as brilliant and opportunistic

DALLAS - Few legal careers track more closely with the 30-year history of asbestos litigation than Fred Baron's.

Praised as a brilliant tactician, criticized as an opportunist whose firm boldly pushed the ethical envelope, he built one of Texas' largest plaintiffs firms, Dallas-based Baron & Budd, from hundreds of millions of dollars in asbestos settlements and verdicts.

Today, the firm has 78 lawyers, 400 support staffers, three corporate jets, a double-digit percentage of the roughly 295,000 asbestos claims pending across the nation and annual revenues estimated by Forbes at $150 million a year. Baron's share: $21 million a year, the magazine estimates.

Baron scoffs at that number and says he sold his partnership share at the end of 2002 so as to not present a conflict of interest with his present job: raising money for the Democratic presidential ticket

"I'm done with asbestos litigation. I'm finished," Baron, 57, said in a recent interview. "Nobody prints that because I'm a poster boy, an asbestos lawyer working in his own self-interest."

He allows a bit later, however, that he is still an employee of the firm. His wife, Lisa Blue, remains a partner.

In the early 1970s, Baron was among the lawyers who unearthed documents showing how asbestos manufacturers hid evidence of the dangers of asbestos and, from the 1920s on, exposed hundreds of thousands of workers to the potentially lethal insulation product.

As a young lawyer fresh out of the University of Texas, Baron took the case of workers at a Pittsburgh Corning insulation plant in Tyler and eventually won a $2 million settlement for a group of workers there.

"I'm convinced lawsuits had more of an impact (on worker safety) than anything else," Baron said. Although federal agencies began regulating asbestos in the workplace in the early 1970s, around the time it began disappearing from use in the United States, the fines were hardly large enough to get industry's attention, Baron says.

When rival firms attempted to enter into a massive class-action settlement with 20 asbestos defendants in 1993, Baron fought it to the U.S. Supreme Court and won. He defeated another mass settlement several years later. The settlements, Baron argued, would have harmed so-called future claimants, those who had been exposed in the past but had not yet developed asbestos-related cancers or lung ailments, which have latency periods of up to 40 years.

The settlements also would not have been as beneficial to Baron's firm as the status quo, under which it collects 40 percent contingency fees as long as there are cases to bring.

As it grew, Baron's firm adopted several practices that vastly increased its caseload, revenue and reach, but came under fire as the number of asbestos cases mushroomed and companies began going bankrupt under mountains of questionable claims too numerous to fight in the courts.

To generate cases, Baron & Budd used mass screenings of former shipyard and factory workers to enlist clients, then coached and prepared them with practices that struck some as beyond ethical boundaries.

"I don't think we are the devil," he said. "We do a very good job for our clients. I think the system by in large has worked very well."

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