Interviews and bios of the key players:
Montesinos Kurlander Blanca Romero Benavides Crespigny Maugein Gamarra
These interviews between Larry Kurlander and correspondent Lowell Bergman took place in May and September 2005 in Georgia and in Colorado.
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Larry Kurlander |
I want to start with a question that in some ways gets to the heart of what we are going to talk about. Why are you talking to us, Larry?
I felt my name has been disparaged unjustly. And I also felt that I got lumped in with Newmont on environmental issues as kind of an ancillary story, but one that did me great damage. And you know, we only go around once in this world. And frankly, the only thing that I have of value is my reputation. And I felt it was really necessary to try and restore my reputation.
And you got "lumped in." What do you mean?
Well, you know, Newmont started to take a beating a few years ago on environmental matters. And as you know, [newspapers] -- particularly The Denver Post -- would write disparaging things about me without ever having talked to me or trying to talk to me. Or without ever making any effort to try to find out who I am, how I had lived my life.
Are you talking, then, about the publicity that took place because of the meeting with [Peruvian spymaster Vladimiro] Montesinos?
Correct.
Do you understand how someone might say, "What were you doing, meeting with this guy?"
Absolutely. That's a fair question.
He is not exactly someone with great ethics.
If we knew then what we know today, I think that's a fair comment. But in January of 1998, the CEO of Buenaventura [Newmont Mining's partner, a Peruvian mining company] and I wrote a letter to the president of the country, outlining our concerns about what was happening. And he got back to [my partner] Mr.Benavides and said, "This is who I am putting in charge. You should deal with him."
With Mr. Montesinos?
Absolutely. And tell me, what else am I going do? Am I going to lie down, fold up and go away? No, I am going to fight … within the rules, the American rules. But I am going to fight.
OK. Well, let me take you through this, step by step.
Sure.
Early in January of 1998, the Peruvian Supreme Court rules in the preliminary vote, 3-2, against you. Is that why you wrote to the president of Peru?
Well, remember, this litigation had been going on for some time, and Newmont has been winning all along. Suddenly, the Supreme Court, in a vote of 5-0, decides to take a case that never in their history have they taken such a case before. … So you begin to, I think, "Well, what happened here?" And then they vote 3-2. I am somewhat precluded now from talking in detail because of an agreement that was reached here. But they vote 3-2.
Right. And you were shocked?
We were all shocked.
You could lose?
Absolutely. Remember, what we wanted to do was to level the playing field. That's all we wanted to do. We weren't asking for any help for us. We wanted a level playing field. And that was it. And that's what we said to the American government.
What did you do when they sent you to Peru?
I went down there to talk to Newmont's lawyers. I talked to a lot of people down there who were influential, who I thought understood what was going on. And they all had a very similar theme ... and the mere fact that they were doing this was unseemly at best and corrupt at worst. In fact, I have with my own eyes seen a letter from Jacques Chirac [president of France] to [Peru's] President Fujimori, asking for his intervention in the case.
So what do you do?
Well, you can do two things. You have two choices. You can lie down and be run over by the freight train or you can start to fight. I chose to fight.
And what did you do?
I went to my government and asked them for their help, wrote a letter to the president of Peru, asking for his help … I went all the way up to the Undersecretary of State of the United States. I went to the embassies, we went to the FBI. We went to anybody who would listen to us. We went to try to enlist their help.
And what was their response?
Well -- "This should not come as a surprise to you, Mr.Kurlander, that the French are doing this. This is not the first time. You know, we hired investigators to find out what was going on. We did as much as we could to try and stop it."
What do you mean, "this shouldn't surprise you, Mr.Kurlander"? What did they mean?
They mean, Mr. Bergman, that the French had been doing this sort of thing around the world, that the French government had been doing this thing around the world for a number of years.
Intervening on behalf of their financial interests of their company?
No, when you intervene in a judicial process, that's far different than intervening on behalf of a company that happens to be French. Let me give you an example. Up until a few years ago, it was my understanding that bribery was a legitimate deduction on your income tax in France.
