BUSINESS

Body of evidence

Controversy over a corpse fuels the Bre-X scandal

JENNIFER WELLS August 18 1997
BUSINESS

Body of evidence

Controversy over a corpse fuels the Bre-X scandal

JENNIFER WELLS August 18 1997

Body of evidence

Controversy over a corpse fuels the Bre-X scandal

BUSINESS

A study of photographs. Cadaver number N-97-591. Be a pathologist. Start at the top. An incision, 32 cm, across the coronal plane, ear to ear. The scalp nearly bare, the hair sloughed away by water and heat, a few stray strands here and there. Missing: the brain. Left ear, almost entirely eaten. Face, left side, lacerations. Left eyelid, partially open, a sunken white eyeball in there. A dark indentation where the nose used to be. No moustache. Sutures, starting below the philtrum, running down the chin, then the neck. Long incision the length of the excavated torso. Missing: all internal organs. A row of five small black marks dripping down the chest from the base of the neck, where the sutures have pulled away. Right hand, five fingers, ink on all the tips. A river of rough stitching, upper inside thigh, the skin pulled across and trussed. Missing: genitalia. The skin, smooth, pale, waxy. Right leg, broken above the ankle. Feet, splayed. Autopsied at La Funeraria Paz, Quezon City, Philippines, April 3, 1997, 12:45 a.m. to 3 a.m. Cause of death: multiple traumatic injuries. Presumed identity: Michael Antonio de Guzman, exploration manager, Bre-X Minerals Ltd.

It is unsurprisingly oppressive in Manila. The heat, the traffic, the madness. The offices of the National Bureau of Investigation bring no relief. The corridors are dingy. How can anyone see in this light-

ON

ASSIGNMENT JENNIFER WELLS

IN THE PHILIPPINES

ing? Perhaps the dimness is a blessing, for along one wall runs a display case showing off jars of pickled body parts. The hand of an old man, lost, it says, “parrying a blow to a heavy, sharp bolo, while trying to rescue his niece from her abductor.” A creepily apt atmospheric backdrop for the de Guzman mystery.

It is a mind-bending experience. The closer one gets to the deceased de Guzman, the more one believes that he is very much alive. They say wild boars ate his insides. The boars were very tidy in their work.

Back to the beginning, Indonesia, November, 1993. Calgarybased Bre-X Minerals shipped the first drill core from its Busang camp 160 km down the Mahakam River to the coastal town of Samarinda. From there, the samples were trucked 110 km away to Indo Assay Laboratories in Balikpapan. The assaying on the first two holes showed base metal “kicks,” lead and zinc, a touch of arsenic here and there. Certainly signs of mineralization. There was the odd gram of gold, too, an occasional kick to two grams. The results were not dissimilar to Montague Gold’s, the Australian company that had years earlier drilled this so-called central zone, having targeted an area 2 '/2 km from an alluvial mining operation. All but two of the 19 holes drilled by Montague intersected gold. The best intersection,

one metre in length, ran 6.82 g of gold per tonne. Eight others ran between one and four grams. Hundreds of other samples showed insignificant gold values. In late 1989, having failed to raise funding for further work on its Busang prospect, Montague walked away.

On Dec. 9,1993, Indo Assay received samples from Bre-X’s third and fourth drill holes. Two days later, Busang project manager Cesar Puspos sent a fax to the Indo Assay office. “Please take note of the following sample numbers where possible visible gold was observed megascopically,” he said. Megascopic. Based on or relating to observations made with the unaided eye, according to Webster’s. Puspos alerted Indo Assay specifically to two samples from hole number 4. The assaying of those two samples came in at 16.3 and

They say wild boars ate his insides.

The boars were very tidy in their work.

17. 3 g per tonne. Not only was the gold plentiful, it was coarse. The Montague samples had shown coarse gold, too, but nothing on this scale. In 1993, Bre-X had its first discovery hole. The gold hoax of the century, say executives close to the tale, started right then and there. At some point early in the assaying, Bre-X asked Indo Assay to wash down the sample bags, not a usual procedure by any means.

Cesar Puspos was the nominal project manager at Busang. But he never really made a decision until he checked with the ultimate boss man, his mentor, fellow Filipino Mike de Guzman. Both men, right back in 1993, were buying alluvial gold from local Dayak tribesmen. They told one worker on the site then that they needed the samples “to show the people in Canada and the Philippines.” Salin, the Dayak who ran the general store at the nearby village of Mekar Baru, was particularly prolific, panning five, even 10 g in a single day. When others tried to buy, he would say he needed it all for “Pa Mike” and “Pa Cesar.” A laborer named Min often did the fetching, picking up the gold from Salin on his motorbike. Salin’s house was smack where Bre-X wanted to build its camp back in 1993, so the company paid him 400,000 rupiahs ($214) to relocate.

