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)