Suharto Inc.: All in the Family

http://edition.cnn.com/ASIANOW/time/asia/magazine/1999/990524/cover1.html

Suharto Inc.: All in the Family

Indonesian officials say they can't find evidence of ill-gotten wealth. But a four-month TIME investigation reveals that the former President and his children now have assets worth $15 billion, including fancy homes, jewelry, fine art and private jets

The Family Firm 

A TIME investigation into the wealth of Indonesia's Suharto and his children uncovers a $15 billion fortune in cash, property, art, jewelry and jets 

By JOHN COLMEY and DAVID LIEBHOLD Jakarta

When the end came for Suharto, Indonesia's long-serving President appeared oddly passive. As students and angry mobs took to the streets and soldiers responded with gunfire and tear gas, the five-star general hovered in the background, making few attempts to set things right. When he finally quit a year ago this week, he stood meekly to the side as his successor, B.J. Habibie, took the oath of office. Suharto has hardly been heard from since. 

But Indonesia's onetime autocrat has been far busier than most of his countrymen realize. Just after his fall from power there began feverish movements of his personal fortune. In July 1998, reports emerged that a staggering sum of money linked to Indonesia had been shifted from a bank in Switzerland to another in Austria, now considered a safer haven for hush-hush deposits. The transfer caught the attention of the United States Treasury, which tracks such movements, and set in motion diplomatic inquiries in Vienna. Now, as part of a four-month investigation that covered 11 countries, TIME has learned that $9 billion of Suharto money was transferred from Switzerland to a nominee bank account in Austria. Not bad for a man whose presidential salary was $1,764 a month when he left office. (Suharto, for his part, denies that he has any bank deposits abroad and insists that his wealth amounts to a mere 19 hectares of land in Indonesia, plus $2.4 million in savings.) 

Those billions are just part of the Suharto wealth. Though the Asian financial crisis has trimmed the family empire considerably, the former President and his children retain a staggering fortune. It was built over three decades from a skein of companies, monopolies and control over vast sectors of economic activity in Indonesia--from oil exports to humble pilgrims making the yearly visit to Mecca. (They flew on planes leased from companies controlled by Suharto's children.) According to data from the National Land Agency and Properti Indonesia magazine, the Suharto family on its own or through corporate entities controls some 3.6 million hectares of real estate in Indonesia, an area larger than Belgium. That includes 100,000 sq m of prime office space in Jakarta and nearly 40% of the entire province of East Timor. 

Within Indonesia, the six Suharto offspring have significant equity in at least 564 companies, and their overseas interests include hundreds of other firms, scattered from the U.S. to Uzbekistan, the Netherlands, Nigeria and Vanuatu. The Suhartos also possess plenty of the trappings of wealth. In addition to a $4 million hunting ranch in New Zealand and a half-share in a $4 million yacht moored outside Darwin, Australia, youngest son Hutomo Mandala Putra (nicknamed Tommy) owns a 75% stake in an 18-hole golf course with 22 luxury apartments in Ascot, England. Bambang Trihatmodjo, Suharto's second son, has an $8 million penthouse in Singapore and a $12 million mansion in an exclusive neighborhood of Los Angeles, two doors down from rock star Rod Stewart and just up the street from his brother Sigit Harjoyudanto's $9 million home. Eldest daughter Siti Hardiyanti Rukmana may have sold her Boeing 747-200 jumbo jet, but the family's fleet of planes included, at least until recently, a DC-10, a blue-and-red Boeing 737, a Canadian Challenger 601 and a BAC-111. The latter once belonged to the Royal Squadron of Britain's Queen Elizabeth II, according to Dudi Sudibyo, managing editor of Indonesia's Angkasa aerospace magazine. 

Neither Suharto nor his six children responded to requests for interviews, though lawyers for the former President and son Bambang asserted that their clients did nothing illegal. Indeed, no one has proven that the Suhartos broke any laws. Their companies mostly consist of operating entities that turn profits, create jobs and import Western technology. Yet allegations that the former First Family benefited from favoritism, commonly heard in Indonesia since the early 1980s, began to grow louder when the former President resigned. His successor quickly announced an official investigation into such charges. Tommy, the youngest son whose corporate empire at one point included the Lamborghini sports car company, is already in legal jeopardy, facing charges of defrauding a state agency of $11 million in a real estate deal. The South Jakarta district court recently rejected a plea from Tommy's lawyers that he be tried in a civil court and is proceeding with a criminal trial. 

In an interview at the State Palace, Habibie told TIME he will not cover up for his former mentor, but he has so far declined to freeze the family's holdings or to follow up on the investigation in any meaningful way. Private asset-tracing firms are excited at the prospect of a Suharto treasure hunt, if only Jakarta would hire them. "In terms of dollars, we think this could be bigger than anything we have ever seen before," says Stephen Vickers, Asia chief for Kroll Associates, which helped investigate the wealth of the Philippines' former President Ferdinand Marcos. "My bags are packed." 

The search won't start in earnest unless the man in charge of the government's investigation, Attorney General Andi Muhammad Ghalib, gives the go-ahead. Ghalib, a three-star general in the Indonesian military, told TIME that he has found no evidence that his former supreme commander wrongly acquired state assets. But Ghalib has been moving slowly, and some of his own staff members are not convinced the investigation is serious. In the opinion of an official in the Attorney General's office, "Ghalib is on a mission to protect Suharto." 

Nonetheless, the code of secrecy shielding the family is breaking down. After hundreds of interviews with former and current Suharto friends and government officials, business associates, lawyers, accountants, bankers and relatives, as well as examinations of dozens of documents (including bank records of outstanding loans), TIME correspondents found indications that at least $73 billion passed through the family's hands between 1966 and last year. Much of that was from the mining, timber, commodities and petroleum industries. Bad investments and Indonesia's financial crisis have reduced the sum substantially. But evidence indicates that Suharto and his six children still have a conservatively estimated $15 billion in cash, shares, corporate assets, real estate, jewelry and fine art--including works by Indonesian masters Affandi and Basoeki Abdullah in the collection of Siti Hediati Hariyadi, the middle daughter known as "Titiek." 

Suharto laid the foundation for the family fortune by establishing the intricate nationwide system of patronage that kept him in power for 32 years. His children, in turn, parlayed their ties to the President into the role of middlemen for government purchases and sales of oil products, plastics, arms, airplane parts and petrochemicals. They held monopolies on the distribution and import of major commodities. They obtained low-interest loans by colluding with or even strong-arming bankers, who were often afraid to ask for repayment. Subarjo Joyosumarto, managing director of Bank Indonesia, the central bank, confirms that during the time of Suharto, "there was an environment that made it difficult for the state banks to refuse them." 

While the Indonesian economy was growing fast, it was possible to make light of the Suhartos' rent-seeking ways. Now, with half the population below the poverty line as a result of the financial crash, there is little doubt that the family grew wealthy at the expense of the nation. A former business associate of the children estimates that they skipped tax payments of between $2.5 billion and $10 billion on commissions alone. "It is very likely that none of the Suharto companies has ever paid more than 10% of its real tax obligations," says Teten Masduki, an executive member of Indonesian Corruption Watch, an anti-graft non-governmental organization. "Can you imagine how much revenue has been forgone?" 

