Freeport McMoRan:

UT's support for a corporate bandit

Compiled by Liz Henry
September 1990; pages 10-11; Volume 2, No. 1

The following article is compiled from research and articles produced this summer by members of the Howlers and Polemicist research groups.

Freeport's Copper Colony

The institutional ties between President Cunningham and private enterprise stand as a case study in an administrator serving the needs of outside constituencies at the expense of education and the public interest. The corporate background and priorities of our UT administrators surface over and over. So we need to examine these corporate connections and ponder their implications for our University.

Cunningham's split personality: Public official or corporate hack?

Probably the major political event of the summer in Austin was the proposed "Planned Unit Development" (PUD). On June 7 some 900 people stormed the City Council chambers to oppose an environmentally dangerous development on Barton Creek, upstream from Barton Springs. The Council hearing lasted until six in the morning, and ended with an unexpected unanimous decision to block the development. The "Fateful Thursday" Council meeting marked one of the greatest outpourings of democracy in Austin's recent history.

In the ongoing battle between the Austin community and the developers of the Estates of Barton Creek over the future of Barton Creek, UT-Austin President Cunningham has publicly sided with the developers, despite widespread community opposition to the project. Cunningham sits on the board of Freeport McMoRan, for which he was paid at least $50,000 in 1989 according to the company's proxy statement. He's also a paid member of the Policy Committee of the ClubCorp.-owned Barton Creek Country Club.

Both Freeport CEO Jim Bob Moffett and ClubCorp's Robert Dedman are major donors to the University. Moffett and Dedman are both [life] members of the UT-Austin Development Board, an elite corps of large donors to the University. And in his role as Chairman of the Texas Highway Commission, Dedman is in a position to funnel millions in Highway Department research contracts to UT every year.

Freeport McMoRan is a multinational conglomerate with interests in agricultural chemicals, real estate, oil and gas, and copper/gold mining. According to his 1990 financial disclosure statement filed with the Secretary of State, President Cunningham owns over $70,000 worth of stock in Freeport McMoRan Inc. and in three of its subsidiaries. After Moffett made $3 million in donations to the University this April, Cunningham offered to request that the regents name a UT building after Moffett and his wife.

Cunningham's wife, advertising professor Isabella Cunningham, also sits on the board of Franklin Federal Savings, an 80 percent-owned subsidiary of ClubCorp. Isabella told The Austin Chronicle she makes $700 per board meeting she attends for her services. Her husband, however, has yet to publicly discuss his position on the payroll of the companies or his role in lobbying for the development.

When the story broke concerning Cunningham's positions with the two companies, UT vice president for administration Ed Sharpe told The Daily Texan that "Dr. Cunningham serves on the board as an individual and that's not related to his position at the University."

Developing Barton Creek

For Austin residents as well as UT students, Barton Creek and Barton Springs represent the best part about Austin. Just below the proposed development, Barton Creek dips into the recharge zone of the Edwards Aquifer, an underground river that constitutes the sole-source water supply for some 30,000 Austinites. And 250,000 people per year visit Barton Springs, an ice-cold swimming hole in Zilker Park where Barton Creek reemerges from underground. The area is unique in both its topography and its public status. It is one of Austin's treasures.

Freeport McMoRan and ClubCorp. plan to develop a 4,000 acre tract of land on Barton Creek, plan to build 2,538 houses, 1,900 apartment buildings, three new golf courses and 3.3 million square feet of commercial development (mostly industrial and R&D). If the Council approves their proposal, this deal will likely ruin what's left of Barton Creek, given the sensitivity of the Barton Creek watershed and Freeport's past and present history of water pollution (see below).

Perhaps the most destructive part of the planned development would be the golf courses that would be built right along the creek. Already there's substantial evidence that the golf course currently there has polluted the creek. Just where the creek hits the golf course, the water turns murky and is covered in algae. Earth First!ers have photographed large amounts of sediment washing down from the golf course into the creek during a heavy rain. Further, ClubCorp. plans to fertilize the golf courses using "effluent," a polite word for "sewage." That's problematic because of the limestone topography of the area - sewage can seep through the porous limestone and thus enter the creek.

Of course, one understands the desire to build luxury homes in the secluded West Austin Hill Country. Freeport knows that encampments of "American" employees working in any third world country need to be located in a peaceful, restful, isolated environment, where the elite, white upper class can live apart from the natives. Robert Dedman says he wants to turn Barton Creek Properties into the "River Oaks" or "Highland Park" of the city. These corporate America conquistadors need exclusive country clubs, private parks, and huge homes in suburbs newly built amidst the untamed natural environment. In Austin, this refuge of the rich right would be the Barton Creek Estates, if the developers have their way.

