The Six Billion Dollar Gold Scam: 3. The battle for Busang - World of Secrets

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[00:00]
Podcast Host
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[00:06]
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[01:05]
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[02:09]
Suzanne Wilton
From the BBC's investigations podcast World of Secrets, here's the third episode of our guest season, the $6 billion gold scam from the BBC World Service and CBC.
[02:25]
Dave Potter
Well, the first trip that I made out there was sort of a familiarization trip. We needed to do some work. We needed to find out what exactly was going on, just to kind of get a feel for the place and to meet the people.
[02:45]
Suzanne Wilton
Dave Potter was a geologist with Freeport, a big US Mining company. He wanted to check out the mine site in case Freeport made a deal with Preax. He choppered out to Busang when I.
[02:57]
Dave Potter
Got off the helicopter, I looked at the camp and the camp was pretty well squared away. I was pretty impressed with the job that they'd done. It was obviously a camp that they'd been in for a while and they turned it into a home, if you will. There was a lot of busyness around the camp, people coming and going. And the first night we had dinner together and as geologists will, we drank too much beer and told lies to each other, which was a good start.
[03:30]
Suzanne Wilton
And things on the ground looked good, at least at first.
[03:36]
Dave Potter
When I first went out there, I was fairly happy that, yeah, this looked like a typical exploration effort and something that we had seen before and would see again. And this was a good start.
[03:48]
Suzanne Wilton
He spent some time with the two men at the heart of the BRE X operation.
[03:52]
Dave Potter
John Felderhoff was there, Michael de Guzman, but he was really quiet and he kinda came in and out. We had a good meal together and spent a lot of time talking about the geology and the deposit. And John spent a lot of time telling us how it was, you know, the greatest thing since sliced bread. And I remember John told us about his birthday present at that point in time. His wife had bought him a. I think it was a Lamborghini. And he was quite excited about that and showed us pictures of it. So we had. Yeah, it was an interesting evening.
[04:32]
Suzanne Wilton
Then Dave Potter asked to look at the gold core samples taken from the mine.
[04:37]
Dave Potter
That's exactly right. I wanted to look at some of the core that was in the sheds there. I was a little disappointed because there wasn't a lot of core. Most of the core that they had came from the initial. The early drilling that they'd done. I was somewhat surprised that they didn't have more examples of what they were drilling because they just drilled thousands of meters of rock. And I was surprised that there wasn't more core available to look at.
[05:05]
Suzanne Wilton
Not a huge red flag for Potter, but something felt a little off still. This was one of the largest gold deposits in history. Freeport wasn't the only mining company focusing their attention on the discovery. A fight was brewing. Huge money was at stake and some powerful people were willing to do whatever it would take to get their hands on it. I'm Suzanne Wilton and from the BBC World Service and CBC, this is the $6 billion gold scam a about the lengths people will go to in pursuit of getting rich and how greed can obscure the truth. This is episode three, the Battle for Busang. So I'm walking down this beautiful street which has an incredible canopy of trees and vines and towering palms. This is Chandana street, and it's the heart of Jakarta power and wealth. And it's also the home of the Suharto family. On my left, I'm passing Suharto's house. It's bright lime green with clay roof and quite spread out. Multiple cars in front and, of course, security at the front of the house. And this is in the heart of Jakarta, the heart of the business district and the seat of government just streets away. There are rumors in this area that there are tunnels underneath these houses that connect them together. And, you know, you can just imagine the intrigue and the deals done behind these closed doors. I wonder if Mike de Guzman or John Felderhoff or others walked these streets in making a deal with the Suharto family over the players vying for a piece of the pie.
[07:23]
Dave Potter
Everything went through Suharto. And what I mean by everything is you could not do business there unless.
[07:30]
Suzanne Wilton
You go through Suharto.
[07:31]
Richard Jacobson
So he.
[07:32]
Dave Potter
He literally had very, very ironclad control.
[07:36]
Richard Jacobson
Over the whole country.
[07:38]
Suzanne Wilton
Richard Jacobson worked for a private investigation company in Hong Kong and was based in Indonesia. He's no stranger to intrigue. Before he started working in private investigation, he was a CIA agent.
[07:51]
Dave Potter
You couldn't do anything there without the Suharto blessing it. And it was very centralized.
[07:59]
Suzanne Wilton
So what did that mean for BRE X? As this company started to skyrocket and the projections got bigger and bigger, it.
[08:08]
Dave Potter
Obviously meant that it came to Suharto's attention. And that's when the Suharto family became involved with BRICS.
[08:18]
Suzanne Wilton
Suharto came to power in 1967. He was complicated and charismatic. He boosted the economy, opening up the country to foreign investment. But his rule was known for widespread corruption and repression, and some say even worse. One interview that stuck with me was with Simon Szembiring, the former director general of the mining department in Indonesia. He told me that speaking out about what he saw going on behind the scenes at the time could have been deadly.
[08:58]
Richard Jacobson
I should be honest to you. I'm afraid to tell somebody about this.
[09:04]
Suzanne Wilton
They can kill me.
[09:06]
Richard Jacobson
Money is very, very dangerous.
[09:11]
Suzanne Wilton
Okay, so actually, we'll start by just asking you to give your first and last and what your role was with.
[09:18]
Brian Coates
BRE X. Hi, I'm Brian Coates. I was vice president and. And corporate controller at Bre X. Brian.
[09:26]
Suzanne Wilton
Coates joined Bre X in July 1996. Almost straight away, he found himself thrown into an escalating situation in Indonesia.
[09:36]
Brian Coates
I mean, the nickname of Mrs. Suardo was Mrs. 10%.
[09:41]
Suzanne Wilton
What did that mean?
[09:42]
Brian Coates
And that didn't talk about how much tip she left when she went to the restaurant was how much ownership she would have in ventures.
[09:53]
Suzanne Wilton
Fending off the Indonesian government was always going to be difficult. But Brex had an added problem. Their mining permit for Busang was set to expire. When it did, Suharto brought work to a grinding halt. Brex did not own the rights known as a title to the land in Busang. The Indonesian government did. If they wanted another permit, Briex was told it needed to share the mine with another company and this company would be chosen by the government. This company would then send money to Suharto. The best BRE X could hope for was to influence the company chosen and to keep a decent percentage of the mine. That's when Peter Monk enters the story. Monk had built his company, Barrick Gold Corporation, up from nothing into the biggest gold business in the world. Sensing an opportunity, he made his way to Jakarta and took over the whole top floor of one of the city's five star hotels. Exploration geologist Jim Richards was based in Jakarta during this time.
[11:16]
Brian Coates
Their sole mission was to hunt down John Felderhoff and do the deal. And he was doing the sweetener job on Tommy Suharto. Peter Monk was moving heaven and earth to get John Felderhoff into his office. And he wasn't the kind of guy that you could say no to either, particularly in Indonesia with Tommy Suharto next to you. So John Felderhoff, he had gone to ground and you couldn't find him for love nor money. Nobody knew where he was. And that was a kind of crazy environment that was going on in Jakarta at that time. People were hunting people and looking for people and have you seen him? And it was like that.
[11:57]
Suzanne Wilton
Monk liked to pepper his speeches with sayings. One of his favorites was, quote, life is about meeting objectives. Sometimes your objectives cross other people's. Then you have to fight and fight to win. As BRE X's new vice president, Brian Coates, was to negotiate with the Indonesian government and Barrick Gould.
[12:25]
Brian Coates
Right away there was. We were right in the middle of discussions. Barrick had expressed interest and the dance started.
[12:34]
Suzanne Wilton
And when you talk about the dance, who was leading?
[12:37]
Brian Coates
The leading candidate to be was Barrick.
[12:40]
Suzanne Wilton
And these are very sophisticated players. We're talking Peter Monk with, you know, political leaders. How did that stack up against David Walsh?
[12:52]
Brian Coates
So obviously Barrack had probably the best group of people around the table advising Mr. Monk. At that point in time, former Canadian Prime Minister Mulroney was On the international committee and on the board, George Bush. Former President Bush, the father was an advisor to the company and a number of other prominent worldwide businessmen.
[13:18]
Suzanne Wilton
Barrick had gotten one of their board members, former U.S. president George Bush Sr. No less, to send a letter to President Suharto recommending he do the deal with them.
[13:34]
Jim Bob Moffett
Just try to connect to Monk now. Sure.
[13:38]
Richard Jacobson
Just a sec. Hang in. Okay.
[13:41]
Jim Bob Moffett
Mr. Monk, are you there?
[13:43]
Richard Jacobson
I'm speaking. I'm here, Rich.
[13:45]
Jim Bob Moffett
Yes, hello.
[13:46]
Richard Jacobson
Hello there. How are you doing?
[13:47]
Jim Bob Moffett
How are you, Mr. Monk?
[13:48]
Suzanne Wilton
Journalist Richard Behar, who shared the BRE X tapes with us, kept a recording of an hour long interview with Barrick Gold's Peter Monk in which Monk talks about his fight for BRE X. In the archive interview, Monk was keen to play down the influence of Bush's letter.
[14:05]
Richard Jacobson
But to me it was such a childish thing to assume that a multi billion dollar project, a project of this importance to the national economy of Indonesia will be determined or given or not given by letter, an ex president's rights to somebody. I mean, such a childish thing.
[14:23]
Jim Bob Moffett
What does Bush get paid to be.
[14:25]
Andrew Neill
On your international board?
[14:26]
Richard Jacobson
Nothing.
[14:29]
Suzanne Wilton
Monk was annoyed that people latched onto this one letter thinking it would be powerful enough to win him the mine. He didn't just rely on letters. Monk went directly to the Indonesian government, hoping to get to the front of the queue. He started to play the game from the smart end, the Indonesian end. Getting inside the politics of an authoritarian regime.
[14:58]
Brian Coates
I would say it was intense on the side of Barrick. Barak had lined up some support in some discussions, you know, so that was a challenging aspect there, was there.
[15:12]
Suzanne Wilton
What was challenging about that?
[15:13]
Brian Coates
Well, Barry certainly had some relationships with the Minister of Mines, Sujanna and one of his advisors, Ganto, who was in the background and a fixer. But there was a lot of controversy. There's also rumoured to have been some dinners in Toronto where the Minister of Mines was there receiving letters from Barrick and also expressing interest to the government of Indonesia that they would like to participate in the development of this world class ore body.
[15:49]
Suzanne Wilton
So they were trying to secure their.
[15:50]
Brian Coates
Position, certainly means by which we were not used to playing.
[15:57]
Suzanne Wilton
In Richard Behar's interview with the late Peter Monk, he brings up a dossier that Barrick allegedly handed to the Ministry of mines.
[16:09]
Jim Bob Moffett
Yeah, about 4 inches of documents to the Ministry and this was information that was damaging to BRE X. And I spoke with an official at the Ministry about this who was. Who reviewed it. And the official believes that this was done to harm Brie X.
[16:32]
Richard Jacobson
Done by whom?
[16:33]
Jim Bob Moffett
By Barrack. He said it was none of barracks business. Why in the world did they come in here, drop this material off? He said that if you want to. If you want to submit stuff like this, put it into a formal report. And I said, why do you think this was done? He says the intention was to hurt and to harm Bre X's relationship with.
[16:56]
Richard Jacobson
The government, I'm afraid, but I have no idea about that.
[16:59]
Jim Bob Moffett
Okay.
[17:01]
Suzanne Wilton
In November 1996, Monk's offer to Bre X was a 75, 25 split. Not in Brex's favor. This was alarming to Bre X. Monk knew that nepotism was the most effective way to win favor with the Indonesian government. So Barak built an alliance with Suharto's daughter, Tutu. Peter Monk tells Richard Behar that he was prepared to use any contact he could to gain access to the decision makers.
[17:27]
Jim Bob Moffett