Many Indonesians also blame Suharto for creating a climate of corruption that pervaded the entire economy. The World Bank estimates that as much as 30% of Indonesia's development budget over two decades disappeared through civil-service-wide corruption that filtered down from the top. "If you don't pay bribes, people think you're odd," says Edwin Soeryadjaya, a director of an Indonesian-U.S. telecommunications joint venture. "It's very sad. I cannot say that I'm proud to be an Indonesian. This is one of the most corrupt countries in the world." 

GREAT EXPECTATIONS

How did Suharto Inc. attain its wealth, its power and its hold over the imaginations of millions of Indonesians? When Suharto became acting President of Indonesia in 1967, his unique blend of forcefulness and Javanese political subtlety was already manifest. The ousting of "President for Life" Sukarno, the nationalist founder of the country, took two years and, through an accompanying anti-communist purge, claimed as many as 500,000 lives. But Suharto, an obscure general from a hardscrabble village in central Java, led an outwardly modest life. He and his late wife Siti Hartinah ("Madam Tien") initially lived in a simple bungalow in the Menteng district of Jakarta and drove a 1964 Ford Galaxy. That was in marked contrast to Sukarno, the self-styled "God-King," with his grand presidential palace and his glamorous third wife Dewi, a former Japanese hostess at Tokyo's Copacabana nightclub.

Behind the facade, however, Suharto showed an early interest in making money. In the 1950s, he was allegedly involved in sugar smuggling and other extra-military activities in Central Java that may have cost him command of the Army's Diponegoro Division during a 1959 anti-corruption drive. In his autobiography, Suharto asserts that he bartered sugar for rice to ease a local food shortage and that he did not benefit personally. In any case, the military transferred Suharto to a less influential position at the army staff college in Bandung, West Java.

In 1966, Suharto Inc. began to take shape. Before being officially named President, Suharto issued Decree No. 8 to seize two Sukarno-controlled conglomerates with combined assets of $2 billion. They became PT Pilot Project Berdikari, a company that Suharto placed under the management of Achmad Tirtosudiro, a former general who now heads a powerful Muslim organization founded by President Habibie. The firm was to become one of the main levers of the Suharto empire.

The President's fortunes began to soar along with those of a few close associates, most prominently Liem Sioe Liong and The Kian Seng, better known as Mohammad "Bob" Hasan. In late 1969, Suharto gave a partial monopoly--it later became total--over the import, milling and distribution of wheat and flour to PT Bogasari Flour Mills, controlled by Liem's Salim Group. Over the years Liem--known as "Uncle Liem" to the Suharto brood--and Hasan became Suharto's most trusted non-family associates and eventually amassed vast commercial empires.

The bedrock of the Suharto fortune was the presidential yayasan, or foundation. Dozens were set up, ostensibly as charities, and they have in fact funded a large number of hospitals, schools and mosques. But the foundations were also giant slush funds for the investment projects of the Suhartos and their cronies, as well as for the ex-President's political machine, Golkar. According to George Aditjondro, a sociology lecturer at Australia's University of Newcastle, they ultimately numbered 97 and were controlled by Suharto, his wife (who died in 1996), her relatives in the countryside, his cousin and half-brother, the six children, their spouses and parents, trusted military men and associates such as Habibie, Hasan and Liem. "The foundations bought stocks, built companies, lent money to businessmen," says Adnan Buyung Nasution, a lawyer who last year tried unsuccessfully to set up an independent commission on the Suharto wealth.

The foundations accepted "donations," though they were often less than voluntary. Beginning in 1978, all state-owned banks were required to give 2.5% of their profits to both the Dharmais and Supersemar foundations, according to former Attorney General Soedjono Atmonegoro. Suharto's Decree No. 92, in 1996, required that each taxpayer and company making more than $40,000 a year donate 2% of income to the Dana Sejahtera Mandiri foundation, set up to support poverty-alleviation programs (the order was rescinded last July). To this day, civil servants and members of the military donate a portion of their monthly salaries to the Amal Bakti Muslim Pancasila foundation, which was used by Suharto to win Muslim support.

While "donations" provided most of the foundations' revenue, there were other sources as well. In 1978, Suharto foundations took control of 60% of Bank Duta, a leading private bank, according to a former Bank Duta official. That share was gradually increased to 87%. The foundations invested heavily in private companies established by Suharto family members and cronies. After that, a helpful ministry or state-owned firm would award a contract or a monopoly to those companies.

Since Suharto's downfall, the foundations have been a major target of Indonesian investigators. Soon after Suharto's resignation, then-Attorney General Soedjono examined the books of the four largest yayasan. What he found was unsettling. "These foundations were set up to deliver social services," he says, "but Suharto had distributed the money to his children and friends." Soedjono discovered that one of the largest foundations, Supersemar, had dispersed 84% of its funds on unauthorized pursuits, including loans to companies owned by Suharto's children and friends. Suharto, as chairman, had to sign any check over $50,000. Soedjono submitted a preliminary report on his findings to President Habibie last June. He was fired five hours later. (The President says Soedjono was dismissed because he stepped outside the line of command on another matter.)

OIL AND LAND

The Suharto reach extended well beyond the foundations' interests, and few deals were more lucrative than the family's oil businesses. In his first decade in power, Suharto allowed state oil conglomerate Pertamina to be run as a private fief by its founder Ibnu Sutowo, a former general once known as the second most powerful man in Indonesia. Sutowo's plan to build a huge tanker fleet for Pertamina brought it to the brink of financial collapse in 1975. He was fired the following year, though it wasn't clear whether the cause was mismanagement or his political ambitions. Now 84, Sutowo tells TIME it was neither. He says Suharto asked him in 1976 to set up a second trading company to ship Indonesian crude oil to Japan. "He said to me, 'I want you to take $0.10 for every barrel traded by the new company,'" Sutowo recalls. "When I said no, I think he was shocked."

After Sutowo was fired, Pertamina eventually imported and exported much of its oil through Perta Oil Marketing and Permindo Oil Trading, two small companies in which Tommy and older brother Bambang acquired significant stakes in the mid-1980s. According to a senior official in Habibie's government, the firms received a commission of $0.30 to $0.35 a barrel. In the 1997-98 fiscal year, the two companies handled an average of 500,000 barrels a day, for yearly commissions of more than $50 million. Says former Mines and Energy Minister Subroto: "Pertamina could have exported directly. There was no need for these companies."

In addition, a former business associate of Tommy and Bambang says there were extra, unofficial markups on oil exports and imports that earned the firms as much as $200 million a year in the 1980s, when prices were high, and about half that in the 1990s. Suharto family companies received Pertamina's contracts for insurance, security, food supplies and other services--a total of 170 contracts in all. Last year, shortly after Suharto's fall, Pertamina canceled many of them and announced instant savings of $99 million a year. Says the former associate of the Suharto scions: "They milked Pertamina like a cow."