Are you telling me that you were at a disadvantage in Peru?
We were at an extreme disadvantage. We have in [the United States] the Foreign Corrupt Practices Act, which prohibits American companies from paying any sort of
The French were bribing people?
I don't want to use that word … I'm sufficiently comfortable in saying that they were acting inappropriately, that the French government was acting inappropriately.
They weren't just writing letters to people and saying "Please level the playing field against the Americans," for instance.
No, they were saying that this is an important case, and we need France to prevail on this case. Asking for active intervention. When President Fujimori's brother visited the president of France, he purportedly came back with the letter from the president of France asking the president of Peru to intervene on behalf of the French plus some other emoluments.
Emoluments?
Money.
And so Newmont wasn't paying any bribes?
Absolutely not … I think winning people's trust and making them part of the process is a far better way of doing business than bribing and that you'll be far more successful in the long run, just as I believe that operating where democracy is thriving is a far better place for corporations to work in than under dictatorships.
But you don't get to choose.
In the extractive industries, you do not get to choose. You go where the minerals are or where the oil is.
So the president of Peru told you, basically, to go see Montesinos.
Yes. Nonetheless, we couldn't seem to get an appointment with him for more than a month.
And who is Mr. Montesinos?
He's a Peruvian who turns out to be an extremely bad man. But he headed their internal security. Mr. Montesinos dealt with internal affairs in Peru, and whether it was the American government, the Peruvian government, people who have subsequently become friends, they all said that the only one who could stop this is Montesinos.
You are a lawyer, right? You go to see the head of this secret police -- a man who had already had some publicity in Peru as being corrupt, if not ruthless -- about a judicial case. You know that's not the way business is done.
Well, what do you mean I "know that's not the way business is done"?
You wouldn't do it here in the United States.
Wait one second. I went to my government. I went to the Peruvian government. Both of whom say, "If you want to level the playing field, this is the man who can level the playing field. And he is the only one in Peru who can do that." It was my government who went to him first -- before I did. It was my government who recommended -- strongly -- that we speak with him. They concurred with the president of Peru. Tell me what my option is at that point. Do I lie down and just fold, fold up and go home? Or do I fight for what I think is right and fair and just? I think the answer is, you fight
And get them to intervene on your behalf.
Yes. What we wanted to do was level the playing field. That was extremely important to us. We knew, I mean, I was very confident that we would win on the merits, but that if there was inappropriate behavior, we couldn't win. I was not asking for anybody to intervene on our behalf. I was asking them to stop the French from doing what they were doing. Period.
Did you know your conversation with Montesinos was being recorded?
No, I did not.
Was it accurate?
I don't think so. I can tell you that there are parts missing, that there are gaps in the tape and that there are translations that are wrong. Other than that, it's accurate.
Now when you were meeting with Mr. Montesinos, before you went to see him you must have known something about what his methods were. What did you hear about him?
I heard two things. One is that he could be terribly ruthless. Two, that if the French were to be stopped, he was the only one in Peru who would dare to do it. … At the same time this case was going on, there was a short war between Ecuador and Peru ... and he wanted the support of the United States. He has so testified since. Everybody knew this. And therefore, that was helpful to us in getting his attention to stop the French.
To stop the French or to talk to Judge Beltrán or to intervene, himself, in the process?
I never asked him to talk to any judge. I never wanted him to try and in any way do what the French were doing.
Well, it's not clear that money changed hands, but he definitely intervened.
Yes.
And when he said, when you -- and when you say on the transcript, when you say on the transcript, "I want a friend for life," and he responds, "you have a friend" --
I don't remember that precisely. But there was a context surrounding that where he said that he would help, and I'm not sure of the exact wording of it to be honest with you, but in substance, that's what I said.
But you do understand then why people have raised questions, when they hear a phrase like, "I want a friend for life." And you respond, "You have a friend for life."
Well, again, uh, you know, I don't remember the words exactly. [laughs] We are talking now seven, more than seven years ago. And I have seen that transcript. There were gross inaccuracies in that. But it's highly probable, at the end of the day, that I could have said that.