I think there was a lot of anger. They felt that, and there's been a lot of criticism that Barrack ingratiated itself with the ministry and basically placed itself, you know, at the forefront by hiring the daughter of the dictator there and hiring.
[17:50]
Richard Jacobson
No, no, no, no, Richard. Now, smart. Come on. Don't. No, no, no. I mean, you don't ingratiate yourself by hiring a daughter. You ingratiate yourself. We were selected. You're damn right I ingratiated myself. If I got to sell. We discovered that Bre X was not the owner of that deposit. And we discovered that. I mean, we built our company by doing bids. And for first time in our life, we discovered it was a billion or 2 billion or 3 billion dollar company who did not own the deposit, which the shareholders absolutely were convinced they owned. The title did not belong to them. Well, Christ, who owns the title? Well, the title belonged, lo and behold, according to all the lawyers we sent there to the government.
[18:31]
Jim Bob Moffett
Okay, but it's not unusual for a junior mining company to find things in that country when they have. Well, they had, you know, they had a pending application. They had.
[18:41]
Richard Jacobson
Exactly. There was no title to the. To the deposit. And no analyst ever highlighted that fact.
[18:50]
Jim Bob Moffett
But what was your thinking? Why did. Why was your next step to hire, you know, Hartarto and Tutu? I'm just wondering, what was the thinking?
[19:00]
Richard Jacobson
The thinking was. The thinking was that if you want a gold mine and you find that the company you thought owned it does not own it, and you find out that Mr. X owns it, you go to Mr. X. But Mr. X in this case was the government. And we hired anybody we could. I Mean, we had, I don't know, 18 people there who could help us get to the highest level of government.
[19:24]
Jim Bob Moffett
Because if they don't own it, you want it?
[19:26]
Richard Jacobson
Oh, no, no, no, no. It's clear by the statements of Breacs that they did not have the financial wherewithal. Their plan was to auction. And we did absolutely everything in our power to sell ourselves to the owner. And the owner was the government. And we, you know, the mining minister was in Canada and we looked around and I personally looked around and I mobilized every contact I had, from the banking contacts to the government contracts to put me in touch with people who can get me to the highest level of the government so I can make my pitch at the highest level.
[20:04]
Suzanne Wilton
It seems that BRE X felt they had no choice but to strike back.
[20:12]
Brian Coates
One of the good parts of the story is, I think, how Brie X stood up to large corporate companies that had connections. And we fought back and so we played pretty hard.
[20:24]
Suzanne Wilton
How did that, what did that look like?
[20:26]
Brian Coates
At one point in time we hired President Suardo's son. And I think the credit to that goes from the people that were working at BRE X at the time, from the advisors that were involved. If this is going to be debated at the dinner table on Sundays or Saturday night, we'll get a seat at the table. I guess that was sort of our response.
[20:49]
Suzanne Wilton
Hiring Suharto's son Sighe as a consultant would turn out to be a masterstroke by Briax. But it didn't seem like that at first. Briex going toe to toe with Barrick in the nepotism stakes raised the ante. Intel that could help Barrack secure a deal became very valuable.
[21:08]
Brian Coates
They knew more about us than we knew about ourselves. And that was not just corporately, that was individually.
[21:14]
Suzanne Wilton
How did they do that?
[21:15]
Brian Coates
So they would do by investigating us. You know, there's various incidents that happen. They were par for the course. Barrack had hired Kroll and associates out of New York. Very prominent private investigators.
[21:33]
Suzanne Wilton
With so much at stake and private investigators swarming like flies around breech, paranoia set in. And the paranoia wasn't helped by Walsh claiming there had been a break in at his Calgary office. And two weeks earlier, his wife finding someone rifling through the garbage, all prompting Walsh to send a memo advising employees to shred sensitive materials. This only increased Brian's paranoia.
[22:01]
Brian Coates
I suspect that, you know, they had access to our documents. You know, there's rumors that they were going through our garbage and so on and so forth.
[22:11]
Suzanne Wilton
In 2001, it was disclosed that Barrick had obtained sensitive internal Brex documents via Kroll Associates. How the documents reached Kroll was never explained. They could have been leaked, of course, but these were unprecedented times. We contacted Barrick, Gold and Kroll and put these allegations to them, but they declined to comment. However, in the Breech tapes, Richard Behar asks the late Peter Monk about claims that Barrack hired private detectives to investigate Breek's senior executives.
[22:46]
Jim Bob Moffett
Well, one of the things that I think upset the BRE people was that Barrack had enlisted private detectives to.
[22:56]
Richard Jacobson
I don't know what you're talking about.
[22:58]
Jim Bob Moffett
No, you don't.
[22:59]
Richard Jacobson
I don't know what you're talking about. To get the appointment at this point.
[23:03]
Suzanne Wilton
Richard Behar had already spoken with Randall Oliphant, who at the time was Barrack's chief financial officer.
[23:10]
Jim Bob Moffett
I spoke to Oliphant. He confirmed it. What did they have that Barrack's attorneys used private detectives on whom to dig up information about BRE X and about BRE X executives. And I'll tell you, these private eyes.
[23:25]
Richard Jacobson
But I have never. I have never seen information from BX executives, from private detectives, ever. Never.
[23:31]
Jim Bob Moffett
Private detectives on BRE X executives showed up at BRE X executives homes in Canada and in the Philippines.
[23:40]
Richard Jacobson
To do what?
[23:41]
Jim Bob Moffett
Talked to their families.
[23:43]
Richard Jacobson
To do what?
[23:43]
Jim Bob Moffett
To try to find out who these.
[23:45]
Richard Jacobson
People were when we tried to make the bid.
[23:49]
Jim Bob Moffett
I'm sorry, at the time we tried.
[23:51]
Richard Jacobson
To make the bid.
[23:52]
Jim Bob Moffett
This is during the spring and the summer and even into the fall of 1996.
[23:58]
Richard Jacobson
Richard, I have never, never used, seen or heard or would care what Rollie Francisco's private life is about. Never. I don't know how that could help me or hinder me.
[24:15]
Suzanne Wilton
Brex's chief financial officer, Rolly Francisco, who was leading negotiations at the time, had also spoken about experiencing suspicious activity.
[24:28]
Jim Bob Moffett
Rolly says that every time he went home to Canada, there would be a van staking out his home.
[24:33]
Richard Jacobson
Well, I'm afraid that is something I have absolutely, absolutely zero knowledge of. I would never have authorized and I'm not aware of it.
[24:41]
Jim Bob Moffett
Oliphant said to me that they needed. They want. You know, it's standard procedure during takeovers. And when you.
[24:48]
Richard Jacobson
Yes, in February. We called the takeover off in February.
[24:52]
Jim Bob Moffett
Why did the private eyes continue into this?
[24:54]
Richard Jacobson
I don't know. Believe me, I called the shots here. Do you think, as I told my board, if anybody responsible for this failure is Peter Monk, do you think you.
[25:00]
Jim Bob Moffett
Could inquire about this?
[25:02]
Richard Jacobson
I have no interest.
[25:05]
Suzanne Wilton
It wasn't just allegations of private investigators doggedly following the story. Investigative journalists did their fair share of digging as well. In fact, any break ins and rifling through garbage could have been one of many other interested parties. Investors and analysts were also desperate for Intel. It was like the Wild west and rumor and speculation was part and parcel of such crazy times. This is Ashley K from the Ben and Ashley I Almost Famous podcast. It feels like everyone is talking about GLP1s these days. Those are OIC and Semaglutide. And with Future Health you can find out if they're right for you too. Maybe you feel like you've been struggling with your weight for years and no matter how much you diet and exercise, you just don't feel healthy. Just go to try FH.com to find out if weight loss meds are right for you. Try fh.com future health is not healthcare services provider. Meds are prescribed at provider's discretion. Results may vary.
[26:11]
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[27:15]
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[28:16]
Suzanne Wilton
Brian was already suspicious of private investigators used during hostile takeover bids.
[28:23]
Brian Coates
We knew how they worked and we were also advised that they were working against us at that point in time.
[28:30]
Suzanne Wilton
So was this surprising to you?
[28:33]
Brian Coates
Everything is surprising, I guess, in the BRE X story.
[28:39]
Suzanne Wilton
To compound Briex's stresses, the Indonesian government let it be known that if the Barrick deal went through, they would be taking a 10% share, leaving Barrick with 67.5% of the mine and Brex a measly 22.5%. For a time, the Indonesian government looked to be hot on this deal and tried to force a shotgun marriage between Brex and Barrick. The breech's inner circle, Walsh, Felderhoff and De Guzman were appalled.
[29:10]
Brian Coates
If you look at the Breek story, nobody enjoyed the way Barrack was playing the game. So there was a lot of animosity against Barrack at that point in time. John, being the colorful person that he was, highlighted comments that, you know, the closest thing that Mr. Monk had been to rocks was the scotch and rocks. So we fight today and we're friends tomorrow. You also gotta remember that this was war.
[29:39]
Suzanne Wilton
You've described it very much as the story of David versus Goliath.
[29:44]
Brian Coates
Why it was David and Goliath where you had us as a small company fighting off larger companies that did pretty well to stay in the game.
[30:00]
Suzanne Wilton
Suharto's son Sighet, who was still battling for Breix, gave them what was to become a very valuable bit of advice. He told them to bring Suharto's right hand man, Bob Hassan to the table. Andrew Neill was an observer to the war between Barak and Brex when he worked for the mining company Freeport.
[30:24]
Andrew Neill
Well, this is delving into the realm of soap operas.
[30:28]
Suzanne Wilton
Andrew saw the conflict break out in Suharto's family and with other companies who were trying to muscle their way in by making overtures to more of Suharto's kids.
[30:39]
Andrew Neill
Suharto's family were known as the Chindana family because of the location of their complex. And they all lived together in this massive complex. They still do to a certain extent. And Barak were lobbying the Chindana family and had put a couple of the children on retainers and placer. They retained a couple of the other children to lobby on their behalf. And historically, the Chindana family would have supper together just about every day. The kids were fighting in front of dad and mom to the point that there was a real split coming in the family.
[31:23]
Suzanne Wilton
The Suharto's were in meltdown. The children were bickering over Busang, each one bagged by a different mining company. Barrick had the powerful eldest daughter, Tutu advising them. Bre X had Sighet. And now Placer Dome turned the heads of yet two more. The President needed to find a way out before his family went into free fall. He needed wise counsel. He needed Mohammad Bob Hassan.
[31:55]
Andrew Neill
So my understanding is Bob Hassan, who was a close advisor to Suharto and also a very good friend of Freeport, said to Suharto, you know, you're going to have to resolve this. This is ridiculous. And Suharto asked for his input. And he said, quite frankly, you need to give it to a third party.
[32:13]
Suzanne Wilton
Somewhere within this dogfight, Bob Hassan, an Indonesian timber tycoon and Suharto's closest confidant, not to mention his golfing buddy, spotted a golden opportunity. There was a way here. He could engineer his own slice of the Busang mine. Richard Behar and David Walsh in the BRE X tapes.
[32:36]
Jim Bob Moffett
Let me jump back to Hassan.
[32:38]
Richard Jacobson
Yeah.
[32:39]
Jim Bob Moffett
You had to repair your relationship even before you met him. He had. He had heard things about you.
[32:46]
Richard Jacobson
Well, I think everyone in Indonesia had preconceived ideas that from the disinformation campaign.
[32:53]
Jim Bob Moffett
Do you know what he had heard?
[32:57]
Richard Jacobson
No, but I'm sure I didn't pay much attention to it. But I just knew that the perception of me and Bre X as a company was very poor.
[33:10]
Suzanne Wilton
During the battle for Busang, Barrick discredited BRE X. And Bob Hassan got wind of this, which could be a huge problem for the company. Anyone who wanted in on the deal needed Hassan on their side.
[33:26]
Dave Potter
He was sort of the guy that carried the bag for the. He was the man that the President would send out to make sure that he got what he wanted.
[33:37]
Suzanne Wilton
That's David Potter again, Freeport's chief geologist, who carried out the due diligence at Busang.
[33:44]
Dave Potter