One major Suharto money spinner was PT Nusantara Ampera Bakti, or Nusamba, which was launched with $1.5 billion in 1981 by three of the foundations, together with Bob Hasan and Suharto's eldest son Sigit (who held 10% each). The firm became a sprawling conglomerate with more than 30 subsidiaries in finance, energy, pulp and paper, metal and automobiles. Nusamba's jewel was a 4.7% share in Freeport Indonesia, an American-controlled company that runs the world's largest gold mine in the province of Irian Jaya. In 1992 the foundations apparently transferred their 80% share to Hasan, though it is not clear how much he paid for it. So far, government investigators have not asked to see Nusamba's books. Says Otto Cornelis Kaligis, head of Suharto's eight-member legal team: "When you talk about Nusamba you have to ask Bob Hasan. In the investigation of President Suharto, the Attorney General never asked any questions about Nusamba."

The family profited not only by winning concessions from the government but occasionally by disrupting the lives of individual Indonesians who stood in the way. When Suharto wanted to build a cattle ranch getaway in West Java in 1973, he displaced the inhabitants of five villages spread over 751 hectares. According to official records, he paid a total of $5,243 in compensation. Some villagers say they got nothing. Muhammad Hasanuddin, who was a boy at the time, remembers when his family's two-hectare rice farm was lost. "We saw the fat cows, herded by dozens of men pompously riding on horseback, trampling our ruined fields. The whole family could only cry." Hasanuddin's father ended up as a pedicab driver in Jakarta.

Similar stories abound. In 1996, a company owned by Tommy forced villagers off their land in Bali to build a 650-hectare resort. The firm had a permit for only 130 hectares, which it illegally expanded, according to Sonny Qodri, chairman of Bali's Legal Aid Institute. Residents who refused to sign an agreement to sell their land were intimidated, beaten and sometimes put in a pond up to their necks. Two were brought to court and jailed for six months. Nothing remains of the project now: recession hit just as the bulldozers were moving in.

Hasan Basri Durin, chairman of the National Land Agency and Minister of Land Affairs, says the Suharto family typically paid peanuts for the property it acquired--the average was 6% of market value--and reluctant sellers often changed their minds after visits from thugs or soldiers. "Sometimes they didn't pay one cent," says Hasan. "But it's legal because they [the Suhartos] have the documents." Only about half of Indonesia's farmers hold a registered title to their land, so proving ownership can be difficult--and proving intimidation even harder. As a result, few have come forward to complain.

CHILDREN OF FORTUNE

For years, Indonesia's corruption was the kind of petty favor-buying and commission-giving commonly found in the developing world. Two factors pushed the country into a league of its own. The first was Indonesia's position as an up-and-coming star performer in the Asian economic miracle, which brought a cascade of funds pouring into businesses and real estate. The World Bank estimates that between 1988 and 1996, Indonesia received more than $130 billion in foreign investment. "All this has been possible under the eyes of the West, which supported Suharto for 30 years," says Carel Mohn, spokesperson for Transparency International, a non-governmental organization based in Berlin.

The second factor was "the children," as the Suharto kids are known. All six are involved in business, a calling for which they were groomed from an early age. "I remember when we were younger, me and Bambang and his other friends would go over to Uncle Liem's house," says a childhood pal of Suharto's second son. "Uncle Liem would always give us a package of money wrapped in newspaper." The package, he recalls, would contain banknotes worth $1,000 or more. Says Wati Abdulgani, a businesswoman who dealt with a family company in the 1980s: "The kids saw what was being given to their uncles and they thought, 'What about us, when we grow up?'"

Sigit, the eldest son, was apparently pushed into business by his mother, Madam Tien, whose own behind-the-scenes dealings in the 1970s earned her the nickname "Madam Tien Percent." A friend of Mrs. Suharto recalls a conversation with her at the time the government was building Jakarta's Soekarno-Hatta International Airport. "She told me, 'I want Sigit to learn about business,'" says the friend. "I told her I thought he should first finish university. She said, 'No, no, Sigit can't think straight.'" Two sources who worked on the airport project say that by the time both terminals were finished in 1984, $78.2 million had been given to Sigit in markups that appeared as cost overruns. He graduated to bigger deals. The collection of ticket proceeds from a national lottery, set up in 1988 by the Department of Social Affairs, was handled by a Sigit-linked company until Muslim leaders' anti-gambling protests forced its closure in 1993. "The gambling scheme earned Sigit and his company millions of dollars every week," says Christianto Wibisono of the Indonesian Business Data Center, which has been gathering information on Suharto-related businesses and other firms since 1980.

Second son Bambang, who founded the Bimantara Group in 1981 with two members of his former rock band, was helped in business by Uncle Liem. From 1967 until last year, the National Logistics Agency (Bulog) imported and distributed basic commodities such as wheat, sugar, soybeans and rice through Suharto-linked companies, including six belonging to Liem. At Bambang's request, Liem gave him a slice of the business. Through sugar trading alone, the son is estimated to have earned as much as $70 million a year, essentially for stamping documents. The system worked so well that each of the children was given a cut as he or she moved into business, a practice that continued until last year. From 1997 to '98, Liem had a contract from Bulog to import about 2 million tons of rice valued at $657 million. As part of that contract, Suharto's youngest daughter Siti Hutami Endang Adiningsih ("Mamiek") imported 300,000 tons of rice worth $90.3 million. Over the past 18 years, under the pretense of stabilizing food prices, the Suhartos' deals with Bulog have earned them an estimated $3 billion to $5 billion, according to a former government official.

Eldest child Tutut rose to become the queen bee of the Suharto clan. The base of her empire is Citra Lamtoro Gung Group, and its first big business was building and operating toll roads. The group's toll-road arm won its first project in 1987 after the government turned down two competing bids. Financing came from two government banks, a state-owned cement company and a Suharto foundation. When the president of state-owned Bank Bumi Daya turned down Tutut's request for an interest-free loan, he was fired. By the mid-1990s, her roads were earning $210,000 a day, and in 1995 the concession on her Intra Urban Tollway System, the most lucrative in Indonesia, was extended through the year 2024. Explains Teddy Kharsadi, director of corporate affairs at toll-road company PT Citra Marga Nusaphala: "The extension was a reasonable consequence of our investment."

Tutut's empire also includes telecommunications, banking, plantations, flour milling, construction, forestry, sugar-refining and trading. Foreign companies learned to take on a Suharto as a partner if they wanted to do business in Indonesia, and Tutut was first on most lists. "A lot of big multinationals insisted on having the right connections, and these were certainly useful to them," says Graeme Robertson, an Australian-born Indonesian citizen whose Swabara Group is active in coal and gold mining. At the peak of Tutut's power, according to sources close to the family, investors seeking to meet her first had to pay as much as $50,000 as a "consulting fee" to her minders.

In the early 1990s, Indonesia began to heed the advice of market-oriented economists to privatize many of its state firms. The First Family was a major beneficiary. Suharto ended the state telecommunications monopoly in 1993--by giving licenses for an international direct-dial operation and for Indonesia's first digital mobile phone network to Bambang's PT Satelit Palapa Indonesia (Satelindo). At the same time, state-owned PT Telkom transferred its customer base to Satelindo when it launched its own satellite, the country's third, with the help of a $120 million loan from the U.S. Export-Import Bank. TIME has learned that Jakarta gave Satelindo the licenses and Telkom's customers without a tender or payment. Thanks to the government, Bambang found himself in control of the company, which the market valued at $2.3 billion in 1995 when a subsidiary of Germany's Deutsche Telekom paid $586 million for a 25% stake. Bambang also received a major share of a $90 million facilitation fee from Deutsche Telekom as part of the sale.