But the fact that this came out is one of the reasons you are talking to us, because of the implications.
Well, I think that some people have drawn conclusions that I believe are unfair. Look, at the end of the day, we'll all make our own judgments, about me and about others. But I think that the fair way to do this -- especially when you have complicated facts as you do here -- is to look at how one has led his or her life. You know, we all have long careers here. And the question is, "How have I behaved along the way, both before and after?" And that's how I ask you to judge me.
Let me ask you about Peter Romero of the U.S. State Department, in charge of Latin America at the time. He also talked to Montesinos?
Correct.
Urging him to --
Level the playing field.
Was Peter Romero hired by Newmont Mining?
He was hired by me.
After he left the government?
Yes. What happened was that the case was over. It was all said and done. And I had visited him innumerable times … afterward he asked me, could I help him. … He had enough of government service. Did he know any way I could help him find a job. And I said sure, I would give his name to some headhunters that I knew that had been helpful in the past. And I'd be more than happy to do that. And after awhile it occurred to me that we could use ongoing help in Latin America.
Did you know at that time that he had made a phone call on behalf of Newmont?
This is long after the case is over we're talking about.
But you know the appearance.
The appearance is what you want to make it. If you stop there, then I think you can come away with the impression that this was inappropriate. But if you know that I also hired the former American ambassador to Uzbekistan who retired, and if you also know that I hired the former Indonesian ambassador to the United States after he retired, and so on, this was not an unusual thing. ... I'm comfortable that you'll come to the conclusion or that your viewers will come to the conclusion that I did not act inappropriately.
It's the appearance of the revolving door.
If something is simultaneous with them intervening on your behalf or there's some prior discussions, then it is inappropriate. He [Romero] didn't ask for anything. He's a very honorable guy. You know, it's one thing that I'm thrown into this. But I think it's wrong that he's being thrown into this.
So in the end, do you think Montesinos did anything to help?
Well, as it turns out, it's clear that he met with this judge, the seventh judge, who in the tape says, "Are you asking for me to do something inappropriate?" the judge said. I need to point out something, that certainly I feel that it was inappropriate for him to meet with the judge. I do feel that. For whatever his reason, which he states in the tape was for national security reasons -- that the American government had asked for his intervention -- it's inappropriate for him to do that. It's inappropriate. Plain and simple. Nonetheless, that's not what we were asking for.
No, but it may have been the reason you won in the end.
I don't think so. I think that the judge said to him, "I have already decided the case." And indeed … [a week later] a rather lengthy opinion came out. If he were influenced, it's hard to tell.
So Newmont's hands are clean.
Absolutely.
So what you're saying is, despite the testimony and the reports that large amounts of cash changed hands, on behalf of Newmont, it's all untrue.
To my knowledge, no one at Newmont, and I'm very comfortable in saying this, did anything inappropriate. And I can further say that no one at Newmont knew of any inappropriate behavior by anyone connected with our side. … I have since read allegations that Newmont's partner did something. It's inconceivable to me that this old man [Alberto Benavides] could be carrying $4 million in his suitcase …
Paid bribes?
False.
Paid off the government?
False.
And their business partner, these people who you say you wouldn't vouch for, would you know whether or not they paid anyone off?
No, I don't know that. I would tell you if I did.
I just want to make sure that I am not overreaching, in your mind, by saying there were circumstances here that makes it look like something wasn't aboveboard.
I don't think that there is anybody who will tell you that I, or anybody in my company, acted in any way other than in accordance with the laws of our country. Period. I met with him [Montesinos], because everybody I spoke to in my government, in the Peruvian government, as well as people outside the government, including his enemies, told me, "If you want to level this playing field, you must meet with him."
Some of the people we met in Peru -- the former prosecutor, a well-known columnist who has followed the case -- say, "One thing that is true about Montesinos, is he never did anything for free."
I can only go back and tell you that I am telling you what the facts are. And people will make their judgments about me and Newmont, about how we conducted ourselves. I can't do better than that. I wish I could. But the facts support what I have told you. And the fact that you are in a country and you are forced to deal with a guy like this, it's, it's a terrible thing.
