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Web-only Exclusives
November 30, 2000

From Our Correspondent: Hirohito and the War
A conversation with biographer Herbert Bix

From Our Correspondent: A Rough Road Ahead
Bad news for the Philippines - and some others

From Our Correspondent: Making Enemies
Indonesia needs friends. So why is it picking fights?

Asiaweek Time Asia Now Asiaweek story

A Foreign Influence?

Riady's friendship with Clinton has backfired

By Matthew Fletcher
and Keith Loveard / Jakarta


GRAND POLITICAL LARGESSE, OR a covert bid to buy influence in the U.S. government? That depends on which side in the U.S. presidential race you listen to. Either way, the $425,000 in Democratic Party donations from Arief Wiriadinata and his wife Soraya, an Indonesian couple based briefly in Washington., has got more than the capital's political wags talking. The Republicans say it is only the tip of an improper financial relationship between President Bill Clinton and his long-time friend James Riady, 39, scion of Indonesia's wealthy Riady family.

Even most of their critics concede the Riadys, who control the $6-billion Lippo Group, have not been found to have breached any U.S. laws. But last week the Clinton campaign removed John Huang, who collected the Wiriadinatas' contributions, from his fund-raising duties after accusations of impropriety arose over a fund-raiser he organized at a Buddhist temple in California. Coming just a few weeks before the Nov. 5 election, the move is unlikely to stop Republican presidential candidate Bob Dole from accusing Clinton of selling out to foreign interests.

Fueling the Republicans' charges: a key relationship. Soraya Wiriadinata is the daughter of Hashim Ning, co-founder of the banking, real estate and insurance group and, until his death last year, a partner of Lippo patriarch Mochtar Riady. The Democrats contend that the Wiriadinatas, legal residents in the U.S., donated the money in gratitude for get-well letters from Clinton to Ning while he was hospitalized after a heart attack. But Clinton's opponents speculate that the money came from others with ties to the Lippo Group who, as non-U.S. residents, were not entitled to contribute to the Democratic Party. Much of the money may have come after the Wiriadinatas returned to Indonesia.

The storm has spotlighted the Riadys' long-running connections to President Clinton. Since 1991, company executives and family members have contributed $800,000 to the Democratic Party. A number of ex-Lippo staffers have been on the Clinton administration's payroll, including Huang, who was a president of Lippo Group in the U.S. before he left in 1994 to join the Commerce Department.

For James Riady, the Clinton connection dates back more than a decade. He was dispatched to the U.S. in 1977 to learn the banking business. In 1984, the family bought into Worthen Bank, Arkansas's leading financial institution. As bank president based in the state capital, Little Rock, James met then-governor Bill Clinton. The Riadys later sold out of Worthen, but kept their ties with Clinton.

Over the years that friendship, some Republicans claim, gave Indonesia an inside track to the White House. In 1993 the U.S. government threatened to withdraw Indonesia's $600 million in trade privileges because of the country's labor policies. Then the U.S. backed down. Republican critics say Indonesia was given special treatment.

The biggest bonus for James Riady may have been the prestige of having a friend in the White House. He brought Indonesian associates to the inauguration, visited Clinton at the White House and when the president traveled to Jakarta for the 1994 APEC summit, James let it be known that he intended to invite him to Lippo's headquarters -- an idea rejected by his father.

That friendship is now brewing up trouble for the Riadys at home. Foreign Minister Ali Alatas called it "entirely a private matter." But others have been more critical. Suhardiman, deputy chairman of the president's Supreme Advisory Council, called Riady "unpatriotic" and said he was "asking the government to keep an eye on him."

For many Asian businessmen, the fuss over campaign donations is a mystery. According to Sofyan Wanandi, chairman of Indonesia's Gemala Group, "Riady deserves a medal" for his lobbying inside the White House. Cultivating ties to top people is standard practice, says Aburizal Bakrie, head of Jakarta-based Bakrie & Bros. The Republicans may have to concede that point: the Riadys gave Bob Dole $1,000 during his failed 1988 presidential campaign.

Lippo may have others problems. Its real estate companies are reported to face mounting debt from a property slowdown. Meanwhile, the Riadys have avoided talking to the press. Says a businessman who deals with the group: "The mood around Lippo is grim." A Clinton victory next month is not likely to change that.


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