TOO MUCH OF A GOOD THING

The Suharto children's interests became so extensive they started colliding with each other. Bambang and Tutut vied to set up their own television stations. Tommy competed with brother Sigit in aviation and with Bambang in shipping and car production. In 1990 the government solicited bids for a contract to provide switching equipment for 350,000 telephone lines. Japan's NEC teamed up with a company controlled by Bambang. Competitor AT&T gave Tutut a 25% share in its local venture, now called PT Lucent Technologies Indonesia. The project was ultimately split 50-50 between Tutut's AT&T group and Bambang's NEC. In 1996, Tutut came up against Sigit for rights to develop the vast Busang gold mine in East Kalimantan. Tutut's partner, Canadian company Barrick Gold, was opposed by Sigit's partner, Bre-X Minerals. This time, both sides lost; Busang turned out to be the biggest hoax in mining history.

The competition grew so intense that the Suharto progeny began seeking monopolies in ever-narrower lines of business. Bambang got a contract to import the special paper used by the national mint. Tutut took over the processing of drivers' licenses. A company owned by Sigit's wife, Elsye, became the sole authorized producer of Indonesia's mandatory identification cards. In 1996 Suharto grandson Ari Sigit devised a scheme to sell $0.25 revenue stickers as proof of tax payment for every bottle of beer and alcohol consumed in Indonesia (that business collapsed when producers stopped shipping beer to tourist mecca Bali in protest). Nine months before Suharto's resignation, Ari was gearing up to launch a "national shoe project"--all Indonesian children would have to buy school shoes from his company. "At the end," says an American lawyer with 20 years' experience in Indonesia, "the only thing that was transparent was the corruption."

When the Suharto regime fell, the children used their influence to extricate themselves from ailing businesses and debts. In April 1994, Tommy launched the Goro supermarket chain with two of his companies and the Central Village Cooperative, a large, government-run farmers' organization. Together they borrowed more than $100 million in loans, according to Bank Bumi Daya records. No repayments were ever made on the loans. On May 4, 1998, Tommy sold his shares to the farmers and their cooperative for $112 million in cash, saddling them with the entire debt. "The children were very wild," says Ibnu Hartomo, younger brother of Madam Tien. "It seems that they have forgotten about ethics." Angry mobs burned down one Goro store in south Jakarta during riots in May 1998, a week before Suharto resigned.

Though much of the Suharto fortune has been lost through mismanagement and the country's economic collapse--Tommy's PT Sempati Air, for instance, went bust in 1998--the family still has many viable businesses. One of many small examples: Sigit's PT Panutan Selaras produces 25% of the "premix" high-octane gasoline used in Indonesian cars and owns 22 filling stations in Jakarta, Surabaya and Central Java. Tommy's PT Humpuss Trading, meanwhile, is also producing the high-end gasoline.

And then there's real estate. While prices have plunged in Indonesia, the family's property holdings are today worth $1 billion, and many--including rubber and sugar plantations, malls and hotels--continue to bring in revenue. In the mid-1980s, Bambang paid the government $700 per sq m for a plot of land in central Jakarta on which now sits the Grand Hyatt Hotel, the prime asset of his publicly listed PT Plaza Indonesia Realty. In Bali, the children ended up with some of the most lucrative gems of the tourist industry: Bali Cliff Hotel (Sigit), Sheraton Nusa Indah Resort (Bambang), Sheraton Laguna Nusa Dua (Bambang), Bali Intercontinental Resort (Bambang, until two months ago), Nikko Royal Hotel (Sigit, until six months ago), the Four Seasons Resort in Jimbaran (Tommy) and the Bali Golf and Country Club in Nusa Dua (Tommy). Tutut and Tommy bought the land under Jakarta's National Police Headquarters for a fifth of its market value. Minister of Forestry Muslimin Nasution says 4.5 million hectares of forest and plantation land is connected to the Suharto children. Observes Melbourne-based economist Michael Backman, who has written about the Suhartos in his book Asian Eclipse: Exploring the Dark Side of Business in Asia: "Anyone who says the family businesses are broke has got it wrong. They still have shares in timber, oil palm plantations and hotels, all of which are big dollar earners."

THE WHEELS OF JUSTICE

Suharto continues to insist that his assets are modest and located entirely in Indonesia. "He told me, 'I don't have one cent abroad,'" says Kaligis, his top lawyer. "If anyone is found to have set up an account in his name overseas, he has instructed me to launch a lawsuit against them." Since Suharto resigned, son Bambang and his family have been spending time in Los Angeles; Titiek has been in Boston, where her son goes to high school. The rest of the Suhartos live most of the year in Indonesia. Sigit spends hours on his favorite Versace couch (no one else is allowed to sit on it), playing video games and watching tapes of Javanese shadow puppet performances.

But the wheels of justice have barely started moving. Attorney General Ghalib says Suharto has handed over to the government seven foundations with $690 million in assets. Members of Ghalib's own staff, however, say Suharto continues to control those holdings and that the foundations are worth far more than that. Three of the foundations together have an 87% stake in Bank Duta, which had assets of $1 billion in 1990. Yet in investigating the foundations, Ghalib has not gone beyond their printed records, which he has turned over to a state auditing board for analysis. Says Ghalib's predecessor Soedjono: "This investigation isn't going anywhere."

The ongoing reform of Indonesia's banking sector also seems to be helping Suharto family members and associates cover up their debt obligations. Last October, the government announced a plan to merge four state banks--with a total of $11.5 billion in nonperforming loans--into one. The six Suharto children and several companies affiliated with them are listed by the government as owing $800 million in bad debts to the four banks. The amount may well be understated: between them, Bambang and Tommy have $635 million in bad loans from just one of the four, Bank Bumi Daya. An official with the bank says that its accounts were falsely reported to the government, including $172 million lent to Hashim Djojohadikusumo, Titiek's brother-in-law, to buy stock in another bank. Borrowing money to purchase bank shares is illegal in Indonesia. Asked to respond, Hashim's office said he was too busy for an interview. When TIME informed Habibie of the loan, the President immediately began looking into it.

A genuine investigation into the Suharto booty will probably have to await the next government. A parliamentary election scheduled for June 7, to be followed by a presidential vote in November, could change the political equation substantially. Two leading presidential candidates, Amien Rais and Abdurrahman Wahid, say they would order a trial for Suharto, probably followed by a pardon if he returns ill-gotten gains. Megawati Sukarnoputri, daughter of founding President Sukarno and herself a presidential candidate, hasn't made her stand clear. Some analysts think she will leave Suharto alone, out of gratitude for his not imprisoning her father.

