(MONEY Magazine) – The Republicans' reputation for business acumen has taken a Texas-size beating in recent months. First there was Enron. Now come persistent rumors that Halliburton, another Texas energy company with Republican ties, might be joining it in Chapter 11.

Halliburton has consistently denied it will be forced into bankruptcy by asbestos-related lawsuits against its Dresser Industries subsidiary. But with asbestos class actions having already forced USG and W.R. Grace into bankruptcy, investors are understandably nervous. Since May 2001, Halliburton stock has plummeted 73%.

The 1998 acquisition of Dresser was negotiated by Vice President Dick Cheney, then Halliburton's CEO. Analysts say Cheney isn't to blame. "He couldn't have anticipated that juries would start to award huge amounts of money in asbestos cases," says Poe Fratt, an oil analyst at A.G. Edwards. But Fratt does think Cheney is a liability for shareholders. Congress could step in and limit corporate exposure to asbestos suits or make jury awards tax deductible. But given the mood in Washington these days, no politician wants to be criticized for bailing out the veep's former company at taxpayer expense. "There's a snowball's chance in hell that asbestos legislation gets any traction," says Fratt, "especially in an election year."

--JON BIRGER