[nasional_list] [ppiindia] Freeport's shareholders ask military payments probe

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**http://www.thejakartapost.com/detaillatestnews.asp?fileid=20060130175851&irec=0

Freeport's shareholders ask military payments probe 

 

JAKARTA (Dow Jones): The comptroller of New York City,representing shareholders 
of city pension funds, is asking U.S. investigators to determine the legality 
of payments made by mining giant Freeport-McMoRan Copper & Gold Inc. to the 
Indonesian military in Papua. 

Comptroller William C. Thompson Jr. requested both the U.S. Justice Department 
and the Securities and Exchange Commission (SEC) to investigate whether 
Freeport's financial support for security forces on Papua "constitutes possible 
violations of theForeign Corrupt Practices Act (and) the Securities Exchange 
Act," documents obtained by Dow Jones Newswires indicate. 

Efforts to contact an Indonesia-based Freeport-McMoRan spokesman about the 
requests were unsuccessful. 

The requests were prompted by reports from The New York Times and the 
environmental group Global Witness that Freeport directly paid "large sums" to 
Indonesian military officers, Thompson said in a letter dated Jan. 26 to 
U.S.Attorney General Alberto Gonzales. 

"(Freeport) had previously claimed that it made payments to reimburse the 
government for the provision of security services at Freeport's mining 
operations in West Papua," the letter said. 

"While the Foreign Corrupt Practices Act does permit some corporate payments to 
host countries for such purposes, the large number of payments made directly 
into the private bank accounts of individual army officers raises serious 
questions as to whether the statute was violated." 

The letter says the comptroller is the custodian and investment adviser of the 
five New York City Pension Funds, which hold 590,350 shares in Freeport-McMoRan 
common stock. 

Thompson's Jan. 26 letter to SEC Chairman Christopher Cox asked for a probe of 
Freeport-McMoRan's Indonesian military payments to determine if the firm 
violated the SEC's Rule 14a-9 "by making false or misleading statements in its 
2004 and 2005proxy statements." 

The requests reflect the fallout of a New York Times report last month that 
Freeport-McMoRan made payments of nearly US$20 million to military and police 
officials posted around the company's massive Grasberg gold mine in remote 
Papua province from 1998 to 2004. 

Those allegations were first disclosed in Global Witness's "Paying for 
Protection" report in July 2005. 

Freeport-McMoRan has said it gave "financial support" to Indonesian security 
officials in Papua for items including infrastructure and logistics, according 
to a letter by the company's chief executive, Richard Adkerson, posted Jan. ll 
onthe company Web site. 

Minister of Defense Juwono Sudarsono said Wednesday he has ordered an 
investigation of Freeport-McMoRan's military payments on Papua to determine if 
the firm broke the law. (**


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