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DJ New York Freeport Hldrs Ask Indonesia Army Payments Probe(Comtex Business Via Thomson Dialog NewsEdge)JAKARTA, Jan 29, 2006 (Dow Jones Commodities News Select via Comtex) --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. (FCX) to the Indonesian military in Papua. Comptroller William C. Thompson Jr. requested both the U.S. Justice Department and the Securities and Exchange Commission to investigate whether Freeport's financial support for security forces on Papua "constitutes possible violations of the Foreign 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. "We are concerned that possible illegal actions by company officials could have a negative impact on shareholder value," the letter said. 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 2005 proxy statements." The requests reflect the fallout of a New York Times report last month that Freeport-McMoRan made payments of nearly $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 on the company Web site. Indonesia's 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. Freeport-McMoRan's military payments were likely a "misunderstanding" of legitimate corporate support for security facilities rather than graft, Indonesia's official Corruption Eradication Commission chairman, Erry Riyana Hardjapamekas, told Dow Jones Newswires Sunday. But he said evidence of bribery by the firm would bring a wider government probe. "We'll see (the defense ministry) report, and their findings can be the basis for an investigation if there is a necessity for that," Hardjapamekas said, without elaborating. Corporate Web Site: http://www.fcx.com Organization Web Site: http://www.globalwitness.org -By Phelim Kyne; Dow Jones Newswires; 62 21 3983 1277; [email protected] (END) Dow Jones Newswires 01-29-06 0620ET |