Today do you regret having gone to see Montesinos?
What, what I've learned since the case has been decided leads me to conclude that I would not have gone to see him.
Because?
Because he's not a nice person. And as much as I wanted to win the case, as much as I wanted to win the case, it was never at the expense of my integrity.
When you won the victory, what did it mean for Newmont?
Well, I think it was an important victory. And as the case went along, there were more discoveries of gold at Yanacocha. It turned out to be a lot bigger than anybody thought it would be. It was a significant victory.
We are told that it's the most productive and most profitable gold mine in the world.
It's entirely possible.
Well, let's move on to another issue that happened after the court decision. Why did Newmont decide to conduct an audit of Yanacocha? An environmental audit? What was your role in it and what did you find?
About a year and a half to two years after this case was over, the chief operating officer, Dave Francisco, came to me and said that he was uncertain about what was happening environmentally ... I think he was not confident that he was getting the, the true information from the environmental group that was supposed to oversee this. So he asked me, would I go and do a series of audits. At the same time, Newmont had formed another group to oversee or to do an audit of health and safety. And because of my background -- and I think because he [Francisco] had confidence in me -- he said, "Let's do environmental audits, throughout the company." It wasn't just about Yanacocha.
Around the world?
Yes. Absolutely. And you know, I was very candid with him. I said, "If you want to know the facts, I'll give you the facts. But if you are going to be hesitant about knowing the facts, then maybe you should look to someone else." He said, "No, I want to know the facts." And so we set our first audit. I think we were particularly concerned about Yanacocha, if I recall correctly, because the rainy season was coming up. And there could be spills.
And what did you do and what did you find?
Well, I assembled a team of the best professionals both inside and outside the company. We developed an environmental audit protocol that would be used in all the audits, whether it was Peru or in Nevada or in Indonesia. The next thing we did was to review documents -- this is all before we went down. And we spent weeks reviewing documents, internal documents. And then we went down and spent two weeks doing as thorough an investigation as we could do.
What specifically prompted this decision to send you to Peru?
Some months before this, a contractor was hauling mercury from the mine in Cajamarca to Lima to dispose of it. One or two of the containers fell off the truck and there was a mercury spill. Newmont came in and cleaned it up. But that spill caused a lot of despair in the community. And to this day, five years later or more, that despair remains.
Well, it prompted demonstrations.
Yes, it prompted demonstrations. But it prompted a profound distrust of Newmont. There had been other issues that the community had raised environmentally.
Like?
Questions about the water quality. Questions about the reservoir. Questions about health and safety. Legitimate questions and to the credit of Newmont and in particular the chief operating officer, he asked me to go and do an audit.
Well, we got a hold of a copy of this report [a 2001 internal Newmont Mining environmental audit].
I don't think it's appropriate for me to talk specifically about that. And if you have it, I think the report will speak for itself. But I am willing to speak to you generally about it.
What did you find?
I will say this, that we found large areas where work needed to be done to improve the situation. … There were water issues. There were air issues. There were road issues. There were health issues -- all arising out of the mining operation. … To their credit, since that audit, they've done a lot of work to fix the problems. I think it's a fair question to ask how did it get to that point, however. And that's something that I don't know the answer to. [read the official company response to questions posed by FRONTLINE/World and The New York Times]
The company says it operates overseas at the same standards that it would have to meet here in the United States. Correct?
Yes.
Were they doing that in Peru?
No.
Were these minor violations?
No.
What standard were they using?
You'd have to ask them that question. But it was not a U.S. standard, and it was not a Peruvian standard.
Did anybody get fired because of this?
Not to my knowledge.
We heard that it was recommended that the head of the environmental group at Newmont be replaced.
That's true. Someone else made that recommendation.
The recommendation was taken to whom?
The senior management of the company.
To Mr. Murdy?
Absolutely.
Who is Mr. Murdy?
At the time, I think he had become president of, of the company. He's now the chief executive officer and chairman.