Life on-site was spartan at best. In the very beginning, a single drill rig, then two. A single vehicle. And an awful lot of canned corned beef and tinned sardines. Those who worked there then say they still be-

lieve de Guzman’s hope to find a pot of gold was real. The throats of chickens would be slit, the blood splattered on the rigs to appease the ghosts in the hills and make the site accident-free. De Guzman would ask one worker to pray for the earth to show the gold.

When the samples were barged or sent by speedboat down the Mahakam River, Puspos would often accompany them on the journey to Samarinda. The boats would dock just across from the modest premises the company rented for years on Jalan Gajah Mada, near the city’s epicentre, not the relatively swish place Bre-X occupied when Busang was finally exposed as the biggest mining scam ever. It would be 2xk years before the company would rent a waterfront warehouse nearby at the village of Loa Duri.

Even if the samples arrived at Samarinda at 2 in the morning, they would be hauled across the thoroughfare to the Jalan Gajah Mada office. It was Puspos who ordered that the bags be reopened, “to make them dry,” he would say to co-workers. “After that, Cesar controlled one by one the samples,” says a former employee.

The Samarinda setup was like any mining company mess, an office-kitchen-bedroom mix. Puspos had a private room upstairs, and a door he could lock between the front office and the space behind where the samples were temporarily kept. He had the habit of working right through the night. Midnight to dawn, just Cesar and the samples. The flow to Indo Assay was inconsistent. Lab workers would call the Bre-X office. “We’re empty,” they would say. “Send samples.” ‘We can’t,” would be the reply. “Cesar’s not here.” When de Guzman made his trips to Samarinda, he would stay at a nearby hotel, g As the scam grew, so did the I good life at Busang. By the time I resource estimates in the south| east zone hit 56 million ounces, the workers were eating New Zealand lamb chops. The volume of samples grew, too, for the southeast zone, delineated and defined by de Guzman and Puspos, was an easier drilling exercise, cutting like butter.

On the evening of March 18,1997, Michael de Guzman arrived in Balikpapan aboard Sempati Airlines Flight No. 858 from Jakarta. He was met by Bre-X metallurgist Rudy Vega and Iwan, a Bre-X driver. De Guzman gave Iwan instructions to go first to a local supermarket, where he purchased writing materials and a 2,000-rupiah stamp. At 8:03 p.m., he and Vega checked into their club rooms at the Hotel Benakutai. There, de Guzman wrote an authorization letter, affixing the stamp, in an attempt to make it official, and giving Bre-X chief financial officer Bernard Leode full authority to act on his behalf “in case of disability or my death.” Earlier in the day, before leaving Bre-X’s Jakarta office, de Guzman had left a memo asking Leode to track down back pay for himself and Puspos from a previous employer. Puspos and de Guzman had both started their careers as geologists at Benguet Corp., the Manila-based mining company. Both left in 1987 and worked together at a series of companies after that. They were a team. De Guzman requested that his own funds be transferred to his wife in Jakarta.

In the Benakutai, de Guzman wrote a lucid memo to his boss,

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John Felderhof. “Dear John,” it said. “I spent half day 18/3 at office to catch up with desk notes, then travelled to Balikpapan. I will proceed to Busang morning of 19/3. I am not feeling well with my flu but will manage. URGENT INFO for your attention is listed below.” He goes on to refer to an upcoming meeting with the ministry of mines, suggesting that Dave Potter, the head geologist with Freeport-McMoRan Copper & Gold Inc.’s Indonesian operations, be made aware of the meeting. Freeport, the U.S. mining company chosen by the Indonesian government as Bre-X’s Busang partner, had drawn nothing but blanks in its own drilling on the southeast zone. Dead rocks. The land had been resurveyed. The drilling rechecked. Freeport had flown an entire hole worth of core on one of its 757s, out of Jakarta, straight to head office in New Orleans, where it was kept under armed guard. There was alluvial gold in the Bre-X samples and nothing in theirs. That Busang was a hoax was clear. While de Guzman was writing his missive, Potter was waiting for him at Busang.

In his memo to Felderhof, de Guzman said he asked Leode to prepare details of the company’s financial data, and Greg MacDonald, the company’s office manager in Jakarta, to prepare a corporate history. It was all very matter-of-fact, a regular business update. He later referred to his health, of passing a treadmill test in Singapore and the doctor’s advice to consult a specialist regarding his liver. “I intend to be back in Jakarta 23 or 24/3. Will advise you on more details from site. Best regards.” The letter was faxed at 9:15 p.m.

Later that evening, de Guzman and Vega made their now-infamous trip to the karaoke bar, the one where de Guzman sang My Way. According to numerous sources, Vega has since said that de Guzman came banging on his door later that evening. He was soaking wet. Was he trying to drown himself? Was he trying to make it look as though he was despondent and trying to drown himself? The office in Samarinda was asked to buy new clothes for the boss man.

