Subject: NYT: A Widow Who Won't Let Indonesia Forget

Also: Korea offers to sell subs to Indonesia; New York Urges U.S. Inquiry in Mining Company's Indonesia Payment

New York Times Friday, January 27, 2006

A Widow Who Won't Let Indonesia Forget

By JANE PERLEZ and RAYMOND BONNER

JAKARTA — In a conference room of the national police headquarters here, Patsy Spier last week once again relived the attack that robbed her of her husband on a Saturday afternoon in 2002 in remote Papua Province.

In more than six hours of questioning by Indonesian police investigators, she described how attackers fired into the convoy carrying her, her husband and eight other Americans up a mountain road inside the concession of Freeport-McMoRan, an American mining company.

Then she repeated her pitch for justice.

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"I emphasized that whoever carried this out knew what they were doing," Mrs. Spier said in an interview last week, when she returned to Jakarta at the time of a breakthrough in the case with the detention of eight suspects. "It wasn't just a few minutes, it wasn't just a gun getting away, it was repeated shots. They were going to kill someone that day."

The ambush killed her husband, Rickey Lynn Spier, another American teacher, Edwin Burgon, and an Indonesian teacher, Bambang Riwanto, and snarled efforts by the Bush administration to strengthen military relations with Indonesia. It also raised questions about payments by Freeport, based in New Orleans, to the Indonesian Army, which patrolled the road, and whose soldiers are suspected of involvement.

Not least, the case placed Mrs. Spier, who will turn 48 Monday, at the center of strained United States relations with Indonesia over the incident, making her an accidental ambassador for justice on a nearly four-year quest to untangle who was behind the killings.

In Washington, Mrs. Spier's mettle — she has made 17 trips from her home in Colorado — won her access to high officials, including John D. Ashcroft, during his tenure as attorney general. In Jakarta last week, Mrs. Spier, a former Peace Corps volunteer in Sierra Leone who later traveled the world teaching with her husband, met with the Indonesian president, Susilo Bambang Yudhoyono, their second encounter.

Widows with horrific stories of violence abroad are not unusual in Washington. But Mrs. Spier has struck a chord. She said she tracked down every lead to seek a full investigation of the case, which at times seemed at risk of dying, amid resistance by the Indonesian government to the F.B.I.

Even today, the pursuit of the connections the case might have with Indonesia's military is likely to clash with the warming of military ties between the Bush administration and Indonesia in the last 18 months.

"If Patsy hadn't stuck with it, I'm not at all sure we'd be where we are today," Matthew P. Daley, a former deputy assistant secretary of state and one of the first people she called on, said last week.

This month, the F.B.I. arranged for the surrender in Papua of 12 men in the killings, including Anthonius Wamang, a member of a Papuan separatist group, who was indicted by a federal grand jury in Washington in June 2004.

Four of the men were freed, and the others are in custody in Jakarta.

Those in custody are expected to be charged, lawyers in the case said.

One of the suspects is 14, another 15, a list provided by a Papuan human rights group says. All are supporters of the Papuan separatist movement, a police investigator said.

The arrests and the promise by the Indonesians of a fair trial still leave unanswered who planned the attacks, what the motives were and whether Indonesian soldiers were involved, Mrs. Spier said. To get those answers, she said she had asked President Yudhoyono to allow the F.B.I. to continue in the case and to question the suspects to ensure "a credible investigation." The president "gave his commitment," she said, although the national police chief, Gen. Sutanto, said last week that the F.B.I.'s role was over.

"The police involved in the investigation still believe the military was involved," said an Indonesian investigator who gave The New York Times official transcripts of witness interviews. "But this involves relations between two countries. It will be difficult for the police to dare to say the military was involved."

The evidence of military involvement is largely circumstantial. Mr.

Wamang was close to Indonesian military units in Papua, and was paid by the military for trips to Jakarta, the police investigator said.

After his capture, Mr. Wamang told the police he got the bullets from a senior Indonesian soldier, his lawyer, Albert Rumbekwan, said. The F.B.I. said in a report to a Congressional panel that the assailants had used the same type of automatic rifles used by Indonesia's military.

The ambush occurred between military checkpoints that are only five miles apart. The road falls away at almost an 80-degree angle into a mountainous valley, making it almost impossible for the attackers to have gotten into position without the acquiescence of soldiers on the road, the Indonesian police investigator said, a conclusion shared by Mrs. Spier and American investigators.