So Bob had a lot of power behind him. He had the President's ear. So people treaded very lightly around him.
[33:53]
Suzanne Wilton
But there were other reasons for treading lightly.
[33:56]
Dave Potter
I don't know that I'd want to cross Bob Hassan. The rumor had it that he was somebody that had the kind of connections that he could make people disappear.
[34:09]
Suzanne Wilton
Luckily for BRE X, Barrick's relationship with Bob Hassan wasn't much better. Hassan and Barrick CEO Peter Monk had never been the best of friends. And then Monk made a wrong move. During a meeting, Monk had put his hand on Hassan's knee. Monk was very tactile and would use endearments like Darling to address people he didn't know very well. Placing his hand on Hassan's knee was a cultural faux pas. Allowing for personal space in Indonesia is a sign of respect. Along with Hassan's dislike for Barak's strategy, Monk's apparent lack of respect was the final straw for Hassan. Barrick was ruled out as a contender. Enter Freeport. The US mining giant had already made one huge gold find in another area of Indonesia. And Suharto liked the company's CEO, a man named Jim Bob Moffat, a former American football player and larger than life Elvis impersonating Texan with a reputation for getting what he wanted. Importantly, Bob Hassan liked him too. Things moved fast. Now, maybe because this was the deal Hassan had always had in mind. He helped close it for Freeport.
[35:45]
Dan Bowman
Suddenly it dropped in Freeport's lap. And I think not. It was really not totally voluntary. I mean, it was assigned. And Moffitt said, okay, we'll do it.
[35:57]
Suzanne Wilton
That's Dan Bowman. He was a vice president at Freeport. And Jim Bob assigned him to sort out the details of the BRE X transaction.
[36:04]
Dan Bowman
Suharto, when he wanted to do something, he would write in the margins of letters, like from ministers. They were called dip notes. And basically the dip note would say, do this. And then it would go down through the chain of authority. And Bob Hassan showed me the DIP note. That was the appointment. And Moffitt couldn't refuse that.
[36:26]
Suzanne Wilton
You don't defy the president. No, no, bad idea, Jim Bob Moffett was another person it was best not to defy.
[36:34]
Dan Bowman
Moffitt and Suharto had a very close relationship. They had similar personalities. They didn't like underlings who expressed doubts about their vision. Moffat always said, are you boys ready to fight an adventure? You know, whenever he would have a new. A new thing to do, which I thought was a great way to put it.
[36:55]
Suzanne Wilton
He sounds like he was an incredible character.
[36:57]
Dan Bowman
He was a. He was really something. He was really, really something. And he was. He scared the hell out of most people. I thought he was one of the funniest guys I ever met because he had this sense of presence and he would mess with people. And if you didn't see the Humor in the situation. You'd think, oh my God, this guy is dangerously unbalanced.
[37:21]
Suzanne Wilton
So with Freeport in, what did that mean for BRE X? A meeting was organized with all the interested parties. This was BRE X's chance to try and rescue as much as they could out of the situation.
[37:35]
Dan Bowman
I was called to a meeting at Bob Hassan's house on February 14, Valentine's Day, 1997. And at the meeting were Jim Bob Moffett and also Bob Hassan. And there was a guy there named Roly Francisco who was the cfo, newly appointed CFO of BRE X. And the purpose of the meeting was to find out, you know, how we were going to split the ownership of BRE X between the various parties. So we walked in and Mr. Moffat was a larger than life character, very colorful, and he was a no nonsense kind of guy. We had about 10 seconds of small talk and he said to Roly Francisco, what do you want? And Roly Francisco said, well, Jim Bob, we want $100 million in cash for this transaction. And without missing a beat, Moffitt said, this could be salted. Get up, boys, we're leaving.
[38:38]
Suzanne Wilton
Wow. Salting is the process of adding gold to a drilling sample to make it look like there is more gold than there is. There's a chance that Moffett had concerns about the validity and the scale of the BRE X find. But more than likely this was just a negotiation tactic.
[38:57]
Dan Bowman
We said, okay, because you never said no to Moffitt. And he got up and he walked out and we trailed behind him. Bob Hassan, who was at the meeting, was shocked and he was trailing behind Moffitt asking what, you know, what's going on? And Mr. Moffett got in his car and drove away. And I went home and kind of bewildered. And at about 1:00 in the morning, Mr. Moffat called me and he said, I know what these A want. They don't think we have the money. So I called my friend at Chase bank and I got a billion dollars. You go tell those we have the money.
[39:37]
Suzanne Wilton
Bob Hassan, Jim Bob Moffat and Brie X eventually came to a deal on Valentine's Day 1997. Bre X's sole ownership of Busang would be no more. The mine was to be split three ways. 45% to Bre X, 40 to Indonesia, and for $100 million, 15% to Freeport. In the BRE X tapes. David Walsh spoke to Richard Behar shortly after the deal.
[40:07]
Jim Bob Moffett
Did you feel that in a way this deal was also forced on you? David, but you didn't really have a choice in the end, Hasan said, this is the way it's going to be. Well, report's coming.
[40:19]
Richard Jacobson
As I said in my press release the other day.
[40:21]
Jim Bob Moffett
No, no, but help. Help me be okay.
[40:23]
Richard Jacobson
No, no, but what I said is exactly the truth. The other day I said other companies. Actually, I wasn't allowed to say what I wanted to say. I toned down the press release, but other companies didn't discover it never spent a dime, carried on negotiations without including us.
[40:41]
Jim Bob Moffett
I mean, did Freeport do a lot of the negotiating without you at the table?
[40:45]
Richard Jacobson
No, they were. They were called in at the last minute. I said I had a talk with Jim Bob and then asked for our okay, and I immediately gave it. And the guys at Freeport have a real passion for. For what they do like we do. They're really energized as, to quote Jim.
[41:07]
Suzanne Wilton
Bob, really energized is right. Freeport. We're thrilled. Paul Murphy from Freeport remembers Jim Bob's announcement to the company's Jakarta office.
[41:22]
Andrew Neill
It was Valentine's Day. I remember that February, I think it was 97. Our chairman, Jim Bob Moffett, called us all together in the Jakarta office and said, hey, guys, I've got a Valentine's Day present for you. I've just struck a deal with Bob Hassan and Bre X. We're going to design, develop and operate this fantastic gold deposit in Kalimantan. It's going to be a change for us, but we have the ability to pull it off. He made it clear from the very beginning, not as an afterthought, but he made the proviso, of course, we've got to do our due diligence. And he turned to Dave Potter, who was the senior exploration geologist at the time, and said, dave, I want you to immediately start this afternoon, get yourself organized, and I want you to start drilling twin holes in the Busan deposit.
[42:15]
Suzanne Wilton
In gold exploration, twinning is a way to check the validity of drilling results. If someone says they have found gold in a particular spot, then you drill a hole right next to it so you can test the sample for traces. If they really found gold, then so should you.
[42:33]
Andrew Neill
So Dave's job was immediately to set up a drill rig and start drilling in the top 10 or 20 richest core samples, to drill a hole within a few feet of the original hole to. To try to duplicate the results. So everybody was very excited. This was going to be a new chapter for us.
[42:55]
Suzanne Wilton
Freeport had sent Dave Potter out to busang once before, but as he prepared to go again, some of the things he'd seen on the last trip were giving him cause for concern. Before Freeport handed over $100 million to Bre X, they needed to be sure what they were getting into. Dave shared his concerns with Jim Bob Moffett.
[43:17]
Dave Potter
I was a little concerned about the lack of core. And he said, yeah, okay. And then I said, well, I think we should drill what I called scissor holes, which we'd get into the line of the cross section that they'd drill and drill back at an angle in both directions so that we would intercept at least 4 of the drill holes that they'd been working in. And he said, well, that may be too much because we want to make this move a little faster. And I said, I really think we ought to do it, Jim Bob. And he finally said, sure, okay, go ahead, do that. If he really didn't think it was a good idea, he wouldn't have let me do it.
[43:56]
Suzanne Wilton
Dave quickly assembled a team of geologists to take out to Busang, including exploration manager Joe McPherson.
[44:04]
Podcast Host
We had our first introduction to, to the BRE X guys just up the street from the former Freeport office, which was across from the Australian Embassy at the time. And it was at 10 o'clock in the morning. I remember this very clearly because we all trooped up there. We're kind of, you know, we're chuffed. We're ready to go. And we went in there and there's a bunch of BRE X guys there. De Guzman was there, Felderhof was there, and, okay, the beer right away, 10 o'clock in the morning. So we were all kind of looking, okay, now what do we do? That's a fact. And we had a couple to be polite, but we kind of bailed pretty early at that time because we felt it wasn't really the right environment to be talking about how we were going to structure the actual due diligence itself.
[44:47]
Suzanne Wilton
So you were there to talk about due diligence for what could be the biggest potential mine in the world. And they're cracking Bintang.
[44:58]
Podcast Host
Yeah, they were cracking the beers at 10 o'clock in the morning. They were very laid back, very confident. You know, there was no sign of anything that was amiss. They were really excited themselves and looking forward to being partners with Freeport. And, you know, it was a good meeting. We were just a little bit, you know, taken aback by the Bintangs on the table at 10 o'clock in the morning.
[45:17]
Suzanne Wilton
What was your first impression of Mike De Guzman and John Felderhoff.
[45:20]
Podcast Host
Michael de Guzman, very quiet, very quiet, soft spoken, didn't say much, clearly knew his geology. John Felderhoff, I would tag more as a promoter type. John was kind of the. He was the main spokesman. He did most of the talking and you can tell that he had been, you know, in, in the business for many years. After the first meeting, we kind of, we kind of circled the wagons again and had a bit more of a discussion, planned our strategy and said, well, we clearly are going to have to push this ourselves. There's nothing that can be hidden, right? So we went into it with that attitude that we were going to ask any question that we thought we had to and ask for data, you know, whatever's necessary to prove the viability of the deposit from a technical standpoint.
[46:08]
Suzanne Wilton
After Barrick, Breecs were going to have a hard time trusting another major mining company. And they were very aware that Freeport might try to cast doubt on the find to drive down the price. Before Dave Potter left Jakarta for Busang, Simon Szambiring from the Indonesian Ministry of Mines reminded him of the responsibility resting on his shoulders.
[46:32]
Richard Jacobson
I said to Potter, this is professional, no hanky panky, because this is very, very sensitive. Man is very, very dangerous.
[46:47]
Suzanne Wilton
Sembirng, of all people, knew just how high the stakes were. Up until now, Bre X had been able to maintain a tight hold over Busang. But with the Indonesian government now directly invested and Freeport on their way to scrutinize Welderhoeff and de Guzman's work, this was to be the critical moment. If anything were to go wrong, if there was to be any question over the mine's value, well, then things would go south very, very quickly. Next time on the $6 billion gold scam. Things start to feel weird at the Busang site.
[47:51]
Dave Potter
Just got kind of quiet. Start getting this kind of a creepy feeling. Something just isn't right. And that's when things started to get interesting for us. People started disappearing. De Guzman disappeared.
[48:08]
Suzanne Wilton
The story of the Breck's fortune begins to unravel.
[48:12]
Podcast Host
So I'm sitting on the side of my bed in the room of the Royal York and I'm holding a $6 billion secret in my hand.
[48:23]
Suzanne Wilton
The $6 billion gold scam is produced by BBC Scotland Productions for the BBC and CBC. I'm Suzanne Wilton. Our lead producer is Kate Bissell. Producers Anna Miles, Mark Rickards Story consultant Jack Kibble White Music and sound design by Hannis Brown. Additional sound design and audio mix by Joel Cox. Executive editor Heather Kane Darling. At cbc, Veronica Simmons and Willow Smith are senior producers, Chris Oak is executive producer, Cecil Fernandez is executive producer and Arif Noorani is the director at the BBC World Service, Anne Dixie is senior podcast producer and John Manell is the podcast commissioning editor. Thanks for listening.
[49:38]
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Summary5 min read