Toxic Chemicals in Louisiana

"Freeport-McMoRan people understand the need to develop all resources in ways that are compatible with the environment. With years of experience, they have demonstrated the ability to do so," declares the Summary Statement for the Barton Creek Planned Unit Development, issued days before the uprising at the City Council. Reality and the public record, however, reveal a different story. Despite the slick phrases churned out in its Summary Statement, Freeport has proved its unreliability elsewhere in the U.S., especially through its controversial mining and chemical operations in Louisiana.

According to a study by Citizen Action, a national Washington-based environmental watchdog group, in 1988 Freeport McMoRan ranked as the sixth largest producer of toxic waste in the U.S., and the number one water polluter in the country. In fact, Citizen Action reports that the two worst water polluting plants in the country both belong to Freeport's fertilizer subsidiary, Agrico Chemical Co. Most of Freeport's toxic water discharges are dumped into the Mississippi River - the water supply for New Orleans - from these two Louisiana fertilizer plants.

Despite its dismal pollution record, Freeport claims that it complies fully with all Louisiana environmental ordinances. Louisiana's Department of Environmental Quality (DEQ) thinks otherwise. Student research on Freeport's Louisiana plants unearthed a copy of DEQ's August 11, 1988 Proposed Penalty Notice to Freeport. The document cites four separate violations of dumping limits over seven months at Freeport's fertilizer plant in Uncle Sam, Louisiana. One of the incidents involved Freeport pouring more than twice the allowed toxic discharge into the river- 79,681 lbs of phosphorus in a single day.

Investigations by employees of DEQ determined that over three separate periods, one lasting 12 days, Freeport failed to properly monitor its pollutants as required by its discharge permit; for these and many other violations of Louisiana state law, Freeport was chastised and fined. Obviously it's more convenient for Freeport to pay a few paltry state fines than to stop dumping toxic chemicals into the drinking supply of a major U.S. city. If Freeport can afford to violate state environmental laws this consistently, and still claim their discharges are "fully permitted," then their claims about their pollution-free golf courses should be viewed skeptically.

Freeport bragged of its environmental activism to the City Council in June 1990, telling them that "More than $6 million has been invested in the past two years alone in pilot plant to recover sulphur from by-product phosphogypsum and create aggregate from what remains for use in road and other construction activities." That statement obscures the context of Freeport's decision to recycle its gypsum waste. In 1987, reports the 1-28-87 New Orleans Times-Picayune, Freeport's Uncle Sam plant was one of four fertilizer plants that petitioned state and federal officials for permission to dump 12 million tons of radioactive phosphogypsum annually into the Mississippi river, where New Orleans gets its drinking water. According to the New Orleans Sewerage and Water Board, the excessive heavy-metal and radioactive discharges would put children, dialysis patients, and pregnant women at risk.

It wasn't Freeport's wisdom and benevolence that caused it to recycle gypsum waste. The company did so only after losing a months-long battle with the people of New Orleans for the right to dump chemical by-products into the drinking water. The Summary Statement of July 1990 touts Freeport's "recycled" phosphogypsum aggregate as a useful road construction material, although a year earlier reports of strong acidic smells, dead and dying vegetation including trees and possibly animal life, halted work on the test sections of Highway 90 containing the phosphogypsum by-product.

Yali boy
Yali boy
Photo by Owen Jelpka

Why doesn't Freeport care what happens to Louisiana's environment? In the eyes of a multinational corporation, Louisiana is just another third world country to be exploited for all it's worth. Tellingly, in the public battle over the proposed gypsum dumping, Jim Bob Moffett indicated that his opponents were "ignorant," and declared Louisiana a "banana republic." That this was the worst insult he could think of reveals the blatantly exploitative corporate mentality about to be unleashed on the Austin community.

Freeport in Indonesia

Freeport McMoRan doesn't limit its environmental degradation to Austin or Louisiana. The environmental journal World Rivers Review reveals in its Jan./Feb. 1989 issue that "virtually free from troublesome regulations," Freeport's copper/gold subsidiary in Indonesia, Freeport Indonesia Inc., has "dumped mine tailings from its open-pit copper mine on the Aghawagong-Otomona-Ajikwa river system in the Jayawijaya mountains continuously for 16 years."

Freeport's cozy relationship with the Indonesian government allow it to continue that disgraceful practice. According to the July/August 1989 issue of the Indonesian magazine Setiakwan, the U.S. government in 1967 demanded concessions from Indonesia that would allow Freeport to mine copper, gold and silver with no environmental restrictions in exchange for foreign aid and loans. The U.S. government threatened to deny scholarships to Indonesian students who wanted to study in the U.S. if the Indonesian government refused to comply. Under the deal, the Indonesian government allows Freeport to mine while paying Indonesia next to nothing for the gold and silver it extracts. This lucrative arrangement made Freeport Indonesia the most profitable of all Freeport's subsidiaries.