So he runs Newmont.
Yes, sir.
What does it say to you that they didn't make personnel changes to make sure they didn't get in this situation again?
Again, we can all have our opinions about that. And I think it's much more appropriate for Newmont to answer that question.
In your opinion and based upon the knowledge that you gained in Peru, did Newmont damage the public health of the people in the vicinity of the mine?
I don't know. The honest answer is, I don't know. We raised questions about certain practices. But it was not in our purview nor our expertise to determine that, what you're asking. To this day, I have no ability to do that.
If you had a child living near the mine, would you have been concerned about their, their health because of what was going on?
The answer is yes. But I cannot sit here and honestly tell you that they damaged the health of people. That would be terribly unfair.
They damaged the environment.
I'm not saying that. I'm saying that our audit found certain deficiencies. Indeed, significant deficiencies. And since then, Newmont has said that they've spent in excess of $100 million repairing those deficiencies. I think we can criticize them for the deficiencies. But it takes large people to admit a mistake and correct that mistake, and they've done that. And they deserve some credit for that.
Was your audit reported to the board of directors?
On two occasions -- not one.
Was your audit presented?
No, it was not.
Was the board told how much damage had been done to the environment?
In July 2001, the head of the environmental group reported to the board, as he did every year at the July meeting, on environmental affairs. Not simply in Peru, but all through the company. And Peru was included. I didn't feel that it was an adequate explanation of what happened. And I petitioned Mr. Murdy to go back to the board and give them a fair assessment.
Did he do that?
Yes.
We understand that you were quite upset during this period -- that you recommended on one occasion that bonuses be cut or forfeited by the officers responsible, including you.
That's true, I did.
That couldn't have been very popular.
It was not.
Was it done?
I would say it was not done. It was done in such a minimal way, in my opinion, as to -- as to have no impact. We should have forfeited a substantial part of our bonuses because of the mercury spill. We had to send a message, and I don't think we did that adequately.
Let me ask you about another finding in the audit. It indicates that "the mine has lost the trust of the people in the surrounding community." What did you mean by that? And why is that so important?
Without referring specifically to the report, I had -- both before and after going there -- tried to talk with my colleagues at the senior level about this trust issue with the community. And having spent time there in 1998, having gone back and spent two-plus intensive weeks at the mine site, it was very clear to me that there was an enormous gap in the relationship between the community and the mine -- one that would ultimately cause huge problems for Newmont. I spoke both orally to my colleagues, and in writing to them, about this issue. And I went so far as to say that they were going to lose their social license to develop what was known as the Cerro Quilish area. I wish it weren't true, but unfortunately, they announced recently that they have given up on pursuing their permit for it because the community was so outraged. Well, I wish I had been wrong.
When we interviewed Roque Benavides -- the Peruvian partner of Newmont -- he said, first of all, that he has no idea what the concept of "social license" really means. The only license he understands is a government license. And he also said that he expects, within the next few years, that they will, in fact, be mining at Cerro Quilish.
I think that there are still lots of people in the extractive industries who don't understand this concept of "social license." And they are in denial. When I speak about "social license," I am not making a value judgment. I am not saying it is good or bad. I am saying it is a reality. It has become a reality over time. Beginning in 1984, with the Bhopal chemical spill, involving Union Carbide -- where thousands of people died -- people became interested in what was happening in their own communities. And, in fact, began to act upon it. That accelerated to the mining industry in the 1990s. And unless you had the consent of the communities in which you worked, you would have a hard time doing business. It was no longer about just providing jobs for a community. It was about collaboration and trust. It was about transparency. It was about sharing information with the community that affected them -- the good, the bad, the ugly -- in a timely way. It was about collaboration with them on specific projects that would enrich their lives. And, most important -- unlike the government license, which is granted once every five or 10 years -- the "social license" is renewable every day. And therefore, you have to work at it, day and night, 365 days a year, or you run the risk of losing the trust of the people and therefore your license to operate. They -- the community, that is, not the government -- are more likely to shut you down today around the world.
