Official behind Freeport deal defends Ginandjar

Official behind Freeport deal defends Ginandjar

JAKARTA (JP): Coordinating Minister for Economy, Finance and
Industry Ginandjar Kartasasmita has been given the support of a
former subordinate in his fight to clear his name of allegations
of malfeasance in the award of a contract of works to copper and
gold mining company PT Freeport Indonesia.

Rachman Wiriosudarmo, who led the Ministry of Mines and Energy
team charged with renegotiating Freeport's contract, said on
Friday that he had seen no evidence that Ginandjar helped the
Bakrie Group purchase a 10 percent stake in Freeport Indonesia.

"I know that Ginandjar and (Bakrie's chairman) Aburizal Bakrie
were close friends. But, I don't think Ginandjar helped him to
purchase the stake," Rachman told The Jakarta Post on Friday.

Rachman served as the ministry's director in charge of
supervising mining enterprises from March 1989 to Sept. 1991, a
key position in the issue and renegotiation of contracts of
works.

Freeport, currently 80 percent owned by the United States
copper and gold mining company Freeport McMoRan Copper & Gold,
holds rights to exploit the world's largest copper and gold
reserves in Irian Jaya.

Jeffrey A. Winters, a professor of political economy at
Northwestern University in Chicago, USA, said earlier this week
that Ginandjar had colluded with Aburizal to help the latter
acquire a stake in Freeport while he served as minister of mines
and energy from 1988 to 1993.

Winters' allegations have upset Ginandjar, who has denied any
wrongdoing.

Meanwhile, the police are still collecting evidence to charge
Winters with defaming Ginandjar and the Indonesian government
following an order from President B.J. Habibie. However Winters
has already left the country.

Rachman said that prior to renewing the contract of works in
December 1991, Ginandjar had sent a letter to then minister of
finance J.B. Sumarlin offering the government the chance to
increase its share in the company from 9 percent to 20 percent.

"Had Sumarlin accepted the offer, we would have put a clause
in the renewed contract obliging Freeport McMoRan to sell up to
20 percent of Freeport's shares to the government or state
enterprises," he said.

"But Sumarlin was only ready to increase the government's
stake to 10 percent so we put a clause in the contract which
permitted national companies to buy the remaining 10 percent of
the shares," Rachman said.

Rachman said Freeport approached several indigenous
businessmen, including Aburizal and Setiawan Djody, the chairman
of the diversified Sedco business group, to see if they were
interested in buying the 10 percent stake.

"It seems however that only Aburizal had enough cash to make
the purchase," Rachman said.

In a related development, Secretary General of the Ministry of
Mines and Energy Joko Darmono indicated on Friday that the
government would renegotiate Freeport's contract of works if it
found that graft had contributed to the awarding of the contract,
adding that the contract contained a clause which would justify
any such action.

Winters defends

Winters threatened with arrest by Indonesian authorities,
Thursday defended his charges that the person spearheading the
country's anti-corruption campaign is himself tainted by
corruption.

On Thursday, Winters said there was extensive evidence that
Ginandjar had engaged in corrupt practices - including a
questionable business deal involving U.S. mining giant Freeport
McMoRan Copper & Gold Inc. - and challenged Indonesian
authorities to investigate.

To back his claims, Winters pointed to his own research, as
well as an extensive report prepared by Indonesian think-tank
Econit detailing the evidence against Ginandjar.

"This is a report written by a team of the most professional
economists Indonesia has," Winters said in an interview with Dow
Jones Newswires.

"Based on that careful report, I really think that any
attorney general anywhere would want to look into this. In
Indonesia, however, the reaction is to threaten and intimidate
the person who raises the question."

On Wednesday, Justice Minister Muladi said that foreigners who
insult a Cabinet minister could be arrested under Indonesian law.
By midday Thursday, however, the Indonesian embassy in Washington
had not received any notification of an order to arrest Winters
or bar him from the country.

"As far as I know, we have not received any formal
notification, so we think (the process) is not finished," said
Mahendra Siregar, first secretary at the embassy.