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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

STALKING SUHARTO

Page 2


THE SUHARTO CHILDREN WERE also beneficiaries of state largess. Government-owned oil monopoly Pertamina was helpful in giving out contracts to trade and transport oil and natural gas. In most cases, the children acted as middlemen between Pertamina and the suppliers of services, taking commissions for their trouble. Bambang used this route to build his Bimantara group, which became one of the biggest companies on the Jakarta Stock Exchange when it was listed in 1995. The Suharto son eventually became the partner in Indonesia of prominent firms like Nestle, Mitsubishi and Deutsche Telekom. In 1997, Bimantara had annual turnover topping $400 million dollars. By then, the family and their friends, collectively known as "The Untouchables," were estimated to account for 10% of Indonesia's GDP.

Now, hounded by the nation's anger over the past and the desperation of the Asian Crisis, the Untouchables have become fair game. In canceling two Pertamina contracts awarded to Bambang and his younger brother, Hutomo "Tommy" Mandala, the government cited their disadvantageous terms. The deals involved the sale of underpriced crude oil to the siblings, who then resold the fuel abroad at high mark-ups. The government is reviewing other Suharto oil-and-gas contracts. In June, Tommy experienced the indignity of receiving an eviction notice from the Jakarta city government. He had built the twin-tower headquarters of his Humpuss group on prime land zoned only for low-rise government and social-welfare use. Humpuss has been given until November to vacate the site.

The powerful Hasan has been reduced to a suspect grilled for hours by the police. He and other bank owners are being investigated over the alleged misuse of 142 trillion rupiah ($12.8 billion) in credits extended by Bank Indonesia, the central bank, to their institutions. Hasan admits siphoning money allocated to Bank Umum Nasional to his cash-short pulp and paper project, Kiani Kertas. Under threat of prosecution, the Suharto friend has promised to repay the full amount. The Liem family and other shareholders of the nationalized Bank of Central Asia, which include Tutut and another sibling, Sigit Harjojudanto, must also repay $2.9 billion to the central bank by Sept. 21 or risk confiscation of Indofood and other assets.

Who is next? The government has imposed a travel ban on Bambang, who has been invited by the police to answer questions about alleged overlending to owners of Bank Andromeda. The Bambang-controlled financial institution was closed in November. The coming government session with Suharto is not expected to produce any surprises. Ghalib was quoted as saying after Suharto's TV address: "He is telling the truth because he is former president." Some believe the attorney-general will now focus on Hasan in order to deflect attention from the Suharto kids. The tough and abrasive timber tycoon is disliked even by fellow Suharto friends.

But non-government organizations are mobilizing to make sure the hunt for Suharto's wealth is pursued to the end. Corruption Watch's Masduki plans to present the attorney-general with detailed cases involving the Suharto children and Pertamina. He accuses the family of skimming more than $1 billion from the construction of the oil company's Cilicap refinery in the 1980s. Another organization, Gempita, is preparing to sue the government for not collecting $800 million in taxes and duties it says Tommy's Timor national automobile project owes the state. The group is also investigating the transfer of the government's Palapa satellite monopoly to Satelindo, a Bambang company. "We are asking about the disappearance of national assets," says Gempita lawyer Faisal Tajuddin.

Ordinary people are joining the crusade. Farmer Pak Rohman says the Suhartos took his land and that of his neighbors in the mid-1970s to build the 750-hectare Tapos cattle farm in Bogor. Within days of Suharto's fall, the farmers reclaimed part of the property despite harassment by security guards. "I'm not afraid," says Pak Rohman. "Times are hard and we must have this land to feed ourselves." The farmers' allies include the Bogor Legal Aid Institute - and activists of the new political party set up by Muslim leader Amien Rais, a possible contender in next year's presidential polls. The hunt for Suharto's wealth can become a potent election issue, which is what worries Habibie.

The Suhartos too. The family is said to be laying out money to cement their influence within the dominant Golkar party. But they also need fresh funds to revitalize their businesses. Tutut's listed Citra Marga Nusaphala Persada, which is building a toll road in the Philippines, has been badly hit by the rupiah's devaluation. And its Indonesian toll-road concessions may be placed under review. State toll-road agency Jasa Marga says it will investigate alleged corruption in toll-road concession deals. Tommy is already raising cash - he and his partners sold their stake in Italian sports-car maker Lamborghini in June for a reported $39 million. Tommy is also said to have disposed of his 80% share in petrochemical firm Kaltim Methanol Indonesia to Japanese partner Nissho Iwai.

But don't count the family out yet. Remember Ferdinand Marcos? As soon as she became president in 1986, Corazon Aquino formed an agency whose sole mission was to track down the ballyhooed $20-billion Marcos hoard. Twelve years on, only a fraction of the supposed riches has been found. And most of those assets, chiefly $570 million in Swiss deposits now in escrow in Manila, are still under litigation. Indonesia can draw lessons from this cautionary tale. The Suharto children may offer to give up part of their empire, retaining enough to remain substantial businessmen. "That would be bad," says political scientist Vedi Hadiz with a frown. "But it could happen." Compromises are possible. The time for them is clearly not now.

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PRICES REPORTED IN ASIAWEEK ARE IN U.S. DOLLARS UNLESS OTHERWISE SPECIFIED.


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