Father Marco Arana, a local community leader, says that the testing of the water in the local area, the environmental regulation of what goes on around the mine is a problem. He says, "The company is not transparent enough. And that, in any case, this should be done by an independent authority." And he says the company is against that.
Well, I don't know that "the company is against that." What I will say is that the company has begun a journey toward becoming transparent. They are now publishing a series of bulletins, which they call Now and Beyond, that deal with community issues. And while they are not totally transparent yet, they are on their way there. This is a journey. And I think that they ought to be encouraged to do more of this. And to become more transparent. They need to set down specific markers that everybody understands. "Here is what we are going to do environmentally in 2005." And set measurable targets. But it's fair to say also that having a third party as a buffer between the community and the mining company -- while they are in the process of building trust -- is a helpful thing. And I would do it, if it were my call. I think part of gaining and maintaining the "social license" does involve getting third parties into the picture. … And I think that Newmont is signing on to a series of international protocols that are very helpful. The question is, are they willing to go to the next step? We'll have to wait and see.
The "next step" being?
The next step being total transparency. But they have made really good progress in the years since I have left the company.
Our reporting shows that at some point you communicated to the CEO, to Mr. Murdy, that by not rectifying what had happened in a clear and open way, they were going to damage the future of the company as well as the reputations of the people involved.
I think it's fair to say that I felt that Newmont had to become transparent. And that we needed to be not the ministers of good news, but rather a partner in communicating with the community. There is a social license that in my opinion is far more important than the government license. Because the social license is granted by the people of the community. And unlike the government license, it's renewable every day. And without building a trust with the people who live there and work there and who have lived there for centuries, you're going to have trouble. And indeed, they have.
So you were saying that the social license is more important than the government license. Is that a change that's taken place around the world?
I think that if you trace the history of the extractive industries from the 1960s until today, and some serious work has been done by academics, you'll find that increasingly over the decades, that the communities have become more involved, more directly involved with their own futures. And really a watershed occurred in Bhopal, India, with the chemical spill there, when thousands of people died. And since then, the chemical industry has reformed itself in a rather noteworthy way. Communities are more and more becoming involved in their own destinies. And when I say it's a social license, I mean it. Without the community's support, you're going to -- you'll be out of business eventually. They will force you out of their community. And it doesn't matter how much government support you have.
And why is that taking place?
I think people -- people want a say in their own destiny. I call it the democratization of information. What's happened is that information has spread readily through very inexpensive means. Whether it's satellite television, cell phones, computers, the Internet, information has now been democratized. Everybody has equal access to information, and access at a very low cost. What this means is that people have a factual basis for determining their own futures, whereas they previously had to rely on government information. That democratization of information has led people to become activists in their own communities.
Did your evaluation of Newmont change from, let's say, the time that you won the Supreme Court victory in Peru and the emergence of these environmental issues?
First of all, I was not in the business of evaluating Newmont. That was not my role. … I would say that as time went on with the new leadership of the company, I felt I was having less and less of an impact, in a positive way. And when that happens, it's time to go. I think a CEO is entitled to have the people that he or she wants to have. And if you are not one of them, you should gracefully leave.
You said before that we should go talk to the Newmont CEO, Wayne Murdy. Newmont officials talked to us in Peru, but now they are being very hesitant about talking to us here in the United States. Why won't they talk to us?
I don't know. I think it would be very helpful. I think they have a reasonably good story to tell. And I think they should tell it. I think they run the risk of having people talk on background, leak things, not be upfront, and then fall prey to then not having spoken to what the facts are. I would encourage them to come and speak with you openly and candidly and without fear. I think that it can only serve to help them. I don't think there is any risk in them doing that.
Why did you leave Newmont?
You know, there's a time and a place for everything, and there's a time to say goodbye and it was my time.
The CEO who had hired you had left.
The CEO had left. It's not uncommon for senior officers to leave at that point. You know, it's not breaking news to anyone that, you know, I was not on the same page as Mr. Murdy was. I didn't feel comfortable, and I don't think he felt comfortable. And so it was better for me to go on and do something else.