World of Secrets: The Six Billion Dollar Gold Scam – Episode 3: The Battle for Busang

Produced by BBC Scotland Productions for the BBC World Service and CBC

Introduction

In the third episode of Season 7, titled "The Battle for Busang," BBC's World of Secrets delves deep into one of the most audacious gold mining frauds in history—the Bre-X scandal. Host Suzanne Wilton meticulously unpacks the intricate web of deceit, corporate espionage, and political maneuvering that led to the unraveling of what was touted as the largest gold discovery ever.

Background: The Bre-X Gold Discovery

In 1995, Bre-X Minerals announced a monumental gold find in the remote Busang region of Indonesia. This revelation sent stock prices soaring and attracted global investors eager to stake their claims. However, suspicions quickly arose regarding the authenticity of the find, especially after Bre-X’s chief geologist mysteriously disappeared during a helicopter flight over the jungle.

Key Players

Dave Potter (00:02:24): A geologist with Freeport, tasked with assessing the legitimacy of Bre-X’s claims.
John Felderhoff & Michael de Guzman (00:02:52): Core members of the Bre-X operation, central to the unfolding drama.
Peter Monk (00:11:15): CEO of Barrick Gold Corporation, a rival mining company with significant influence.
Richard Jacobson (00:07:31): A former CIA agent and private investigator, providing insights into the political landscape.
Brian Coates (00:09:18): Vice President and Corporate Controller at Bre-X, offering an insider’s perspective.
Jim Bob Moffett (00:13:34 & 00:35:45): CEO of Freeport, a charismatic leader with close ties to Indonesian President Suharto.
Bob Hassan: Suharto’s close confidant and timber tycoon, pivotal in the negotiations between Bre-X and Freeport.

The Initial Investigation and Red Flags

Dave Potter’s initial visit to the Busang site (00:02:24–00:05:04) seemed promising, with a well-established camp and enthusiastic staff. However, subtle inconsistencies started to emerge. Potter was particularly concerned about the limited availability of core samples despite extensive drilling, hinting at potential manipulation.

Notable Quote:
"I was somewhat surprised that there wasn't more core available to look at." — Dave Potter [00:04:37]

These early signs were overshadowed by the immense pressures and high stakes involved, leading to a complex interplay between mining companies and the Indonesian government.

Political Intrigue and Suharto’s Influence

Indonesia’s President Suharto, a formidable and controversial figure (00:07:22–00:08:18), wielded immense power over the country’s economic and political affairs. Any business dealings, especially in the lucrative mining sector, required his blessing.

Notable Quote:
"You couldn't do anything there without the Suharto blessing it." — Richard Jacobson [00:07:29]

This centralized control meant that Bre-X’s skyrocketing success inevitably drew the attention of powerful entities, including rival companies like Barrick Gold.

The Rivalry: Bre-X vs. Barrick Gold

Barrick Gold, under Peter Monk’s leadership, emerged as a formidable competitor aiming to capitalize on the Bre-X gold find. Monk, leveraging his connections and resources, including a letter from former U.S. President George Bush Sr. (00:12:24–00:13:34), exerted pressure on Bre-X to share the Busang mine.

Notable Quote:
"Life is about meeting objectives. Sometimes your objectives cross other people's. Then you have to fight and fight to win." — Peter Monk [00:11:56]

Barrick’s aggressive tactics included hiring private investigators from Kroll Associates to gather damaging information on Bre-X executives (00:22:46–00:24:14), fostering an atmosphere of paranoia and distrust within Bre-X.

Internal Struggles and Negotiations

Bre-X faced immense internal turmoil as they grappled with Barrick’s incursions and the Indonesian government's demands. Brian Coates (00:09:18–00:20:23) recounts how Bre-X stood up to larger corporations, hiring Suharto's son, Sighet, as a consultant—a strategic move to gain favor and negotiate from a position of strength.

Notable Quote:
"We fought back and played pretty hard." — Brian Coates [00:20:23]

The Indonesian government's ultimatum to share the mine’s profits further complicated matters, forcing Bre-X into a precarious negotiation with both Barrick and the state.

The Turning Point: Freeport’s Intervention

The deal took a dramatic turn when Freeport, led by the charismatic Jim Bob Moffett, entered the fray. Moffett’s close relationship with Suharto and his strategic maneuvering led to Freeport securing a significant stake in the mine. A pivotal meeting on Valentine’s Day 1997 (00:37:35–00:39:36) showcased the high-stakes negotiations, culminating in a three-way split: 45% for Bre-X, 40% for Indonesia, and 15% for Freeport.

Notable Quote:
"When you want something, and you find it, you do whatever it takes to secure it." — Jim Bob Moffett [00:35:45]

This deal, however, was marred by suspicions of coercion and manipulation, with Bre-X executives feeling sidelined and betrayed.

Aftermath and the Unraveling of the Scam

Despite the agreement, doubts about the Busang gold deposit remained. Freeport’s subsequent drilling revealed inconsistencies, casting further doubt on Bre-X’s findings. The mysterious disappearance of key Bre-X figures, including Michael de Guzman (00:47:51), intensified the scandal, leading to widespread investigations and a significant loss of investor confidence.

Notable Quote:
"Something just isn't right. And that's when things started to get interesting for us." — Dave Potter [00:47:51]

The fallout from the scam had far-reaching implications, exposing the vulnerabilities within the global mining industry and the devastating impact of unchecked greed and corruption.

Conclusion

"The Battle for Busang" serves as a compelling exploration of corporate greed, political corruption, and the lengths to which individuals and organizations will go to secure unprecedented wealth. Suzanne Wilton, through meticulous research and engaging storytelling, brings to light the complex dynamics and high-stakes maneuvers that defined the Bre-X scandal, offering listeners a gripping narrative of ambition, deceit, and the ultimate unraveling of one of the most significant frauds in mining history.

Notable Quotes:

"I was somewhat surprised that there wasn't more core available to look at." — Dave Potter [00:04:37]
"You couldn't do anything there without the Suharto blessing it." — Richard Jacobson [00:07:29]
"Life is about meeting objectives. Sometimes your objectives cross other people's. Then you have to fight and fight to win." — Peter Monk [00:11:56]
"We fought back and played pretty hard." — Brian Coates [00:20:23]
"When you want something, and you find it, you do whatever it takes to secure it." — Jim Bob Moffett [00:35:45]
"Something just isn't right. And that's when things started to get interesting for us." — Dave Potter [00:47:51]

Credits

The Six Billion Dollar Gold Scam is produced by Suzanne Wilton, with contributions from Dave Potter, Brian Coates, Jim Bob Moffett, and other key figures. The team includes lead producer Kate Bissell, producers Anna Miles and Mark Rickards, story consultant Jack Kibble, and sound design by Hannis Brown, Joel Cox, and others. Executive editors Heather Kane Darling and Veronica Simmons, along with producers Willow Smith, Chris Oak, Cecil Fernandez, and director Arif Noorani, ensured a comprehensive and engaging narrative.

Looking Forward

In the next episode, listeners will follow the unraveling of Bre-X's operations at Busang, exploring the disappearance of key figures and the broader implications of the scandal on global mining practices and investor trust.

Loading summary

Transcript181 lines

[00:00]
Podcast Host
This BBC podcast is supported by ads outside the uk.
[00:06]
Colgate Palmolive Advertiser
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[02:09]
Suzanne Wilton
From the BBC's investigations podcast World of Secrets, here's the third episode of our guest season, the $6 billion gold scam from the BBC World Service and CBC.
[02:25]
Dave Potter
Well, the first trip that I made out there was sort of a familiarization trip. We needed to do some work. We needed to find out what exactly was going on, just to kind of get a feel for the place and to meet the people.
[02:45]
Suzanne Wilton
Dave Potter was a geologist with Freeport, a big US Mining company. He wanted to check out the mine site in case Freeport made a deal with Preax. He choppered out to Busang when I.
[02:57]
Dave Potter
Got off the helicopter, I looked at the camp and the camp was pretty well squared away. I was pretty impressed with the job that they'd done. It was obviously a camp that they'd been in for a while and they turned it into a home, if you will. There was a lot of busyness around the camp, people coming and going. And the first night we had dinner together and as geologists will, we drank too much beer and told lies to each other, which was a good start.
[03:30]
Suzanne Wilton
And things on the ground looked good, at least at first.
[03:36]
Dave Potter
When I first went out there, I was fairly happy that, yeah, this looked like a typical exploration effort and something that we had seen before and would see again. And this was a good start.
[03:48]
Suzanne Wilton
He spent some time with the two men at the heart of the BRE X operation.
[03:52]
Dave Potter
John Felderhoff was there, Michael de Guzman, but he was really quiet and he kinda came in and out. We had a good meal together and spent a lot of time talking about the geology and the deposit. And John spent a lot of time telling us how it was, you know, the greatest thing since sliced bread. And I remember John told us about his birthday present at that point in time. His wife had bought him a. I think it was a Lamborghini. And he was quite excited about that and showed us pictures of it. So we had. Yeah, it was an interesting evening.
[04:32]
Suzanne Wilton
Then Dave Potter asked to look at the gold core samples taken from the mine.
[04:37]
Dave Potter
That's exactly right. I wanted to look at some of the core that was in the sheds there. I was a little disappointed because there wasn't a lot of core. Most of the core that they had came from the initial. The early drilling that they'd done. I was somewhat surprised that they didn't have more examples of what they were drilling because they just drilled thousands of meters of rock. And I was surprised that there wasn't more core available to look at.
[05:05]
Suzanne Wilton
Not a huge red flag for Potter, but something felt a little off still. This was one of the largest gold deposits in history. Freeport wasn't the only mining company focusing their attention on the discovery. A fight was brewing. Huge money was at stake and some powerful people were willing to do whatever it would take to get their hands on it. I'm Suzanne Wilton and from the BBC World Service and CBC, this is the $6 billion gold scam a about the lengths people will go to in pursuit of getting rich and how greed can obscure the truth. This is episode three, the Battle for Busang. So I'm walking down this beautiful street which has an incredible canopy of trees and vines and towering palms. This is Chandana street, and it's the heart of Jakarta power and wealth. And it's also the home of the Suharto family. On my left, I'm passing Suharto's house. It's bright lime green with clay roof and quite spread out. Multiple cars in front and, of course, security at the front of the house. And this is in the heart of Jakarta, the heart of the business district and the seat of government just streets away. There are rumors in this area that there are tunnels underneath these houses that connect them together. And, you know, you can just imagine the intrigue and the deals done behind these closed doors. I wonder if Mike de Guzman or John Felderhoff or others walked these streets in making a deal with the Suharto family over the players vying for a piece of the pie.
[07:23]
Dave Potter
Everything went through Suharto. And what I mean by everything is you could not do business there unless.
[07:30]
Suzanne Wilton
You go through Suharto.
[07:31]
Richard Jacobson
So he.
[07:32]
Dave Potter
He literally had very, very ironclad control.
[07:36]
Richard Jacobson
Over the whole country.
[07:38]
Suzanne Wilton
Richard Jacobson worked for a private investigation company in Hong Kong and was based in Indonesia. He's no stranger to intrigue. Before he started working in private investigation, he was a CIA agent.
[07:51]
Dave Potter
You couldn't do anything there without the Suharto blessing it. And it was very centralized.
[07:59]
Suzanne Wilton
So what did that mean for BRE X? As this company started to skyrocket and the projections got bigger and bigger, it.
[08:08]
Dave Potter
Obviously meant that it came to Suharto's attention. And that's when the Suharto family became involved with BRICS.
[08:18]
Suzanne Wilton
Suharto came to power in 1967. He was complicated and charismatic. He boosted the economy, opening up the country to foreign investment. But his rule was known for widespread corruption and repression, and some say even worse. One interview that stuck with me was with Simon Szembiring, the former director general of the mining department in Indonesia. He told me that speaking out about what he saw going on behind the scenes at the time could have been deadly.
[08:58]
Richard Jacobson
I should be honest to you. I'm afraid to tell somebody about this.
[09:04]
Suzanne Wilton
They can kill me.
[09:06]
Richard Jacobson
Money is very, very dangerous.
[09:11]
Suzanne Wilton
Okay, so actually, we'll start by just asking you to give your first and last and what your role was with.
[09:18]
Brian Coates
BRE X. Hi, I'm Brian Coates. I was vice president and. And corporate controller at Bre X. Brian.
[09:26]
Suzanne Wilton
Coates joined Bre X in July 1996. Almost straight away, he found himself thrown into an escalating situation in Indonesia.
[09:36]
Brian Coates
I mean, the nickname of Mrs. Suardo was Mrs. 10%.
[09:41]
Suzanne Wilton
What did that mean?
[09:42]
Brian Coates
And that didn't talk about how much tip she left when she went to the restaurant was how much ownership she would have in ventures.
[09:53]
Suzanne Wilton
Fending off the Indonesian government was always going to be difficult. But Brex had an added problem. Their mining permit for Busang was set to expire. When it did, Suharto brought work to a grinding halt. Brex did not own the rights known as a title to the land in Busang. The Indonesian government did. If they wanted another permit, Briex was told it needed to share the mine with another company and this company would be chosen by the government. This company would then send money to Suharto. The best BRE X could hope for was to influence the company chosen and to keep a decent percentage of the mine. That's when Peter Monk enters the story. Monk had built his company, Barrick Gold Corporation, up from nothing into the biggest gold business in the world. Sensing an opportunity, he made his way to Jakarta and took over the whole top floor of one of the city's five star hotels. Exploration geologist Jim Richards was based in Jakarta during this time.
[11:16]
Brian Coates
Their sole mission was to hunt down John Felderhoff and do the deal. And he was doing the sweetener job on Tommy Suharto. Peter Monk was moving heaven and earth to get John Felderhoff into his office. And he wasn't the kind of guy that you could say no to either, particularly in Indonesia with Tommy Suharto next to you. So John Felderhoff, he had gone to ground and you couldn't find him for love nor money. Nobody knew where he was. And that was a kind of crazy environment that was going on in Jakarta at that time. People were hunting people and looking for people and have you seen him? And it was like that.
[11:57]
Suzanne Wilton
Monk liked to pepper his speeches with sayings. One of his favorites was, quote, life is about meeting objectives. Sometimes your objectives cross other people's. Then you have to fight and fight to win. As BRE X's new vice president, Brian Coates, was to negotiate with the Indonesian government and Barrick Gould.
[12:25]
Brian Coates
Right away there was. We were right in the middle of discussions. Barrick had expressed interest and the dance started.
[12:34]
Suzanne Wilton
And when you talk about the dance, who was leading?
[12:37]
Brian Coates
The leading candidate to be was Barrick.
[12:40]
Suzanne Wilton
And these are very sophisticated players. We're talking Peter Monk with, you know, political leaders. How did that stack up against David Walsh?
[12:52]
Brian Coates
So obviously Barrack had probably the best group of people around the table advising Mr. Monk. At that point in time, former Canadian Prime Minister Mulroney was On the international committee and on the board, George Bush. Former President Bush, the father was an advisor to the company and a number of other prominent worldwide businessmen.
[13:18]
Suzanne Wilton
Barrick had gotten one of their board members, former U.S. president George Bush Sr. No less, to send a letter to President Suharto recommending he do the deal with them.
[13:34]
Jim Bob Moffett
Just try to connect to Monk now. Sure.
[13:38]
Richard Jacobson
Just a sec. Hang in. Okay.
[13:41]
Jim Bob Moffett
Mr. Monk, are you there?
[13:43]
Richard Jacobson
I'm speaking. I'm here, Rich.
[13:45]
Jim Bob Moffett
Yes, hello.
[13:46]
Richard Jacobson
Hello there. How are you doing?
[13:47]
Jim Bob Moffett
How are you, Mr. Monk?
[13:48]
Suzanne Wilton
Journalist Richard Behar, who shared the BRE X tapes with us, kept a recording of an hour long interview with Barrick Gold's Peter Monk in which Monk talks about his fight for BRE X. In the archive interview, Monk was keen to play down the influence of Bush's letter.
[14:05]
Richard Jacobson
But to me it was such a childish thing to assume that a multi billion dollar project, a project of this importance to the national economy of Indonesia will be determined or given or not given by letter, an ex president's rights to somebody. I mean, such a childish thing.
[14:23]
Jim Bob Moffett
What does Bush get paid to be.
[14:25]
Andrew Neill
On your international board?
[14:26]
Richard Jacobson
Nothing.
[14:29]
Suzanne Wilton
Monk was annoyed that people latched onto this one letter thinking it would be powerful enough to win him the mine. He didn't just rely on letters. Monk went directly to the Indonesian government, hoping to get to the front of the queue. He started to play the game from the smart end, the Indonesian end. Getting inside the politics of an authoritarian regime.
[14:58]
Brian Coates
I would say it was intense on the side of Barrick. Barak had lined up some support in some discussions, you know, so that was a challenging aspect there, was there.
[15:12]
Suzanne Wilton
What was challenging about that?
[15:13]
Brian Coates
Well, Barry certainly had some relationships with the Minister of Mines, Sujanna and one of his advisors, Ganto, who was in the background and a fixer. But there was a lot of controversy. There's also rumoured to have been some dinners in Toronto where the Minister of Mines was there receiving letters from Barrick and also expressing interest to the government of Indonesia that they would like to participate in the development of this world class ore body.
[15:49]
Suzanne Wilton
So they were trying to secure their.
[15:50]
Brian Coates
Position, certainly means by which we were not used to playing.
[15:57]
Suzanne Wilton
In Richard Behar's interview with the late Peter Monk, he brings up a dossier that Barrick allegedly handed to the Ministry of mines.
[16:09]
Jim Bob Moffett
Yeah, about 4 inches of documents to the Ministry and this was information that was damaging to BRE X. And I spoke with an official at the Ministry about this who was. Who reviewed it. And the official believes that this was done to harm Brie X.
[16:32]
Richard Jacobson
Done by whom?
[16:33]
Jim Bob Moffett
By Barrack. He said it was none of barracks business. Why in the world did they come in here, drop this material off? He said that if you want to. If you want to submit stuff like this, put it into a formal report. And I said, why do you think this was done? He says the intention was to hurt and to harm Bre X's relationship with.
[16:56]
Richard Jacobson
The government, I'm afraid, but I have no idea about that.
[16:59]
Jim Bob Moffett
Okay.
[17:01]
Suzanne Wilton
In November 1996, Monk's offer to Bre X was a 75, 25 split. Not in Brex's favor. This was alarming to Bre X. Monk knew that nepotism was the most effective way to win favor with the Indonesian government. So Barak built an alliance with Suharto's daughter, Tutu. Peter Monk tells Richard Behar that he was prepared to use any contact he could to gain access to the decision makers.
[17:27]
Jim Bob Moffett
I think there was a lot of anger. They felt that, and there's been a lot of criticism that Barrack ingratiated itself with the ministry and basically placed itself, you know, at the forefront by hiring the daughter of the dictator there and hiring.
[17:50]
Richard Jacobson
No, no, no, no, Richard. Now, smart. Come on. Don't. No, no, no. I mean, you don't ingratiate yourself by hiring a daughter. You ingratiate yourself. We were selected. You're damn right I ingratiated myself. If I got to sell. We discovered that Bre X was not the owner of that deposit. And we discovered that. I mean, we built our company by doing bids. And for first time in our life, we discovered it was a billion or 2 billion or 3 billion dollar company who did not own the deposit, which the shareholders absolutely were convinced they owned. The title did not belong to them. Well, Christ, who owns the title? Well, the title belonged, lo and behold, according to all the lawyers we sent there to the government.
[18:31]
Jim Bob Moffett
Okay, but it's not unusual for a junior mining company to find things in that country when they have. Well, they had, you know, they had a pending application. They had.
[18:41]
Richard Jacobson
Exactly. There was no title to the. To the deposit. And no analyst ever highlighted that fact.
[18:50]
Jim Bob Moffett
But what was your thinking? Why did. Why was your next step to hire, you know, Hartarto and Tutu? I'm just wondering, what was the thinking?
[19:00]
Richard Jacobson
The thinking was. The thinking was that if you want a gold mine and you find that the company you thought owned it does not own it, and you find out that Mr. X owns it, you go to Mr. X. But Mr. X in this case was the government. And we hired anybody we could. I Mean, we had, I don't know, 18 people there who could help us get to the highest level of government.
[19:24]
Jim Bob Moffett
Because if they don't own it, you want it?
[19:26]
Richard Jacobson
Oh, no, no, no, no. It's clear by the statements of Breacs that they did not have the financial wherewithal. Their plan was to auction. And we did absolutely everything in our power to sell ourselves to the owner. And the owner was the government. And we, you know, the mining minister was in Canada and we looked around and I personally looked around and I mobilized every contact I had, from the banking contacts to the government contracts to put me in touch with people who can get me to the highest level of the government so I can make my pitch at the highest level.
[20:04]
Suzanne Wilton
It seems that BRE X felt they had no choice but to strike back.
[20:12]
Brian Coates
One of the good parts of the story is, I think, how Brie X stood up to large corporate companies that had connections. And we fought back and so we played pretty hard.
[20:24]
Suzanne Wilton
How did that, what did that look like?
[20:26]
Brian Coates
At one point in time we hired President Suardo's son. And I think the credit to that goes from the people that were working at BRE X at the time, from the advisors that were involved. If this is going to be debated at the dinner table on Sundays or Saturday night, we'll get a seat at the table. I guess that was sort of our response.
[20:49]
Suzanne Wilton
Hiring Suharto's son Sighe as a consultant would turn out to be a masterstroke by Briax. But it didn't seem like that at first. Briex going toe to toe with Barrick in the nepotism stakes raised the ante. Intel that could help Barrack secure a deal became very valuable.
[21:08]
Brian Coates
They knew more about us than we knew about ourselves. And that was not just corporately, that was individually.
[21:14]
Suzanne Wilton
How did they do that?
[21:15]
Brian Coates
So they would do by investigating us. You know, there's various incidents that happen. They were par for the course. Barrack had hired Kroll and associates out of New York. Very prominent private investigators.
[21:33]
Suzanne Wilton
With so much at stake and private investigators swarming like flies around breech, paranoia set in. And the paranoia wasn't helped by Walsh claiming there had been a break in at his Calgary office. And two weeks earlier, his wife finding someone rifling through the garbage, all prompting Walsh to send a memo advising employees to shred sensitive materials. This only increased Brian's paranoia.
[22:01]
Brian Coates
I suspect that, you know, they had access to our documents. You know, there's rumors that they were going through our garbage and so on and so forth.
[22:11]
Suzanne Wilton
In 2001, it was disclosed that Barrick had obtained sensitive internal Brex documents via Kroll Associates. How the documents reached Kroll was never explained. They could have been leaked, of course, but these were unprecedented times. We contacted Barrick, Gold and Kroll and put these allegations to them, but they declined to comment. However, in the Breech tapes, Richard Behar asks the late Peter Monk about claims that Barrack hired private detectives to investigate Breek's senior executives.
[22:46]
Jim Bob Moffett
Well, one of the things that I think upset the BRE people was that Barrack had enlisted private detectives to.
[22:56]
Richard Jacobson
I don't know what you're talking about.
[22:58]
Jim Bob Moffett
No, you don't.
[22:59]
Richard Jacobson
I don't know what you're talking about. To get the appointment at this point.
[23:03]
Suzanne Wilton
Richard Behar had already spoken with Randall Oliphant, who at the time was Barrack's chief financial officer.
[23:10]
Jim Bob Moffett
I spoke to Oliphant. He confirmed it. What did they have that Barrack's attorneys used private detectives on whom to dig up information about BRE X and about BRE X executives. And I'll tell you, these private eyes.
[23:25]
Richard Jacobson
But I have never. I have never seen information from BX executives, from private detectives, ever. Never.
[23:31]
Jim Bob Moffett
Private detectives on BRE X executives showed up at BRE X executives homes in Canada and in the Philippines.
[23:40]
Richard Jacobson
To do what?
[23:41]
Jim Bob Moffett
Talked to their families.
[23:43]
Richard Jacobson
To do what?
[23:43]
Jim Bob Moffett
To try to find out who these.
[23:45]
Richard Jacobson
People were when we tried to make the bid.
[23:49]
Jim Bob Moffett
I'm sorry, at the time we tried.
[23:51]
Richard Jacobson
To make the bid.
[23:52]
Jim Bob Moffett
This is during the spring and the summer and even into the fall of 1996.
[23:58]
Richard Jacobson
Richard, I have never, never used, seen or heard or would care what Rollie Francisco's private life is about. Never. I don't know how that could help me or hinder me.
[24:15]
Suzanne Wilton
Brex's chief financial officer, Rolly Francisco, who was leading negotiations at the time, had also spoken about experiencing suspicious activity.
[24:28]
Jim Bob Moffett
Rolly says that every time he went home to Canada, there would be a van staking out his home.
[24:33]
Richard Jacobson
Well, I'm afraid that is something I have absolutely, absolutely zero knowledge of. I would never have authorized and I'm not aware of it.
[24:41]
Jim Bob Moffett
Oliphant said to me that they needed. They want. You know, it's standard procedure during takeovers. And when you.
[24:48]
Richard Jacobson
Yes, in February. We called the takeover off in February.
[24:52]
Jim Bob Moffett
Why did the private eyes continue into this?
[24:54]
Richard Jacobson
I don't know. Believe me, I called the shots here. Do you think, as I told my board, if anybody responsible for this failure is Peter Monk, do you think you.
[25:00]
Jim Bob Moffett
Could inquire about this?
[25:02]
Richard Jacobson
I have no interest.
[25:05]
Suzanne Wilton
It wasn't just allegations of private investigators doggedly following the story. Investigative journalists did their fair share of digging as well. In fact, any break ins and rifling through garbage could have been one of many other interested parties. Investors and analysts were also desperate for Intel. It was like the Wild west and rumor and speculation was part and parcel of such crazy times. This is Ashley K from the Ben and Ashley I Almost Famous podcast. It feels like everyone is talking about GLP1s these days. Those are OIC and Semaglutide. And with Future Health you can find out if they're right for you too. Maybe you feel like you've been struggling with your weight for years and no matter how much you diet and exercise, you just don't feel healthy. Just go to try FH.com to find out if weight loss meds are right for you. Try fh.com future health is not healthcare services provider. Meds are prescribed at provider's discretion. Results may vary.
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[28:16]
Suzanne Wilton
Brian was already suspicious of private investigators used during hostile takeover bids.
[28:23]
Brian Coates
We knew how they worked and we were also advised that they were working against us at that point in time.
[28:30]
Suzanne Wilton
So was this surprising to you?
[28:33]
Brian Coates
Everything is surprising, I guess, in the BRE X story.
[28:39]
Suzanne Wilton
To compound Briex's stresses, the Indonesian government let it be known that if the Barrick deal went through, they would be taking a 10% share, leaving Barrick with 67.5% of the mine and Brex a measly 22.5%. For a time, the Indonesian government looked to be hot on this deal and tried to force a shotgun marriage between Brex and Barrick. The breech's inner circle, Walsh, Felderhoff and De Guzman were appalled.
[29:10]
Brian Coates
If you look at the Breek story, nobody enjoyed the way Barrack was playing the game. So there was a lot of animosity against Barrack at that point in time. John, being the colorful person that he was, highlighted comments that, you know, the closest thing that Mr. Monk had been to rocks was the scotch and rocks. So we fight today and we're friends tomorrow. You also gotta remember that this was war.
[29:39]
Suzanne Wilton
You've described it very much as the story of David versus Goliath.
[29:44]
Brian Coates
Why it was David and Goliath where you had us as a small company fighting off larger companies that did pretty well to stay in the game.
[30:00]
Suzanne Wilton
Suharto's son Sighet, who was still battling for Breix, gave them what was to become a very valuable bit of advice. He told them to bring Suharto's right hand man, Bob Hassan to the table. Andrew Neill was an observer to the war between Barak and Brex when he worked for the mining company Freeport.
[30:24]
Andrew Neill
Well, this is delving into the realm of soap operas.
[30:28]
Suzanne Wilton
Andrew saw the conflict break out in Suharto's family and with other companies who were trying to muscle their way in by making overtures to more of Suharto's kids.
[30:39]
Andrew Neill
Suharto's family were known as the Chindana family because of the location of their complex. And they all lived together in this massive complex. They still do to a certain extent. And Barak were lobbying the Chindana family and had put a couple of the children on retainers and placer. They retained a couple of the other children to lobby on their behalf. And historically, the Chindana family would have supper together just about every day. The kids were fighting in front of dad and mom to the point that there was a real split coming in the family.
[31:23]
Suzanne Wilton
The Suharto's were in meltdown. The children were bickering over Busang, each one bagged by a different mining company. Barrick had the powerful eldest daughter, Tutu advising them. Bre X had Sighet. And now Placer Dome turned the heads of yet two more. The President needed to find a way out before his family went into free fall. He needed wise counsel. He needed Mohammad Bob Hassan.
[31:55]
Andrew Neill
So my understanding is Bob Hassan, who was a close advisor to Suharto and also a very good friend of Freeport, said to Suharto, you know, you're going to have to resolve this. This is ridiculous. And Suharto asked for his input. And he said, quite frankly, you need to give it to a third party.
[32:13]
Suzanne Wilton
Somewhere within this dogfight, Bob Hassan, an Indonesian timber tycoon and Suharto's closest confidant, not to mention his golfing buddy, spotted a golden opportunity. There was a way here. He could engineer his own slice of the Busang mine. Richard Behar and David Walsh in the BRE X tapes.
[32:36]
Jim Bob Moffett
Let me jump back to Hassan.
[32:38]
Richard Jacobson
Yeah.
[32:39]
Jim Bob Moffett
You had to repair your relationship even before you met him. He had. He had heard things about you.
[32:46]
Richard Jacobson
Well, I think everyone in Indonesia had preconceived ideas that from the disinformation campaign.
[32:53]
Jim Bob Moffett
Do you know what he had heard?
[32:57]
Richard Jacobson
No, but I'm sure I didn't pay much attention to it. But I just knew that the perception of me and Bre X as a company was very poor.
[33:10]
Suzanne Wilton
During the battle for Busang, Barrick discredited BRE X. And Bob Hassan got wind of this, which could be a huge problem for the company. Anyone who wanted in on the deal needed Hassan on their side.
[33:26]
Dave Potter
He was sort of the guy that carried the bag for the. He was the man that the President would send out to make sure that he got what he wanted.
[33:37]
Suzanne Wilton
That's David Potter again, Freeport's chief geologist, who carried out the due diligence at Busang.
[33:44]
Dave Potter
So Bob had a lot of power behind him. He had the President's ear. So people treaded very lightly around him.
[33:53]
Suzanne Wilton
But there were other reasons for treading lightly.
[33:56]
Dave Potter
I don't know that I'd want to cross Bob Hassan. The rumor had it that he was somebody that had the kind of connections that he could make people disappear.
[34:09]
Suzanne Wilton
Luckily for BRE X, Barrick's relationship with Bob Hassan wasn't much better. Hassan and Barrick CEO Peter Monk had never been the best of friends. And then Monk made a wrong move. During a meeting, Monk had put his hand on Hassan's knee. Monk was very tactile and would use endearments like Darling to address people he didn't know very well. Placing his hand on Hassan's knee was a cultural faux pas. Allowing for personal space in Indonesia is a sign of respect. Along with Hassan's dislike for Barak's strategy, Monk's apparent lack of respect was the final straw for Hassan. Barrick was ruled out as a contender. Enter Freeport. The US mining giant had already made one huge gold find in another area of Indonesia. And Suharto liked the company's CEO, a man named Jim Bob Moffat, a former American football player and larger than life Elvis impersonating Texan with a reputation for getting what he wanted. Importantly, Bob Hassan liked him too. Things moved fast. Now, maybe because this was the deal Hassan had always had in mind. He helped close it for Freeport.
[35:45]
Dan Bowman
Suddenly it dropped in Freeport's lap. And I think not. It was really not totally voluntary. I mean, it was assigned. And Moffitt said, okay, we'll do it.
[35:57]
Suzanne Wilton
That's Dan Bowman. He was a vice president at Freeport. And Jim Bob assigned him to sort out the details of the BRE X transaction.
[36:04]
Dan Bowman
Suharto, when he wanted to do something, he would write in the margins of letters, like from ministers. They were called dip notes. And basically the dip note would say, do this. And then it would go down through the chain of authority. And Bob Hassan showed me the DIP note. That was the appointment. And Moffitt couldn't refuse that.
[36:26]
Suzanne Wilton
You don't defy the president. No, no, bad idea, Jim Bob Moffett was another person it was best not to defy.
[36:34]
Dan Bowman
Moffitt and Suharto had a very close relationship. They had similar personalities. They didn't like underlings who expressed doubts about their vision. Moffat always said, are you boys ready to fight an adventure? You know, whenever he would have a new. A new thing to do, which I thought was a great way to put it.
[36:55]
Suzanne Wilton
He sounds like he was an incredible character.
[36:57]
Dan Bowman
He was a. He was really something. He was really, really something. And he was. He scared the hell out of most people. I thought he was one of the funniest guys I ever met because he had this sense of presence and he would mess with people. And if you didn't see the Humor in the situation. You'd think, oh my God, this guy is dangerously unbalanced.
[37:21]
Suzanne Wilton
So with Freeport in, what did that mean for BRE X? A meeting was organized with all the interested parties. This was BRE X's chance to try and rescue as much as they could out of the situation.
[37:35]
Dan Bowman
I was called to a meeting at Bob Hassan's house on February 14, Valentine's Day, 1997. And at the meeting were Jim Bob Moffett and also Bob Hassan. And there was a guy there named Roly Francisco who was the cfo, newly appointed CFO of BRE X. And the purpose of the meeting was to find out, you know, how we were going to split the ownership of BRE X between the various parties. So we walked in and Mr. Moffat was a larger than life character, very colorful, and he was a no nonsense kind of guy. We had about 10 seconds of small talk and he said to Roly Francisco, what do you want? And Roly Francisco said, well, Jim Bob, we want $100 million in cash for this transaction. And without missing a beat, Moffitt said, this could be salted. Get up, boys, we're leaving.
[38:38]
Suzanne Wilton
Wow. Salting is the process of adding gold to a drilling sample to make it look like there is more gold than there is. There's a chance that Moffett had concerns about the validity and the scale of the BRE X find. But more than likely this was just a negotiation tactic.
[38:57]
Dan Bowman
We said, okay, because you never said no to Moffitt. And he got up and he walked out and we trailed behind him. Bob Hassan, who was at the meeting, was shocked and he was trailing behind Moffitt asking what, you know, what's going on? And Mr. Moffett got in his car and drove away. And I went home and kind of bewildered. And at about 1:00 in the morning, Mr. Moffat called me and he said, I know what these A want. They don't think we have the money. So I called my friend at Chase bank and I got a billion dollars. You go tell those we have the money.
[39:37]
Suzanne Wilton
Bob Hassan, Jim Bob Moffat and Brie X eventually came to a deal on Valentine's Day 1997. Bre X's sole ownership of Busang would be no more. The mine was to be split three ways. 45% to Bre X, 40 to Indonesia, and for $100 million, 15% to Freeport. In the BRE X tapes. David Walsh spoke to Richard Behar shortly after the deal.
[40:07]
Jim Bob Moffett
Did you feel that in a way this deal was also forced on you? David, but you didn't really have a choice in the end, Hasan said, this is the way it's going to be. Well, report's coming.
[40:19]
Richard Jacobson
As I said in my press release the other day.
[40:21]
Jim Bob Moffett
No, no, but help. Help me be okay.
[40:23]
Richard Jacobson
No, no, but what I said is exactly the truth. The other day I said other companies. Actually, I wasn't allowed to say what I wanted to say. I toned down the press release, but other companies didn't discover it never spent a dime, carried on negotiations without including us.
[40:41]
Jim Bob Moffett
I mean, did Freeport do a lot of the negotiating without you at the table?
[40:45]
Richard Jacobson
No, they were. They were called in at the last minute. I said I had a talk with Jim Bob and then asked for our okay, and I immediately gave it. And the guys at Freeport have a real passion for. For what they do like we do. They're really energized as, to quote Jim.
[41:07]
Suzanne Wilton
Bob, really energized is right. Freeport. We're thrilled. Paul Murphy from Freeport remembers Jim Bob's announcement to the company's Jakarta office.
[41:22]
Andrew Neill
It was Valentine's Day. I remember that February, I think it was 97. Our chairman, Jim Bob Moffett, called us all together in the Jakarta office and said, hey, guys, I've got a Valentine's Day present for you. I've just struck a deal with Bob Hassan and Bre X. We're going to design, develop and operate this fantastic gold deposit in Kalimantan. It's going to be a change for us, but we have the ability to pull it off. He made it clear from the very beginning, not as an afterthought, but he made the proviso, of course, we've got to do our due diligence. And he turned to Dave Potter, who was the senior exploration geologist at the time, and said, dave, I want you to immediately start this afternoon, get yourself organized, and I want you to start drilling twin holes in the Busan deposit.
[42:15]
Suzanne Wilton
In gold exploration, twinning is a way to check the validity of drilling results. If someone says they have found gold in a particular spot, then you drill a hole right next to it so you can test the sample for traces. If they really found gold, then so should you.
[42:33]
Andrew Neill
So Dave's job was immediately to set up a drill rig and start drilling in the top 10 or 20 richest core samples, to drill a hole within a few feet of the original hole to. To try to duplicate the results. So everybody was very excited. This was going to be a new chapter for us.
[42:55]
Suzanne Wilton
Freeport had sent Dave Potter out to busang once before, but as he prepared to go again, some of the things he'd seen on the last trip were giving him cause for concern. Before Freeport handed over $100 million to Bre X, they needed to be sure what they were getting into. Dave shared his concerns with Jim Bob Moffett.
[43:17]
Dave Potter
I was a little concerned about the lack of core. And he said, yeah, okay. And then I said, well, I think we should drill what I called scissor holes, which we'd get into the line of the cross section that they'd drill and drill back at an angle in both directions so that we would intercept at least 4 of the drill holes that they'd been working in. And he said, well, that may be too much because we want to make this move a little faster. And I said, I really think we ought to do it, Jim Bob. And he finally said, sure, okay, go ahead, do that. If he really didn't think it was a good idea, he wouldn't have let me do it.
[43:56]
Suzanne Wilton
Dave quickly assembled a team of geologists to take out to Busang, including exploration manager Joe McPherson.
[44:04]
Podcast Host
We had our first introduction to, to the BRE X guys just up the street from the former Freeport office, which was across from the Australian Embassy at the time. And it was at 10 o'clock in the morning. I remember this very clearly because we all trooped up there. We're kind of, you know, we're chuffed. We're ready to go. And we went in there and there's a bunch of BRE X guys there. De Guzman was there, Felderhof was there, and, okay, the beer right away, 10 o'clock in the morning. So we were all kind of looking, okay, now what do we do? That's a fact. And we had a couple to be polite, but we kind of bailed pretty early at that time because we felt it wasn't really the right environment to be talking about how we were going to structure the actual due diligence itself.
[44:47]
Suzanne Wilton
So you were there to talk about due diligence for what could be the biggest potential mine in the world. And they're cracking Bintang.
[44:58]
Podcast Host
Yeah, they were cracking the beers at 10 o'clock in the morning. They were very laid back, very confident. You know, there was no sign of anything that was amiss. They were really excited themselves and looking forward to being partners with Freeport. And, you know, it was a good meeting. We were just a little bit, you know, taken aback by the Bintangs on the table at 10 o'clock in the morning.
[45:17]
Suzanne Wilton
What was your first impression of Mike De Guzman and John Felderhoff.
[45:20]
Podcast Host
Michael de Guzman, very quiet, very quiet, soft spoken, didn't say much, clearly knew his geology. John Felderhoff, I would tag more as a promoter type. John was kind of the. He was the main spokesman. He did most of the talking and you can tell that he had been, you know, in, in the business for many years. After the first meeting, we kind of, we kind of circled the wagons again and had a bit more of a discussion, planned our strategy and said, well, we clearly are going to have to push this ourselves. There's nothing that can be hidden, right? So we went into it with that attitude that we were going to ask any question that we thought we had to and ask for data, you know, whatever's necessary to prove the viability of the deposit from a technical standpoint.
[46:08]
Suzanne Wilton
After Barrick, Breecs were going to have a hard time trusting another major mining company. And they were very aware that Freeport might try to cast doubt on the find to drive down the price. Before Dave Potter left Jakarta for Busang, Simon Szambiring from the Indonesian Ministry of Mines reminded him of the responsibility resting on his shoulders.
[46:32]
Richard Jacobson
I said to Potter, this is professional, no hanky panky, because this is very, very sensitive. Man is very, very dangerous.
[46:47]
Suzanne Wilton
Sembirng, of all people, knew just how high the stakes were. Up until now, Bre X had been able to maintain a tight hold over Busang. But with the Indonesian government now directly invested and Freeport on their way to scrutinize Welderhoeff and de Guzman's work, this was to be the critical moment. If anything were to go wrong, if there was to be any question over the mine's value, well, then things would go south very, very quickly. Next time on the $6 billion gold scam. Things start to feel weird at the Busang site.
[47:51]
Dave Potter
Just got kind of quiet. Start getting this kind of a creepy feeling. Something just isn't right. And that's when things started to get interesting for us. People started disappearing. De Guzman disappeared.
[48:08]
Suzanne Wilton
The story of the Breck's fortune begins to unravel.
[48:12]
Podcast Host
So I'm sitting on the side of my bed in the room of the Royal York and I'm holding a $6 billion secret in my hand.
[48:23]
Suzanne Wilton
The $6 billion gold scam is produced by BBC Scotland Productions for the BBC and CBC. I'm Suzanne Wilton. Our lead producer is Kate Bissell. Producers Anna Miles, Mark Rickards Story consultant Jack Kibble White Music and sound design by Hannis Brown. Additional sound design and audio mix by Joel Cox. Executive editor Heather Kane Darling. At cbc, Veronica Simmons and Willow Smith are senior producers, Chris Oak is executive producer, Cecil Fernandez is executive producer and Arif Noorani is the director at the BBC World Service, Anne Dixie is senior podcast producer and John Manell is the podcast commissioning editor. Thanks for listening.
[49:38]
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