When the Indonesian government, under pressure from international environmental groups, agree to conduct a study on the impact of Freeport's river dumping, it allowed Freeport to hire the scientists and conduct the study using Freeport facilities. It's certainly no surprise that the study uncovered no harmful effects of dumping raw copper-mining wastes into the West Papua water supply.

UT: the Indonesian connection

The UT Geology Department recently accepted a ten-year grant from Freeport to explore for copper ore deposits in Indonesia where Freeport owns copper-mine interests. Just months after UT had begun its study, the Indonesian government granted Freeport Indonesia exclusive one-year exploration rights in a 25,000 km 2 section of Western New Guinea. The UT contract sheds light on how corporate relationships can pervert the idea of a public university working in the public interest.

The project, headed by Natural Sciences Dean and former Geology Department chair Robert E. Boyer, is funded by a gift from Moffett of $2 million. Boyer declared himself "personally grateful"; as director of the UT-Freeport Indonesia geological survey, he personally controls $398,000 of the project's $1 million phase-one budget.

Moffett has been a strong alumni supporter of the Natural Sciences College, sitting on the Geological Sciences Advisory Council from 1972-1985. In 1982, Moffett funded the Robert E. Boyer Centennial professorship in geology. Although UT policy dictates that donors can't dictate who receives the positions they endow, Moffett's former senior thesis advisor Boyer was the first professor to receive the position.

The research proposal for the UT project, obtained under the Texas Open Records Act, states that the project "will serve as a basis for regional exploration in Irian Jaya and similar settings in the rest of Southeast Asia by Freeport, Indonesia, Inc." In a UT publication last fall, Cloos explained that UT's research "will give us the background information needed to find the next ore deposit."

In a June 28 letter to the Austin Chronicle, Freeport Vice President for State Government Relations/Environmental Affairs D.J. Miller wrote that the UT project is "basic scientific research" because it will be published in scientific journals. The letter agreement between Freeport and UT dated April 18, 1989 and signed by the same D.J. Miller reveals the potential economic importance of UT research in Indonesia:

"The University shall keep confidential any propriety information obtained from Freeport Indonesia, which, where feasible, will be reduced to writing, subject to standard exceptions of public knowledge, prior knowledge, rightful third party disclosure and that which is required to be disclosed by law or other applicable regulation.

"Subject to the confidentiality restrictions hereinabove, the University shall have the right to publish the results of the Project, subject to consultation with Freeport Indonesia as to timing and inclusion of Freeport Indonesia generated information, and subject to considerations of patentability and impact of publication on the operations of Freeport Indonesia and its affiliates."

This clause in the research contract clearly violates traditional principles of academic freedom. Instead of having freedom to publish whatever information their investigation turns up in the academic tradition, UT scientists mush clear all published items with their corporate sponsors at Freeport. The content of their publications aren't simply limited by the academic integrity of the authors, but by "considerations of patentability and impact of publication on the operations of Freeport Indonesia and its affiliates."

Thus, the agreement takes information generated by state-employed UT professors and gives the University a financial interest in withholding that information from the public unless they can afford to pay. But Freeport gets it royalty-free. Not exactly public service.

Corporate profits or public service?

Since WWII American government and corporate interests have intensively and systematically planned for domination of world strategic resources. In its search for new territories to hold its economic and territorial expansion, now the University continues this tradition in its unofficial partnership with corporations like ClubCorp, Freeport McMoRan, and Franklin Federal. As national boundaries blur with the complex relationships of governments and multinational corporations, education has become a name for a process that blinds us to the economic connections that ultimately control the structure of our own lives.

It should not be commonly accepted for administrators, faculty, and regents to be "employed" by corporations working with the university. The worst kinds of corporate nepotism, supported enthusiastically by the University's Strategic Plan, are beginning to control the economics and politics not only of internal university affairs, but of the entire city.

University staff, students, and faculty must wake up and take their education into their own hands. It's war - between us and the Boards of Directors of companies richer than we can imagine. Perhaps Freeport's decision makers will show more respect for the health and livelihoods of the people in Austin than they have for the people of Indonesia. But should we trust this company, the nation's leading water polluter, with Barton Creek? With its shameful environmental record and its powerful boosters like Dedman and Cunningham, the company appears poised to exploit one of Austin's treasures without concern for the community. It's up to the Austin community to stop it.

Editors note: Environmental groups have called for a boycott on Franklin Federal because of its racist lending policies and the role of its parent company in the Barton Creek development - if you have an account with Franklin, pull it and tell them why.