The soldiers on the road did not respond to the attack for more than 30 minutes, according to Mrs. Spier and the F.B.I. investigation.

Soldiers came to the rescue after a Freeport executive, Andrew J. Neale, stumbled across the shooting as he was driving down the road and went to the military post for help. He said he had heard "continuous shooting," an official transcript of his questioning by Indonesian police says.

The ambush angered Congress and delayed the renewal of American money for military training for Indonesia for more than two years.

But over the objections of some members of Congress, the Bush administration resumed the training in February 2005 after the indictment of Mr. Wamang. The training had been suspended in 1992 after Indonesian security forces massacred civilians in East Timor in 1991.

In November, the administration waived curbs on lethal arms sales, saying that Indonesia was "a voice of moderation in the Islamic world" and that the F.B.I. had received renewed cooperation in the case.

The preliminary Indonesian police report suggested that a motivation for the attack was a threat by Freeport, which runs the world's largest gold mine in Papua, to cut its payments to Indonesian soldiers. Freeport was giving Indonesian military officers such benefits as nights at the Sheraton hotel, airline tickets and cash, company documents provided to The New York Times show.

In 1998 through 2004, the company gave individual officers and units more than $20 million in cash and benefits, the documents show.

Mr. Spier, the two other teachers who were killed and Mrs. Spier, who was shot in the rib and suffered shrapnel wounds to her back and a kidney, worked at the school run by Freeport for the children of its employees. If the shootings were motivated by the soldiers' wanting more money from Freeport, Mrs. Spier said, she would seek to change laws on corporate behavior abroad.

"If the Foreign Corrupt Practices Act needs to be changed, I want to change it," she said.

She said she expected to attend the trial in Jakarta, though a date is uncertain. If convicted, the suspects could face the death penalty.

"There's a death penalty here," she said. "They knew what they were doing. They chose to kill. The consequences are there."

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The Korea Herald/ANN January 28, 2006

Korea offers to sell subs to Indonesia

SEOUL: The South Korean government officially offered to sell domestically built submarines to Indonesia during talks between the two nation's defense ministers in Jakarta earlier this week, The Korea Herald quoted on Saturdaya military official.

Defense Minister Yoon Kwang-ung and his Indonesian counterpart Juwono Sudarsono on Monday discussed expanding defense cooperation and Seoul's bid to export 1,300-ton class submarines to Jakarta, the official said requesting anonymity.

Yoon's offer will be considered by the Indonesian government, the source said.

"Indonesia is considering buying submarines from Russia, South Korea and China under a plan to acquire 12 of them before 2024," Indonesian navy officials were quoted by AFP.

Jakarta is now planning to beef up its naval forces which have been assessed as relatively weak due to a lack of submarines and frigates.

South Korea purchased eight CN-235 transport aircraft from Indonesia in the mid-1990s.

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Joyo Indonesia News Service
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The New York Times
Saturday, January 28, 2006

New York Urges U.S. Inquiry in Mining Company's Indonesia Payment

By RAYMOND BONNER and JANE PERLEZ

JAKARTA, Indonesia, Jan. 27 — The New York City comptroller has charged that the American mining company Freeport-McMoRan knowingly made "false or misleading" statements about payments to the Indonesian military, and has asked the Securities and Exchange Commission and the Justice Department to investigate.

In separate letters to each agency, the comptroller, William C. Thompson Jr., who is the investment adviser to the city's five pension funds, said that he believed the company might have violated the Foreign Corrupt Practices Act, which forbids American companies to bribe foreign officials.

He also told the securities commission that Freeport-McMoRan Copper and Gold, which is based in New Orleans, might have filed false proxy statements in violation of the Securities Exchange Act.

Mr. Thompson said in the letters, dated Thursday, that he was asking for the investigations based on a report by The New York Times in December, which he said showed that Freeport had paid "large sums of money directly into the personal bank accounts of a number of individual Indonesian Army officers."

Global Witness, a nonprofit human rights organization, had made similar allegations, Mr. Thompson wrote.

Mr. Thompson's request came amid several other calls for investigations into Freeport's payments, including from Sen. Joseph R. Biden Jr., the ranking Democrat on the Foreign Relations Committee, who has long been concerned with corruption in the Indonesian military and its poor human rights record.

Freeport documents obtained by The Times show that from 1998 through 2004 Freeport paid nearly $20 million to individual military and police officers and units in remote Papua Province, where Freeport runs the world's largest gold mine.

