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June 16, 2000 VOL. 29 NO. 23 | SEARCH ASIAWEEK

Kemal Jufri -- Corbis Sygma
No Longer Detached: Wahid has confirmed his meeting with Sapuan, but says he wanted the request for funds to go before parliament

Too Close for Comfort
Now, Wahid's associates are swept up by a multimillion-dollar scandal

The $4.1 million Bulog case bears all the usual marks of an Indonesian corruption scandal: state money, shady figures with links to the presidential palace, a ploddingly slow, almost hesitant, investigation. And that is what makes it all the more distressing. For the scandal occurred under the administration of President Abdurrahman Wahid. The cleric, popularly known as Gus Dur, came to power with a promise to establish clean, professional government -- the one demanded by 1998's student-led reformasi movement, the one necessary for relief from Indonesia's prolonged economic and political crisis.

The case seems to reveal just the opposite: an administration plagued by petty politicking and bickering, inefficiency and confusion, perhaps even greed and deception. The scandal concerns a fraction of the $80 million involved in the Bank Bali fund-siphoning case, which last year, along with the East Timor crisis, helped bring down Wahid's predecessor, B.J. Habibie. But precisely because of the high expectations placed on Wahid's administration, Bulog has become the country's hottest political issue. Says prominent intellectual Nurcholish Madjid: "This matter clearly involves the call of justice and equality before the law for every citizen." On May 29, a ministerial-level cabinet member, Acting State Secretary Bondan Gunawan, resigned in connection with the scandal. The Bulog case, and renewed separatism in eastern Indonesia (see page 24), are the latest threats to the stability of Wahid's barely eight-month-old administration.

The scandal involves a $4.1-million loan granted on Jan. 12 by Sapuan, the deputy chief of the former state food monopoly known as Bulog, out of the $238-million Bulog workers' foundation fund. According to Sapuan in a written account, he was approached by Wahid's masseur Suwondo, a man known for petty business schemes and big ambitions. (Sapuan first met Suwondo as a peddler of antique Korans.) Suwondo told him the funds were required to help Wahid solve separatist problems in Aceh, where a month earlier a huge rally had sparked worries that the northern tip of Sumatra might go the way of East Timor.

Sapuan claims he entertained the request because he knew Suwondo to be close to the president. The proof?A few days earlier, the masseur had arranged a meeting with Wahid. Among other issues, Sapuan checked if the president really did need Bulog's financial help in handling Aceh. According to Sapuan, Wahid said he needed half the $44 million from Bulog's off-budget "tactical funds" for Aceh. The deputy Bulog chief then asked for an official presidential decision before he disbursed the money.

Wahid's inquiry was not entirely out of order. For decades the executive branch treated various "off-budget" accounts -- financed out of state revenues but not included in its regular reports -- as discretionary funding. In 1994, for example, Suharto took $190 million from a reforestation fund to support sagging state aircraft maker IPTN. Placing such off-budget accounts back into the budget, which is reviewed and approved annually by parliament, is part of the International Monetary Fund-led reform program.

In a May 30 interview with Indonesia's Kompas newspaper, Wahid confirmed the early January meeting and his request. But, he explained, "I only asked. I had heard there were funds in Bulog. I asked: could this be used for Aceh? [The response:] Yes, sir, if with a presidential decision. I said, well, if it has to be with a decision, I think we should first put it into the budget then go to parliament -- it'll take a long time. So it didn't happen."

Sapuan may not have received that message. When Suwondo persisted in asking for the money, the deputy Bulog chief granted him a $4.1-million loan instead from the workers' foundation. It was repayable in one year at 18% interest and guaranteed with 200 hectares of land in West Java. The masseur signed the receipt over the words "President's Private Assistant." At this point, Sapuan says he does not know what happened to the money. But anti-corruption group Government Watch, or Gowa, does. It traced the Bulog checks and discovered that Suwondo's wife cashed in $1.2 million (since repaid). A man suspected to be involved in one of Suwondo's businesses -- a new airline company called Awair that once listed Wahid as a founder -- got about $600,000.

The largest sum, $1.7 million, went to a member of the Indonesian Democratic Party of Struggle (PDI-P) of Vice President Megawati Sukarnoputri. Another $600,000 was transferred to an account in Semarang, Central Java, the day after the opening of a PDI-P congress in the same city. At the congress, Acting State Secretary Bondan Gunawan, head of the president's office, the State Secretariat, had nominated himself for the position of secretary-general. According to PDI-P members, Gunawan told delegates his candidacy was supported by the president. No one voted for him.

No proof has surfaced that Gunawan used Bulog funds to support his campaign (Gunawan told Asiaweek such claims are "ridiculous"). Sapuan says the acting state secretary was among those who had asked about Bulog's off-budget funds because, he was told, "the State Secretariat did not have funds." Nonetheless, Gunawan's PDI-P venture appears to have played a part in his resignation. After learning that Wahid had not sent Gunawan into her party, the vice president joined those who insisted the president get rid of him. On May 29 -less than a week after the scandal broke -- Gunawan resigned, because "I didn't want to burden the president who already bears such a heavy burden." Gunawan told Asiaweek that he knew "very little" about the case and that he was being used as a scapegoat by forces hostile to Wahid.

Another suspected high-ranking official is Foreign Minister Alwi Shihab. Former trade and industry minister (and Bulog chief) Jusuf Kalla says Shihab called him in early April asking about the Bulog money. On May 24, the same day that Suwondo, in hiding, signed a statement in Jakarta promising to pay back the entire loan by the end of July, Shihab and the national police chief announced that the masseur had already fled abroad. On June 1, Shihab hotly denied any connection to the scandal. "I am whiter than this sheet of paper," he said. He, too, blames parties out to get the president.

Despite the lack of any evidence that Wahid was involved, he has been tarnished by allegations against Suwondo, his masseur; Shihab, his friend of 30 years; and Gunawan, his colleague in Democracy Forum, a network Wahid co-founded in 1991. The scandal feeds the political turmoil surrounding his government, which began with his dismissal of two ministers in late April. Nearly half of all MPs have signed a document calling for the president to be summoned officially by parliament to answer for the sackings. The challenges come on top of a drifting currency, a fragile economy and renewed separatist calls from West Papua, formerly known as Irian Jaya.

For his part, Sapuan feels he has been taken for a ride. At his June 3 questioning by parliament, he read a poem to Wahid that he had written while in detention: "For what have you thrown me behind iron bars/So that your Suwondo hides until clean from the aroma of collusion?" As of June 7, the missing masseur remains at large, although his wife and another recipient of the funds have been questioned. Wahid says he has no problems if people around him are summoned. "Let this be handled by the police," he said on June 5. "Let the law take its course." But as this latest corruption scandal shows, there can be a lot of difference between what the president idly asks and what is delivered.

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