The children, however, could be in for rougher treatment. "As long as their father is alive," says a Suharto family friend, "he can probably protect them. After he's gone, they're going to have to run." Three of the six children have homes in the U.S., so prosecutors there could go after them under tough new laws aimed at corruption and money laundering. Bambang, meanwhile, controls two U.S.-listed companies, which could be subject to investigation under the Foreign Corrupt Practices Act.

Suharto himself has at least one strong legal shield: the presidential decrees that laid the foundation for Suharto Inc. Former Finance Minister Mar'ie Muhammad's anti-corruption watchdog, the Indonesian Transparency Society, has labeled as illegal 79 of the 528 such orders issued between 1993 and May 21, 1998. Yet Suharto was careful to have each decree approved by his rubber-stamp parliament, usually at the end of his five-year presidential terms. Moreover, notes Juan Felix Tampubolon, one of Suharto's lawyers, Indonesia has a statute of limitations on most offenses: "For every crime he committed, if any, before 1981, the right to prosecute has expired under the statutory period." For Suharto of Indonesia, that--along with $9 billion in an Austrian bank-- should offer considerable comfort in retirement.

With reporting by Zamira Loebis, Jason Tedjasukmana and Lisa Rose Weaver/Jakarta, Laird Harrison/Los Angeles, Isabella Ng/Hong Kong, Kate Noble/London and other bureaus

http://edition.cnn.com/ASIANOW/time/asia/magazine/1999/990524/chart.html

A Talent for Business

Cash and assets acquired by the family over 30 years

 

The Suharto Children

http://edition.cnn.com/ASIANOW/time/asia/magazine/1999/990524/suharto_family_tutut.html

Siti Hardiyanti Rukmana "Tutut"

Age: 50

Estimated wealth: $700 million

Major holdings: Citra Lamtoro Gung Group, with interests in more than 90 companies ranging from telecommunications to infrastructure, including tollway projects in Indonesia and the Philippines

Property: 12-room, $1 million house with tennis court and heated pool near Boston; house on London's Hyde Park Square

Last sighted: Requesting a hike in tollway rates from Indonesia's parliament

Operating style: Politically ambitious, Tutut ascended to the level of Minister of Social Affairs in her father's last cabinet. Got her start in business at age 25, when "Uncle" Liem Sioe Liong gave her 14% of BCA, the country's largest private bank. She has also adopted her nephew Ari Sigit's out-of-wedlock daughter, Suharto's great-grandchild. A family friend who traveled to San Francisco on one of Tutut's jets attests to her generosity: "She gave me a first-class ticket home to Jakarta. I can still remember the smell of leather seats and Armani cologne in the bathrooms"

photo: AP

http://edition.cnn.com/ASIANOW/time/asia/magazine/1999/990524/suharto_family_bambang.html

Bambang Trihatmodjo

Age: 45

Estimated wealth: $3 billion

Major holdings: 38% of Bimantara Citra, one of Indonesia's largest conglomerates with 27 subsidiaries and interests in everything from oil and gas to hotels, telecommunications and animal feed

Property: $8.2 million Singapore apartment, $12 million Los Angeles estate (a visitor says the latter has two houses, two swimming pools, a tennis court and a basketball court. "The interior design in the guest house was sort of nouveau riche, but worse, with tiger-striped fabric on the couches")

Last sighted: At a bowling alley near Los Angeles

Operating style: Has been transferring cash overseas and buying shares in foreign markets for several years. In 1997, say Dutch authorities, he made a "private visit" to the Netherlands-controlled Caribbean island of Curaçao--apparently to make a large deposit in the local branch of an international bank. A friend says Bambang once cared about the needy but something happened on the way to the bank: "I think he saw all the people around him getting rich and felt left out"

photo: AP

http://edition.cnn.com/ASIANOW/time/asia/magazine/1999/990524/suharto_family_tommy.html

Hutomo Mandala Putra "Tommy"

Age: 36

Estimated wealth: $800 million

Major holdings: 60% of Humpuss Group, which has more than 60 subsidiaries in industries ranging from construction to pharmaceuticals

Property: Ranch in New Zealand, Mill Ride Golf Club, an 18-hole course he partly owns in Ascot, England. Plays there twice a year and is said to have a respectable 12 handicap

Last sighted: Jakarta courthouse, where he is the only Suharto child to stand trial for graft

Operating style: Accomplished stock car racer (once sponsored by Marlboro). Like brother Sigit, he loves to gamble, thinking nothing of losing $1 million in a single sitting. One gaming partner says he used to leave Jakarta on his plane with millions of dollars to wager in European casinos and stop in Singapore on the way home to deposit what was left. "Tommy loves money," says a former business partner. "And he always wanted it up front." Like his father, says a friend of the family, Tommy is "very polite, very cool"

photo: AP

http://edition.cnn.com/ASIANOW/time/asia/magazine/1999/990524/suharto_family_sigit.html

Sigit Harjoyudanto

Age: 48

Estimated wealth: $800 million

Major holdings: 40% of brother Tommy's Humpuss Group; silent partner in hundreds of other companies and properties

Property: Two homes in exclusive Hampstead area of London worth $12 million each, one in Los Angeles, one outside Geneva

Last sighted: Suharto family compound in Jakarta neighborhood of Menteng

Operating style: Serious gambler. Frequented roulette and baccarat tables in London (he loved the Ritz), Atlantic City, Las Vegas and Perth; gambling partners say he wagered up to $3 million a night, with career losses of more than $150 million. After Sigit suffered a bad run in Las Vegas in the late 1980s, his father banned him from gambling abroad. Jakarta bookies organized a call-in cable TV show featuring a baccarat table; Sigit, a friend says, lost more than $20 million: "They set up the scam just for Sigit"

http://edition.cnn.com/ASIANOW/time/asia/magazine/1999/990524/suharto_family_mamiek.html

Siti Hutami Endang Adiningsih "Mamiek"

Age: 34

Estimated wealth: $30 million

Major holdings: Stakes in several of her siblings' companies plus interests in fruit, transportation and telecommunications. In 1995 the government appointed her company Manggala Krida Yudha to undertake a $500 million reclamation project expanding the North Jakarta seaport. She in turn tried to subcontract the project to Hyundai Engineering for $100 million, but the deal was canceled by the government in an effort to purge corruption

Property: 264-hectare fruit park in West Java

Last sighted: At her home in Jakarta

Operating style: Low-profile chain-smoker. Entered business too late to make much money. Is widely known for her Mekarsari Park near Bogor, set up in 1995 to promote botanical research. A friend says she once approached Mamiek with a business venture. Mamiek got back to her a week later: "I can't do it. Daddy already gave that to Tommy"

photo: AFP

http://edition.cnn.com/ASIANOW/time/asia/magazine/1999/990524/suharto_family_titiek.html

Siti Hediati Hariyadi "Titiek"

Age: 40

Estimated wealth: $75 million

Major holdings: Financial services, power, computers, banking, property

Property: Home on London's Grosvenor Square

Last sighted: Boston, where her son is attending high school. Her husband, Lieut. General Prabowo Subianto, is in Jordan looking after his brother's business interests and visiting an old friend, Jordan's King Abdullah

