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Comptroller William C. Thompson, Jr., on behalf of the New York City Pension Funds, has sent letters to United States Attorney General Alberto Gonzales and Securities and Exchange Commission (SEC) Chairman Christopher Cox requesting reviews of legal compliance on the part of Freeport McMoRan Copper and Gold.

Thompson's letter to Attorney General Gonzales requests that the Department of Justice conduct a formal review to determine whether Freeport McMoRan's payments to members of the Indonesian military violated the Foreign Corrupt Practices Act.

Recent reports by Global Witness, a London-based human rights organization, and The New York Times have revealed that Freeport McMoRan paid large sums of money directly into the personal bank accounts of a number of Indonesian army officers. Previously, Freeport claimed that payments were made for reimbursement to the Indonesian government for the provision of security services at Freeport McMoRan's mining operations in West Papua .

“While the Foreign Corrupt Practices Act does permit some corporate payments to host countries for such services, the large number of payments reportedly made directly into the private bank accounts of individual army officers raises serious questions as to whether the statute was violated by the company in the instances documented by The New York Times and Global Witness," Thompson wrote.

Thompson further expressed concern that “possible illegal actions by company officials could have a negative impact on shareholder value. I, therefore, urge the Department of Justice to conduct a formal review to determine whether such payments were made by Freeport McMoRan in violation of the Foreign Corrupt Practices Act.”

Thompson's letter to SEC Chairman Cox requests a review to determine whether Freeport McMoRan made false or misleading statements in its 2004 and 2005 proxy statements.

Thompson maintains that Freeport McMoRan may have violated Rule 14a-9 of the Securities Exchange Act, which explicitly prohibits “any statement which, at the time and in the light of the circumstances in which it is made, is false or misleading with respect to any material fact, or which omits to state any material fact necessary in order to make the statements therein not false or misleading.”

In 2004, the New York City Pension Funds sponsored a resolution requesting that the company halt all payments to Indonesian military and security forces. Later that year, in support of its “no action” request to SEC staff, Freeport McMoRan conceded that payments were made to the Indonesian military, but claimed that these payments were made to the Indonesian government solely as reimbursement for the provision of certain security services as permitted under the Foreign Corrupt Practices Act. SEC staff denied Freeport McMoRan's “no action” request.

The Pension Funds filed a similar resolution in 2005, which called for a review of Freeport McMoRan's payments. In its proxy statements for both 2004 and 2005, Freeport McMoRan claimed that the resolution “mischaracterizes our relationships with Indonesian security institutions,” and stated that “the Indonesian government – not our company – is responsible for employing its security personnel and directing their operations. We provide financial support to ensure that the Indonesian government's security personnel (the military and police) are properly fed and lodged, and have the logistical resources necessary to patrol company roads and secure our operations.”

“We believe that these statements amount to a knowingly misleading representation by Freeport that payments were made solely as reimbursement to the government for the provision of security services,” Thompson wrote. “They also raise serious questions about the reliability and integrity of the company's proxy statements, and possible violations of the Securities Exchange Act. I, therefore, urge the Commission to review the matter and determine whether Freeport McMoRan violated Rule 14a-9 under the Securities Exchange Act.”

The Funds hold 590,350 shares of Freeport McMoRan worth more than $32.5 million.

Besides Thompson, the Pension Funds' trustees are:

Fire Department Pension Fund: Mayor Michael Bloomberg; New York City Fire Commissioner Nicholas Scoppetta (Chair); New York City Finance Commissioner Martha E. Stark; Stephen Cassidy, President, James Slevin, Vice President, Robert Straub, Treasurer, and John Kelly, Brooklyn Representative and Chair, Uniformed Firefighters Association of Greater New York; Peter Gorman, President and Captains' Rep., Nicholas J. Visconti, Chiefs' Rep., and Stephen J. Carbone, Lieutenants' Rep., Uniformed Fire Officers Association; and, Joseph Gagliardi, Marine Engineers Association.

Police Pension Fund: Mayor Michael Bloomberg; New York City Finance Commissioner Martha E. Stark; New York City Police Commissioner Raymond Kelly (Chair); Patrick Lynch, Patrolmen's Benevolent Association; Michael Palladino, Detectives Endowment Association; Edwin Mullins, Sergeants Benevolent Association; Anthony Garvey, Lieutenants Benevolent Association; and, John Driscoll, Captains Endowment Association.

NYCERS: New York City Finance Commissioner Martha E. Stark (Chair); New York City Public Advocate Betsy Gotbaum; Borough Presidents Scott Stringer (Manhattan), Helen Marshall (Queens), Marty Markowitz (Brooklyn), Adolfo Carrion (Bronx), and James Molinaro (Staten Island); Lillian Roberts, Executive Director, District Council 37, AFSCME; Roger Toussaint, President Transport Workers Union Local 100; and, Carroll (Carl) Haynes, President, International Brotherhood of Teamsters, Local 237.

TRS: New York City Finance Commissioner Martha E. Stark (Chair); Deputy Chancellor Kathleen Grimm, New York City Department of Education; and, Sandra March, Melvyn Aaronson and Mona Romain, all of the United Federation of Teachers.

BERS: mayoral appointees Schools Chancellor Joel Klein, Alan Aviles, Philip Berry, David Chang, Tino Hernandez, Augusta Souza Kappner, Richard Menschel and Marita Regan; Borough President appointees Jesse Mojica (Bronx), Martine G. Guerrier (Brooklyn), Vivian Farmery (Manhattan), Michael Flowers (Queens), and Joan Correale (Staten Island); and employee members Thomas J. Malanga of the International Union of Operating Engineers, Local 891 , and  Milagros Rodriguez of District Council 37, Local 372.

The letters can be viewed at the Comptroller's web site at www.comptroller.nyc.gov