Freeport chief denies corruption charges

Freeport chief denies corruption charges

JAKARTA (JP): The chief executive officer of U.S Freeport
McMoRan Copper and Gold. Inc., James Moffett, denied Thursday
allegations of corruption in PT Freeport's Indonesia operation,
including charges against a senior economic minister.

"There's no KKN in Freeport Indonesia," James Moffett said at
the Attorney General's office here, using the Indonesian acronym
for "corruption, collusion and nepotism."

Moffett spoke to reporters after being questioned for more
than eight hours by the office's intelligence section. But he did
not give any details of the questioning.

In a statement made available to the media, Moffett also
insisted that his visit was at the request of the authorities in
order to provide a full disclosure of the details of Freeport's
business transactions in Indonesia.

A furor over Freeport erupted last month over allegations by
an American academic Jeffrey A. Winters that Coordinating
Minister for Economics, Finance and Industry Ginandjar
Kartasasmita, had "personally benefited" from contracts awarded
to Freeport in Indonesia in 1991 while Ginandjar was minister of
mines and energy.

Ginandjar, however, has vehemently denied the charges.

Moffett told journalists his relationship with Ginandjar
started when Freeport renegotiated its second contract for gold
and copper mines in Irian Jaya in the late 1990s.

"Ginandjar and I became friends after we had really negotiated
this transaction...and working with him as a minister of mines,"
Moffett said.

Responding to stories that Ginandjar regularly flew in
Freeport's private aircraft, Moffett said: "The only time Pak
(Mr) Ginandjar has traveled on our plane was when he accompanied
us."

The graft allegations swirl around the sales of some 10
percent of Freeport shares to the Bakrie Group in 1991.

Moffet said the sale to the Bakrie Group was made possible
because it was the only party interested in investing in the mine
and "no one else stepped up to buy."

"It was very difficult to find someone to buy the 10 percent
interest in the mine...It was very difficult to get someone to
spend money in Irian Jaya, one of the remotest places in the
world, especially when you do not know for sure what the outcome
of the exploration and development is going to be," he said.

The New Orleans-based Freeport runs one of the world's largest
copper and gold mines in remote Irian Jaya and is Indonesia's
largest taxpayer.

Winters said he had based his allegations on material provided
by an Indonesian research group, Econit.

The Attorney General's office has already questioned
Ginandjar, Econit's head Rizal Ramly, and several current and
former Freeport Indonesia executives.

Winters, according to his lawyers, has said he too is willing
to testify if he receives a guarantee that he can freely enter
and leave the country.

He is listed as a speaker at an economic conference here later
this month.

When asked to comment on criticisms about the distribution of
royalties from his company Moffett said: "It is not my place to
come to your country and tell you how to distribute the royalty
and taxes that we pay, but I am glad that it is being discussed
and I hope that a resolution that will satisfy all of the people
can be reached so that you people will believe that the millions
of dollars that we are paying in royalties and taxes will be
properly distributed."

Moffett added that his company had already paid the Indonesian
government US$1.1 billion in royalties, taxes and dividends under
the second contract between 1992 and 1997. (byg)