De Guzman had coffee with an Indonesia Air Transport manager the next morning, then helicoptered with Vega to Samarinda, where Vega remained. At approximately 10:30 a.m., de Guzman was reported to have jumped from the helicopter travelling at 175 km/h and at 250 m. Included in de Guzman’s papers retrieved after his disappearance were two handwritten notes to Felderhof. “Dear John, I need money to finish the school. Please spare me.” And, “Dear John, I need money to finish these unit [sic], part of boarding house adjacent to school. Please spare me.” De Guzman was building an educational and housing monument to himself in Manila, St. Michael’s Academy. There was a letter written to his wife in Manila,

Teresa, in which he instructed that his estate be divided into seven parts, 40 per cent to Tess, as he called her, and 10 per cent to each of the six children they had had together. According to a translation of the Indonesian police report, the remains of de

Guzman, found four days later in the Kalimantan jungle, were flown to hospital in Samarinda on March 24,1997. The following morning at 11 a.m., an autopsy was performed. “The contents of the chest, abdomen and hip were missing,” says the report. “There were several broken bones in irregular patterns, especially the hip bones and the bones of the lower limbs. The cause of the man’s death is not known as his body was already in an advanced stage of decomposition.”

Now it is muggy in Samarinda, and the mind does play tricks. The number of people I there who believe de Guzman is “ alive are legion. And in Jakarta. I And back home in Canada. Allot s which drives Peter Van Veen, general manager of Indonesia AirTransport, around the bend. Edi Tursono, the pilot who flew the chopper that day, has flown for the company for four years, he says for the umpteenth time. Sixtyfive per cent of the world’s helicopter pilots are ex-military, he says, having grown weary of the suspicion that a spanking new military

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guy arrived to spirit de Guzman to a drop spot somewhere in Kalimantan. Tursono froze his co-ordinates, he reminds. The closest landing spot was 25 km through jungle and swamp. “This nonsense about it was not him,” he says of de Guzman. “We know him very well. The night before, he got himself half-plastered and tried to do himself in. I wish he had done it in the hotel.”

Early in the morning of April 3, Dr. Ed Kalalo removed the maxilla and the mandible from the fractured jaw of cadaver N-97-591. The cadaver had just two upper molars in place, and, according to Kalalo, wore a bridge for the rest. There would have been a lower bridge, too. Neither was retrieved with the body. Kalalo did not have much to work with. When he met with Maclean’s in late June, his file was still very much open. Dental records promised by the de Guzman family had not made their way to his desk at the National Bureau of Investigation. De Guzman did wear a bridge. In fact, he barfed one down the toilet during a particularly spirited, hard-drinking night on the town during his days working for Benguet. At de Guzman’s wake in Manila, Tess asked a Benguet executive if those records were still available. But they had been destroyed long ago. After being given the name of a dentist who examined de Guzman twice in 1990, Kalalo started doing some investigative legwork on his own. He recently viewed a Xerox copy of those records, and on the basis of those he says “there is the possibility” that the body is that of de Guzman. He hopes to meet one on one with the Quezon City dentist this week.

But as Kalalo made progress on his own, de Guzman’s family started raising questions again. At the time of the Manila autopsy, Bayani Palad, the investigation bureau’s fingerprint chief, matched a partial thumb print to an Indonesian identification card of de Guzman’s, as had the Indonesians themselves. Palad’s conclusion was that the body was, indeed, de Guzman’s. But the print from the cadaver was mushy, the top layer of skin worn away, helping to fuel the very active Elvis-like theories. Now, the family say there seems to be a discrepancy between that thumb print and the one they recently studied on a 1979 worker ID card provided by Benguet. “What can I do?” Palad told Maclean’s last week. “They do not believe my findings.”

The prints are “very, very dissimilar,” says William Chua, the Manila lawyer who repre-

Fingerprint discrepancies have led to DNA test demands

sents the family. The assessment is that of laymen. By week’s end, Palad was awaiting a reprint of the Benguet ID card so he could make his own comparisons. Last week, a frustrated cry went out on one of the most

popular Bre-X Internet chat lines. “Join me in a chorus of We need DNA testing! We need DNA testing!’ ” said someone calling himself Big Dude.

Last month, Chua said the family wanted desperately to put an end to the speculation. “We’re going to push for a DNA test,” he said. “It’s just a question of who’s going to do it.” De Guzman’s brother Laurence subsequently retrieved tissue samples that bureau pathologist Noel Minay retained when he led the autopsy in April. Minay had kept a four-centimetre piece of skin tissue from the chest and “trimmings” taken from lacerations on the body. If the thumb prints do not match, Teresa de Guzman herself is considering taking the samples to Los Angeles, where de Guzman’s sister Diana has been co-ordinating the DNA strategy. Even if Palad’s assessment reconfirms his earlier findings, until such tests are concluded, this chapter of the de Guzman story will not close, the theorists will not rest. □