Friday, September 23, 2005

Bush, a gold swindle in Indonesia, and a 'dead' geologist who may still be alive.


The largest gold mine in the world was supposed to be the Busang goldmine in East Kalimantan.

A firm called Barrick Gold Corp, linked to former President Bush, wanted to get control of the Busang mine.

'Former President Bush is Barrick Gold Corp.'s chief lobbyist, a stockholder in Barrick, and honorary senior adviser to Barrick's international advisory board.'

The nominal chief of Barrick Gold was Peter Munk, a Hungarian Jewish immigrant.

Also linked to Barrick gold was Suharto's daughter Siti Rukmana.

Also taking an interest in controlling the Busang mine was Freeport McMoRan, linked to Henry Kissinger.


Gold Swindle Geologist Still Alive?

Posted by: Roy Tupai on 08, 23 2005 at

In 1996, a little known Canadian mining company called Bre-X pulled off one of the biggest gold swindles in history when it claimed to have discovered the mother of all motherlodes in Kalimantan.

Investors lost billions when the claim proved to be fraudulent. The geologist on the project, Michael de Guzman, allegedly killed himself by leaping from a helicopter just as the scandal unfolded. Perhaps not.

De Guzman, a Filipino who was constantly traveling, had several wives scattered across Indonesia and the Philippines. One of them, Genie, has told Singapore’s Straits Times that her husband is still alive and has twice sent money to her bank account since disappearing eight years ago.

According to Indonesian authorities, de Guzman jumped to his death from a helicopter at a height of 250 meters on March 19, 1997, while on his way to Bre-X’s celebrated Busang mine in East Kalimantan province.

On March 23, authorities announced that police searchers had pulled a decomposed and severely mangled body from a swamp in the area where de Guzman allegedly fell. Much of the body had been eaten by wild pigs; the brain, nose, internal organs and genitals were missing; the jaw was smashed and only two teeth – upper molars – remained.

Autopsies in the East Kalimantan capital of Samarinda and the Philippine capital of Manila identified the body as that of de Guzman. But many skeptics were unconvinced because of disputes over the veracity of dental and fingerprint records. The body was cremated before any DNA tests could be carried out.

On April 9, 1997, Indonesian authorities announced that de Guzman had committed suicide because he had contracted hepatitis B. The geologist’s relatives were extremely doubtful of this claim. Authorities never raised the possibility that de Guzman might have killed himself because on May 19 he had been due to meet with the top geologist of US-based gold mining firm Freeport McMoRan Copper & Gold, which had discovered that Busang was a massive hoax.

The Straits Times article, published on Monday (22/8/05), quoted Genie as saying de Guzman had telephoned their Jakarta residence in April 1997, six weeks after he allegedly committed suicide.

She said their elderly maid nearly dropped the telephone when she heard the geologist's voice. "Mike said it was just after dawn where he was and that he had just woken up," she was quoted as saying.

The geologist reportedly told the maid to inform Genie to check her Citibank account, which she later discovered had received a $200,000 deposit.

Genie said she heard nothing from her husband again until this year when she received a fax from Brazil that $25,000 had been deposited into her Citibank account on February14, Valentine's Day. She said the money was drawn from a Brazilian branch of Citibank. "There's a feeling I have that he's been communicating with me. My job has been to look after the children," she said, referring to their 18-year-old daughter Paula and 8-year-old son Michael Junior.

The indigenous Dayak woman originally from Kalimantan said she believes her husband will soon emerge from hiding “in a few months” because “the longest any secret should be kept is eight years”.

Genie also told the Straits Times that her husband was summoned to the presidential palace in 1996 by then dictator Suharto and his tycoon associate Muhammad ‘Bob’ Hasan to discuss the ownership of the Busang mine. “After that, he realized he had a big problem on his hands… Essentially, they wanted to take over the mine. He had the impression they wanted it for free.”

Bre-X’s claim in February 1996 that Busang contained more than 40 million ounces of gold drove the company’s share price to more than $200 (from a mere 30 cents when the company had begun trading) and total market value to beyond $4 billion.

The announcement also sparked a shameless battle of greed within Suharto’s inner circle. Two of his children, Siti Hardiyanti ‘Tutut’ Rukmana and Sigit Harjojudanto, as well as Bob Hasan, all began squabbling over a substantial slice of the Busang action.

In February 1997, a deal was eventually reached with Freeport McMoRan (linked to Henry Kissinger) taking 15% of Busang, Bre-X keeping 45%, Hasan snaring 30% and the Indonesian government 10%. At the same time, Bre-X raised its estimate of the Busang deposit to 71 million ounces. But bringing Freeport on board meant the veteran company would soon begin its own due-diligence drilling at Busang and discover “insignificant amounts of gold”.

Within two months it was revealed that Busang’s core samples had been salted with gold and Bre-X’s shares plummeted. The company soon collapsed and was wiped off the market.
David Walsh, the chain-smoking and heavy-drinking chief executive officer of Bre-X, died in June 1998 at age 52 from a brain aneurysm in a Bahamas hospital. An interesting interview with Walsh after de Guzman's death can be read on the Internet Archive.

In March 2005, Bre-X former chief geologist John Felderhof, made his first appearance in court on charges of insider trading and misleading investors. He is accused by the Ontario Securities Commission of selling $84 million worth of Bre-X stock between in 1996 while having “negative inside information” not disclosed to investors.



Post a Comment

<< Home