Operating style: Chain smoker. Hates dogs. In Jakarta, she slept in one room; her husband and his Alsatians in another. Likes Harry Winston, Bulgari and Cartier. "She loves big chunks of jewelry," says a woman who has accompanied her on excursions to Switzerland and England. Former chairwoman of the Indonesian Fine Arts Foundation, Titiek has a personal art collection valued at more than $5 million. Adores movie stars. At a 1994 Suharto party in Bali to celebrate the opening of Jakarta's Planet Hollywood, she danced the night away with martial arts star Steven Seagal

photo: AP

http://edition.cnn.com/ASIANOW/time/asia/magazine/1999/990524/ag1.html

"I Never Asked"

The Attorney General has few answers

Attorney General: "It's Very Hard"

WEB EXCLUSIVE

On April 8, 1999, TIME corespondents met in Jakarta with Indonesian Attorney General Andi Muhammad Ghalib and two of his aides, director generals Anton Sujata and Soehandjono, to discuss the official investigation into President Suharto's wealth. The following are expanded excerpts:

TIME: In investigating Mr. Suharto's social foundations (yayasan), have you found that some of their funds went to the wrong places?

GHALIB: Yes, some of the money was not used for social prosperity or social purposes.

TIME: And that's not enough to charge the former President?

GHALIB: There's a problem, because to make the charge of corruption, we have to prove that money came from the state, and is not private.

TIME: The preliminary report on the foundations by former Attorney General Soedjono found that many...

SUJATA: Pak Soedjono never gave information. We found all the information from my team.

TIME: But what about his audit? You've seen his audit, right?

SUJATA: On the yayasan, yes. From the aspect of civil and administrative cases: that is Pak Soedjono. Mr. Ghalib and I have taken the criminal aspect. So the first time we didn't have any information from Pak Soedjono.

TIME: Except his audit.

SUJATA: Audit to him, not to me.

TIME: But in that audit by Pak Soedjono, there seems to be a basis for charging Suharto with misusing money meant for natural disasters, building mosques. I'm wondering on this question of charging other members of the family.

GHALIB: This is based on the foundations, actually. Mr. Soedjono left this case, but only about the foundations--only five foundations--and found only about one trillion or more, but we increased it.

TIME: To 2.4?

GHALIB: Yes, 2.4. As soon as I became the Attorney General, Mr. Soehandjono and I increased this. We found it because we tried to make it a legal and financial audit--very serious.

TIME: Do you think it's likely that other members of the former First Family will be charged? At the moment Tommy is being investigated.

GHALIB: As you know, Tutut, Bambang, Sigit--all of them are businessmen. If we have proof that they're corrupt, of course, according to our law, there must be two--what do you say--two basic, or two pieces of evidence of corruption. One is that state money is lost and the second one is that it is against the law. So if you say there is corruption we have to look for whether it is the state money and if the state lost money or not. If you find it, it's a corruption case.

TIME: In all of these months, all that you've investigated is the national car case [Mobnas], the foundations, and you've made inquiries, what, with embassies, regarding their assets abroad?

GHALIB: Yes, yes.

TIME: Why isn't your investigation any broader than that? There are so many other allegations.

GHALIB: Yes, that's a good question. But I have to tell you that because the focus of our investigation is Mr. Suharto, just Mr. Suharto first. So, if we want to make it good, we must look for more and more proof on Mr. Suharto himself. We have to separate him from his family.

TIME: So you're still in the stage of preliminary investigation?

SUJATA: From December 1998.

TIME: On the basis of your investigation so far, and the other information that is available to you, do you suspect that the former president has broken the law in any respect?

GHALIB: Ya, kita curiga. [Yes, we suspect.] Kita, what do you say, suspicion. We have to increase this preliminary investigation, and if it's proven, we have to increase it. This is our aim now: to increase it.

TIME: If you suspect that there has been corruption or embezzlement or fraud, somewhere, even if you haven't found it, why haven't you asked foreign governments to freeze assets that the former President may have overseas?

GHALIB: Many people have asked me about that. It's very hard, you know, because, we start with the law. So, without any proof, without any evidence, it's too hard to say. So, I already sent a letter to the Minister of Foreign Affairs to find out whether there is [money], abroad, in a bank, maybe some land, houses and so on. The minister has found nothing in the name of Mr. Suharto.

TIME: This is from Pak Alatas?

GHALIB: Yes.

TIME: And did he say anything about whether there might be assets in someone else's name?

GHALIB: No, no, no, except for the family. Family, he said, but I don't know. We are looking for Mr. Suharto's [money] abroad.

TIME: For example, Switzerland has said publicly that they're willing to freeze any bank accounts, they're willing to help but they have to have a request from Indonesia and still there's no request?

SUJATA: According to Indonesian law, in the preliminary investigation we cannot freeze the assets.

TIME: Has the Ministry of Foreign Affairs approached foreign governments?

GHALIB: About Mr. Suharto? No. Only about the family.

TIME: People say, "Ghalib is a military man, a three-star general"

GHALIB: Suharto is five-star. [Laughs]

TIME: Are you covering up for him?

GHALIB: No, no, no. This depends on the law, on what is right. We have investigated him twice. If we have proof, yes. O.K., we are very, very serious, but this must proceed through the law.

TIME: What about the case involving Tommy?

GHALIB: Tommy was already sent to the court, you know. He is the son of his father. If you ask a father to choose, himself or his son, better the father. But we sent him to the court.

TIME: They're very close.

GHALIB: Yes, very, very close. So, if we prove that this is our law, he must be there. Now with Mr. Suharto we are looking for more proof, whether it's there or not. If not full enough, it's a problem. We have to make it secure that we have already found this, to increase the status from a preliminary to an investigation.

TIME: We understand that the former First Family has indicated that it might like to pay the money on the Mobnas project, the outstanding money. If they do that, won't that finish off the prosecution case?

GHALIB: In this case, there are at least two opinions. One is that even already paid but still can be, but the other said you can't because paid already. But it depends on the jury. But so far we use that: even if paid already, he still can be charged because not before, but after this, that's our law now. I told him already ... even if you've paid, still process.

TIME: So in the case of Tommy, that won't necessarily mean that the charges are dropped.

GHALIB: It's still, still going on. It depends on the court.

TIME: Even if there's no loss to the state.

GHALIB: Yes, because we are in the process now.

TIME: The seven yayasan. Last year, I think it was December, it was reported that these had been given by Suharto to the government or the state. Did he hand the assets over, or just the operations?

SOEHANDJONO: The operation is run by the government. The assets belong the foundations. The money doesn't belong to Suharto. The money always belongs to the foundations.

TIME: Suharto is the chairman of these foundations. So if the money is still in the foundations, then it's still controlled by Suharto, right?

GHALIB: No, no, no, no. It's controlled by the Coordinating Minister for the Eradication of Poverty. There's a decree on that... It was placed with the Coordinating Minister Pak Haryono Suyono.

TIME: Why haven't the assets been handed over with the control of the yayasan?

SOEHANDJONO: Because their purpose is social activity. So they continue the social activities, but are run by the government.

TIME: But the money, the fund, is still under the foundation? And Suharto is still the chairman of the foundation? But if someone wants to spend foundation money, they still have to come to Suharto to sign the check?

GHALIB: No, it's Pak Haryono Suyono. I think Pak Haryono is already running the foundation.

TIME: But we also heard, actually from someone in your own office, that still, before they spend the money, they still have to get the signature of the former President.

GHALIB: I don't know exactly, but according to Mr. Haryono, he's already running it. Because I asked him whether you already run, yes, everything's O.K. Nobody can use the money without permission from this minister.

TIME: Regarding the yayasan, you say that you have found that some of the money has been misused, but you cannot press charges because it has to be state money. If you know that the yayasan's money is coming from profits of state banks, or from the salaries of civil servants, that's state money being misused. How much evidence do you need before you will charge Suharto?

GHALIB: We only need two, at least two. Number one is that we already prove the money is state money, lost there and come to somebody there, whether it is personal, for his family or for someone else. That's number one. The second one is whether it's against the law.

TIME: So, is it not against the law to take money from civil servants, state companies, state banks, and lend it to friends and their children for their businesses?

GHALIB: No, no, no. Because, if we can prove that money is direct from the state, the state loses the money, and it is against the law. I can give you one example. Here in Indonesia, the scholarship uses the state's money for going abroad. But when you come back from abroad and the money isn't used according to plan, this can be corruption. The money is lost already, but it's not against the law. So we can't say.

TIME: So you have to have both elements?

GHALIB: Must be both.

TIME: Are you getting close to laying formal charges against Suharto?

GHALIB: According to the TAP MPR [special parliamentary decree] we have to. Before the Sidang Umum [special house session], it must be finished, that's my target.

TIME: Which is December?

GHALIB: No, no, October, November.

TIME: Both Suharto and the children?

GHALIB: Just Suharto.

TIME: Are you also investigating the other children?

GHALIB: If we find the proof.

TIME: Are you looking for proof?

GHALIB: We are looking, and we are going to find out whether there is data or not. If you have data, for instance if you have Mr. Suharto's account in the United States or wherever, give me the number. Tomorrow I'll catch a flight there, because I already have the letter from Mr. Suharto. I'm very happy to get the account number.

TIME: But what if it's under someone else's name? Are you looking for that? Are you looking for assets held under another name?

GHALIB: Another name? Yes, of course, I would go there. He told us if you get the name--or the other name--as soon as you can prove it, come. We have already investigated from here. So, it depends on the proof.

TIME: Why aren't you investigating allegations of corruption in relation to the National Logistics Agency or the state oil company Pertamina?

GHALIB: Maybe the reason is, if we want to investigate all of them, because he was the President, so, of course, many of them are connected, including us.

TIME: What are some of the difficulties that you have encountered?

GHALIB: For instance, to find proof from the yayasan through these two legal and financial audits--it's not easy to find that. Where's the money transferred? We use time, maybe three to four months for the financial audit. For the Mobnas, it's also the same. We have to find out--the minister, we asked the ex-minister of finance, and so on--we have to ask him ... It's not easy. From there we have to find out again, we see the book [he uses his hands to show the enormous amount of documents], so we need a lot of time to find out, but not more than the Sidang Umum. We have to finish before then.

TIME: Then even if you haven't investigated Bulog, Pertamina, then you won't do it at all?

GHALIB: Yes, of course if we need them, we can find out. But so far, with these two cases I think we can do something if we want to increase to the others--Bulog and so on, and so on.

TIME: But what about the people who say that you are giving the former President a lot of time to move the money into the name of his lawyers or other proxies?

GHALIB: No, no, we haven't given a lot of time for it, so far it has been according to the law. We can't go against the law. Law enforcement against law--we can't do like that. It must be according to the law.

TIME: If it's true that there are billions of dollars in Austria, don't you think you're giving them a lot of time to move it to another country?

GHALIB: We have to find out. We can prove, you know. We can see that there is the moving of money, we can find out. We can, no problem.

TIME: You're not worried.

GHALIB: No, because of the bank. Here, for instance, we can find out about a corrupter, you know, he sent money everywhere. The proof starts here. We call it a financial audit. We can find it. So, we need time, you know. Not easy to get it because most of them are very, very clever to make loss to the state.

TIME: But don't you think it would make it easier if you froze the assets first, so you don't have a moving target?

GHALIB: No. My target is not more than the Sidang Umum. I have to finish it all. We are limited by the law because before someone is [proven] a corrupter, for instance, we can't accept his account in the bank. But if he's already been increased to the status of tersangka, accused, we can find it, we can stop it. That's our law here.

TIME: Then you can freeze?

GHALIB: Yes, then we can freeze that.

TIME: Which law says that you can't request the foreign government to ...

GHALIB: That's our Indonesian law. Decree No. 3, 1971.

TIME: That's here. But they can do it overseas. The Swiss are waiting to do it.

SOEHANDJONO: But the case is in Indonesian court, not in a foreign country's court. [Laughs] So it should be based on the procedures here.

GHALIB: I met already with the ambassador of Switzerland, because he came here. I asked him, "Sir, can you assist us with Mr. Suharto's account abroad?" And he said, "Yes, we can help you if Mr. Suharto is already in the status of tersangka [accused]. So, as soon as he is accused, they can open his account.

TIME: But at this stage you can't tell us whether you're planning to charge Suharto to make him a tersangka or not?

GHALIB: Of course, I told you already, it depends on the proof. We have plans to send to the court all the corruption findings. But it's based on the proof. That's our problem. For instance, Mr. Tommy Suharto: he's already been proven. We agree completely that we have proof to send him, so we send him. It's easier because we have found this. It's very easy to get the proof. But this case, it's not very easy--that's our problem.

TIME: On the financial auditing you mentioned before, the seven yayasan, you say they've got--your audit of Suharto's seven main social foundations disclosed that they have about 5.4 trillion rupiah. So, our question is, if we look at their sources of revenue since they began in 1978, like Dakab, Supersemar, Dharmais, it's 2.5% of the profits of state banks. In the case of Dharmais, it's a percentage of the salaries of civil servants. These foundations--three of them--had a share in Nusamba. Nusamba had a share in Freeport. How is it possible that over 20 years there's only five and a half trillion? Isn't the real figure much higher than that?

GHALIB: Your estimate is the same as mine. There may be more, but how could we find it? We are not experts. Maybe you have experts. Can you give me experts?

TIME: So, 5.4 trillion is your current estimate of what they have. What is your estimate of how much revenue they received over the past 21 years?

GHALIB: Ha, ha, ha ... that's very good, that's very good. Actually, I can understand your thinking, very good, actually. You must be an Attorney General, a very good one. Thank you very much, that's very good.

TIME: Soedjono had an estimate for how much they have received. You must have seen Sudjono's report.

GHALIB: He told you? Soedjono told you?

TIME: So after investigating the foundations for three months, you don't have an estimate of how much revenue they received over the past 21 years?

GHALIB: You know why? We tried to find out where this money comes from. Because it comes from the cuts of salary, from the banks, and so on. You can see every month. So, we can see, according to the books, where the money is come from. It's based on that, not on my calculations.