More than two dozen commanders, most of them from the army and the police, but also from the navy and the air force, received payments, according to the documents. Some officers were given monthly payments. Some amounted to over $100,000 in a year in a country where a general's annual salary is less than $10,000.

Freeport says the payments were "ordinary business activities" and were within American and Indonesian laws. "The support and assistance for the military and police in Papua includes mitigating living costs and hardship elements of posting in Papua, better ensuring that legitimate security needs are provided to the company," it said in a written response to questions from The Times in December.

The New York City pension funds have in the past challenged Freeport's payments. Mr. Thompson wrote that after the funds filed shareholder resolutions in 2004 and 2005 calling for the company to cease the payments, Freeport told the S.E.C. that the payments were made to the Indonesian government as reimbursement for security services.

In contending the money went to the government and not to individual officers, "the statements amount to a knowingly misleading representation by Freeport," the comptroller said.

In a telephone interview from New York on Friday, Mr. Thompson said, "We had filed shareholder resolutions over the last three years, trying to get the company to account for their actions in payments to the military." In response, he said, the company "tried to prevent us from moving forward with our resolutions."

In his letter to Attorney General Alberto Gonzales, Mr. Thompson said the funds were asking the department "to undertake a formal review to determine if" Freeport had violated the Foreign Corrupt Practices Act.

The funds, one of the largest public pension systems in the United States, own 590,350 shares of Freeport stock — currently worth $37 million — and the funds s were concerned that "possible illegal actions by company officials could have a negative impact on shareholder value," Mr. Thompson wrote.

Asked about the comptroller's letters, Stanley S. Arkin, a lawyer for Freeport, said that the company had nothing to add to what it had already said in its public disclosures. "Our public findings are what our public findings are," he said. "We do not comment on such things."

After the December article, the company posted a letter on its Web site saying the article and a subsequent editorial contained "disturbing and provocative misstatements" about its operations and that the article had "ignored the practicalities of conducting business in a remote area."

The company acknowledged in a conference call with investors two weeks ago that it was under federal scrutiny regarding payments to the military. Executives said they were "fully cooperating" with "informal inquiries from government agencies."

In a statement Friday in Washington, Senator Biden said investigations of the company were needed. "Large payments by Freeport officials directly to individual Indonesian Army officers are highly irregular," Mr. Biden said. "It is time for the Justice Department and the Congress thoroughly to investigate Freeport's business practices in Indonesia."

Mr. Biden said Freeport's conduct threatened to undermine the efforts of the Indonesian president, Susilo Bambang Yudhoyono, who is considered a reformer, to clean up the army.

In Indonesia, Juwono Sudarsono, the civilian defense minister, told the Dow Jones news service that he had asked the inspector general of the defense forces to look into the payments. It was illegal, he said, under Indonesian law for foreign companies to pay soldiers.

A leading Indonesian politician and former presidential candidate, Amien Rais, in speeches and interviews with reporters, has called for Parliament to change Freeport's contract so that the Indonesian government receives what he called a more equal share of the mine's profits.

With gold prices recently surging to a 25-year high of more than $550 an ounce, Freeport said that its profits had more than doubled last quarter and that it would pay the Indonesian government some $1 billion in taxes for 2005.

At the same time, by Freeport's own estimates, its mining operations will generate some six billion tons of waste in Papua before they are through, much of it dumped directly into what was once a pristine river system. Its waste disposal method, the company says, has been approved by provincial authorities.

"I saw where they had demolished a mountain forever, and instead left an ugly lake," Mr. Rais said in an interview of a visit he made to the mine. "I felt humiliated as a son of Indonesia."

In Parliament, members of two separate committees said they would ask Freeport executives to answer questions about the company's payments to the military, its tax payments and the environmental damage around the mine site.

A member of the environment committee, Alvin Lie, said his panel would hold hearings in February to look at the environmental consequences of the gold mine on one of the world's most diverse ecosystems.

A member of the finance committee, Drajad Wibowo, who holds a Ph.D. in economics from an Australian university and was instrumental in uncovering a major Indonesian banking scandal, said he would ask the Ministry of Finance to explain to the panel Freeport's tax and royalty payments.

He suspected, he said, that Freeport was not paying enough taxes. "When a mining company works in its own country it works under very transparent rules," Mr. Drajad said. "Here it is in secret."

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Joyo Indonesia News Service
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