Former Indonesian Minister Energy and Mineral Resources Sudirman Said Accused There is a Fraud on Freeport Deal - Photo by TheInsiderStoris

JAKARTA (TheInsiderStories) – Former Indonesian Minister of Energy and Mineral Resources, Sudirman Said, accused there is a fraud on the PT Freeport Indonesia (PTFI) deal. Before the decision, he said, there is a secret meeting between President Jokowi Widodo and James R. Moffet, chairman of Freeport McMoran Gold & Copper Inc., (NYSE: FCX) at the State Palace on October 2015.

He suspected that the meeting was to obtain investment certainty and the forerunner to the extension of PTFI licenses in Papua. Said revealed this in Jakarta on Wednesday (02/20).

He talked about the Oct. 7, 2015 letter, which gave an extension of the contract permit to the PTFI. Said denied the letter on his initiative because the letter could come out because it was ordered by Widodo as President of Indonesia.

“I told the chronology on Oct. 6, 2015 at 08.00 a.m, I was called by the president’s aide to come to the palace. About 8.30 a.m. I came to the palace. Then sit 5 to 10 minutes, go straight into the President’ office,” Said said.

He continued, a fairly important meeting of the president through a personal assistant said if the meeting seemed to have never existed. The cabinet secretary and the secretary of state who recorded every president’ schedule also did not know the meeting, he added.

“Before entering the work room, I was whispered by the president’ personal assistant, the Minister of this meeting was not there. I do this [express] solely so that the public knows,” said the member of Prabowo Subianto’ camp.

He also obeyed the message delivered by the president’ personal assistant. Then Said entered the meeting room at the State Palace. Arriving at the meeting room, Said was surprised at Moffet, who was the boss of Freeport McMoran there.

“Not at length the president said ‘please prepare what kind of letter is needed. We think we are maintaining the continuity of the investment later to be discussed after this meeting ‘. I replied Yes sir,” Said telling what Widodo ordered.

At the meeting, Moffet drew a draft on the continuity of the PTFI‘ investment. However, Said didn’t want to, he also chose to make a draft whose position was more favorable to Indonesia.

“I say to Moffet this is not how I work. If I follow your draft, then there will be a state precedent dictated by the corporation. And I will make a draft that protects the interests of the republic, “he said.

After a meeting with Moffett, Said immediately delivered the draft to Widodo. At that time president was called to approve, even though according to Said, the draft only benefited Freeport Mcmoran, not Indonesia.

“Do you know what the President’ comments are?” He said, “How come you want this? If you want to be stronger, you just give it.” So maybe that morning, I didn’t take part in the discussion, I came to write, and I didn’t Who knows before that meeting. So I was told to write a letter with this level safe, not destructive. ”

“But Mr. President said ‘how come this doesn’t want to be’, so maybe on the 7th, there might have been a stronger commitment, which said the letter strengthened their position, and weakened our position,” noted by him.

Said assessed that the meeting between Widodo and Moffett was not a normal meeting like an ordinary meeting. Because, after the draft was approved by the president, the FCX‘ stock figures rose.

Said’ claim was denied by Widodo. During this time, the meeting with the Moffet, he admitted, had been carried out many times, but it was never closed and confidential.

“Not once or twice, I found it, how come the person quietly. Yes, I met back and forth, I didn’t see it once or twice […] if the meeting must be said, it’s not quiet. There is just one,” said Widodo yesterday.

He noted, their meeting often spoke of the extension of the work contract. However, he admitted that he always refused firmly and wanted the shares returned to the state.

PTFI also responded to Said’ statement. Spokesman Riza Pratama on Wednesday admitted he did not know the meeting and Moffet’ schedule to Indonesia.

US Legal Threat

If Said’ claims and allegations are true, Freeport must prepare to face the United States (US) judicial law, its place of origin. The US is known to be very strict in monitoring the business activities of their companies operating abroad. All company financial reports are routinely checked to ensure that there are no transactions that violate the rules.

The US issued a State Law on The Foreign Corrupt Practices Act (FCPA). This law has two main provisions, namely discussing the transparency requirements of accounting based on the Securities Exchange Act of 1934 and regarding bribery of foreign officials.

The FCPA has been implemented since 1977 and applies not only to US companies operating in other countries, but also to foreign companies operating throughout the United States including individuals.

In the law the US government prohibits companies or individuals from influencing the decisions of other state officials by using something of value, directly or indirectly. Something worth interpreting such as cars, jewelry, travel costs, money, shares, and so on.

In addition, the law also prohibits companies from encouraging local governments to take actions that violate their duties or influence officials in making decisions to help companies obtain or protect businesses, or obtain undue profits.

In order to avoid the above, in the Act the US government requires companies to create and store books and records that accurately and fairly reflect corporate transactions and design and maintain an adequate internal accounting control system. The government prohibits individuals and companies from consciously falsifying books or company transaction records.

Those who violate can be subject to criminal or civil penalties imposed by the Department of Justice (DOJ) and the Securities and Exchange Commission (SEC). DOJ is a criminal law enforcement agency and is responsible for criminal enforcement related to deliberate bribery and violations. Whereas the SEC is a civil law enforcement agency responsible for filing civil claims.

A company can be dragged into criminal and civil law or it could be just criminal law, for example what happened to Daimler, a German car manufacturer that overshadowed Mercedes Benz in 2010. The company whose shares are traded on the US stock exchange is known to practice bribery to foreign government officials in 22 countries including Indonesia.

Daimler was dragged in criminal and civil cases paying a fine of $93.6 million related to the DOJ’s investigation and $91.4 million related to the handling of cases by the SEC. The Aegerio biopharmaceutical company based in Massachusetts is the same. They had to pay a fine of $4.1 million after an SEC investigation and found the company committed fraud related to prescribing drugs to patients in 2013.

Written by Lexy Nantu, Email: