FCX Freeport McMoRan Inc

By Ben Otto 

JAKARTA, Indonesia--A powerful lawmaker at the heart of a political imbroglio involving U.S. mining giant Freeport-McMoRan Inc. denied wrongdoing Monday as an ethics council said it would continue an investigation into an affair that threatens to weaken one of the country's strongest opposition parties.

Setya Novanto, speaker of the House of Representatives and the highest-ranking lawmaker of a political alliance opposing President Joko Widodo, appeared before a House ethics council to answer questions about a tape recording Freeport's local head, Maroef Sjamsoeddin, said he made during a meeting between Mr. Sjamsoeddin, Mr. Novanto and an associate of Mr. Novanto in June.

In the recording, which was played during hearings shown on national television last week, Mr. Novanto appears to request shares of Freeport's Indonesian operation for senior government officials and other actions from Freeport to help push through a stalled, multibillion-dollar contract extension between the company and the government. Mr. Sjamsoeddin told the council last week that he had taped the conversation and passed it on to company executives and then the government, and that he believed Mr. Novanto and his associate, the wealthy oil importer Riza Chalid, were attempting to act as brokers in a deal with the government.

In the tape recording, Mr. Novanto and Mr. Chalid appear to suggest the shares of Freeport would go to Mr. Widodo and Vice President Jusuf Kalla. Both the president and his deputy have denied any involvement in the matter, and have backed the ethics inquiry. Mr. Kalla has suggested the speaker should step down.

Speaking to the ethics panel, which can move to strip a lawmaker of his or her position, Mr. Novanto on Monday denied wrongdoing and questioned the legality of the tape given that it was made without his consent, council member Guntur Sasono told reporters after the hearing. In a statement to the panel, Mr. Novanto also said that illegally obtained evidence shouldn't be considered evidence. Last week, he told reporters that comments he made in the taped conversation amounted to "joking."

Mr. Chalid has denied any wrongdoing.

Surahman Hidayat, head of the ethics council, told reporters after the hearing that lawmakers would ask police to test the authenticity of the tape, and would call Mr. Chalid to testify before the panel. He added that the council would conclude its investigation before parliament recesses at the end of the month.

Freeport's mining contract with the Indonesian government expires in 2021, but the company, which for decades in eastern Indonesia has run one of the world's largest copper and gold mines, has been pushing for a long-term extension to allow it to begin investing about $18 billion to build a massive underground mine. The government has said extension negotiations with Freeport, a major player in the Southeast Asian nation as the country's single-largest taxpayer, cannot begin until 2019.

Also on Monday, Energy Minister Sudirman Said, who was the first person to testify before the ethics council last week after reporting the incident, answered a summons from the Attorney General's Office, which has launched its own inquiry into the meeting. The Attorney General's Office didn't respond to questions about the scope of its inquiry.

Joko Hariyanto contributed to this article.

Write to Ben Otto at ben.otto@wsj.com

(END) Dow Jones Newswires

December 07, 2015 13:23 ET (18:23 GMT)

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