TIME: Well, according to the books, how much revenue have they received over the past 21 years?

GHALIB: I told you, 5.4 trillion rupiah.

TIME: That's the total? Do you believe that?

GHALIB: That's the financial audit. This depends on the final audit. Believe it or not, we can estimate because it's according to the financial audit.

SOEHANDJONO: And we didn't conduct the financial audit. It was done by others, the auditors. So, they made up the amount of the money, not us. We just received the amount from them, based on the investigation done by them.

TIME: But can I just ask you, do you believe that those books that have been audited for you, by BPKP, do you believe that the books are accurate?

SOEHANDJONO: We tried to find very old books. If you worked in that area for several months, you would have gotten a headache and your eyes would not be in a good condition because the books are very, very old, from '74, '75, '76, up to '98.

TIME: Have you obtained the former President's tax records?

GHALIB: Yes.

TIME: And the children, have you also gotten their tax records?

GHALIB: For the children, not yet, not yet.

TIME: Have you got the bank records for the children?

GHALIB: Banking records, no. For Mr. Suharto, yes.

SOEHANDJONO: We have asked about 90 banks in Indonesia and from some of the banks, we can find some of Mr. Suharto's money. But that has already been announced by the Attorney General.

TIME: When Mr. Suharto says he has $3 million and however many hectares, is that all accurate according to your investigation?

GHALIB: We examined 72 banks, and we found 23 million is Mr. Suharto's money, his private money.

TIME: That's the total? 23 million?

SOEHANDJONO: Billion.

GHALIB: Billion, yes.

SOEHANDJONO: It's almost 24, in about five banks. That's all the money that he has in the country.

TIME: What was Suharto's presidential salary?

GHALIB: I don't know exactly because I never asked.

SUJATA: I asked President Suharto where his money come from when he went abroad? He got pocket money, he brought and sent to the bank for more than 30 years.

SOEHANDJONO: He never used the money. It was always prepared for when he went somewhere--for food and lodging.

TIME: Do you accept that explanation, that he's got almost 24 billion rupiah? Where did it come from?

SOEHANDJONO: From pension.

TIME: How much is the pension?

SOEHANDJONO: I don't know. And also from the--he has one or two houses that he has contracted to other people, so it also comes from that.

TIME: You've been investigating Suharto since December on suspicion of corruption, but you don't know what his monthly salary was? Is this a serious investigation?

GHALIB: Very serious, you know, very serious, but this is just preliminary.

http://edition.cnn.com/ASIANOW/time/asia/magazine/1999/990524/loot1.html

Investigator

A man on a mission to track the loot

Man with a Mission: Find Suharto's Loot

By DAVID LIEBHOLD Newcastle

When Suharto presented an environmental award to George Junus Aditjondro in June 1987, the President added some perfunctory words of advice: "Continue with your work." Suharto might now regret that cursory counsel. Turning his attention from green issues to corruption, Aditjondro has made himself the world's leading authority on Suharto family wealth. After years of analyzing Indonesian press reports, he estimates the fortune to be at least $25 billion (larger than the amount TIME ascertained through its reporting). Nowadays any research on the subject begins with Aditjondro, whose articles and interviews are reproduced on hundreds of Internet sites. "He was the first guy to put together detailed information on the Suharto wealth and businesses," says Endy Bayuni, managing editor of the Jakarta Post. "He felt that somebody had to do it."

Aditjondro's interest in Suharto Inc. grew out of his work with conservation groups: he kept stumbling upon First Family companies. He says he discovered that behind almost every case of wanton environmental damage--from industrial pollution to destructive practices in mining, logging or tourism--lurked a Suharto firm. Rather than fight against myriad individual abuses, Aditjondro decided to attack the root of the problem. In 1994 he began collecting and cross-checking press clippings on the family businesses, painstakingly unraveling a complicated web of corporate interests. Though he fled to Australia in 1995 under police pressure, Aditjondro, 53, continues to investigate every Suharto-linked asset he can find. He insists it's not personal. "My fight is against the system, the oligarchy," he says. "It's larger than Suharto and more difficult to transform than simply removing him."

The son of a Javanese judge and a Dutch nurse, Aditjondro went to school in both Indonesia and the Netherlands. For most of the 1970s, he worked as a reporter for the newsweekly Tempo (banned by Suharto in 1994 and reopened last October). In the 1980s he got involved with non-governmental organizations, championing the rights of indigenous people--particularly in Irian Jaya, East Timor and Aceh--and working to build a network of conservationist groups across the archipelago.

Only months after he began researching the Suharto business empire, police started summoning Aditjondro for interrogations. With a lengthy jail term looming, he left Indonesia, giving up his teaching position at Satya Wacana University in Central Java and the home that he and his wife Esti had just finished renovating. He took a research fellowship at Perth's Murdoch University and later a five-year teaching contract at the University of Newcastle, on Australia's east coast, where he has developed a course on the sociology of corruption. Last year Aditjondro published From Suharto to Habibie: The Two Leading Corruptors of the New Order, which has sold 21,000 copies. He is now working on a book comparing the Suharto and Marcos oligarchies.

Both of Aditjondro's favorite topics--the Suharto wealth and the rights of ethnic minorities, issues that were taboo only a year ago--are now at the center of public debate in Indonesia. But he is saddened by the way his academic colleagues played it safe for so long, embracing reformasi only after Indonesian students pushed it into the mainstream. Aditjondro's identification with the underdog may be related to his ethnically mixed origins. "The Dutch kids called me 'nigger' and the Indonesian kids called me 'whitey,'" he says. "If you're a marginal person, either you become crushed by the majority, because you try to assimilate, or you use your marginality to understand all sides--the oppressed, the oppressor and the system itself."

http://edition.cnn.com/ASIANOW/time/asia/magazine/1999/990524/vickers1.html

Money Trail

A top sleuth lays out a battle plan

Secrets of a Professional Money-Tracker

By STEPHEN VICKERS

If Indonesia is really serious about going after the Suharto family's wealth, here's how to proceed. The first mistake investigators make in a case like this is to pore over accounts and ledgers at the expense of reality. The cardinal rule is never to believe in the integrity of any document until it has been independently verified. This is especially true when dealing with powerful, long-serving leaders who have had entire governments at their disposal to cover their tracks.

The first phase is to develop a strategy. We work with a small government team to establish the priorities and scope. Security has to be very tight. The quarry never stops moving assets or changing companies, domiciles and banks. In the second phase, investigators begin collecting and analyzing available information. A team of investigators and forensic accountants pores over tax and bank records and identifies corporations, trusts and nominee companies that can be pried apart. The goal is to find real, recoverable assets and to develop leverage over individuals and institutions involved in concealing them. The early seizure of cash and property can provide start-up or working capital to continue the hunt.

The third phase is to identify individuals--everyone from drivers to lawyers to business partners--who have been intimately involved with the target, his family and his cronies. Searching phone bills, faxes and computer records--nothing is ever really erased--can determine a core list of those people who might want to talk. Officials of other nations should be approached to help on a government-to-government basis to break local bank-secrecy provisions. In the case of Kroll's search for the wealth of Saddam Hussein, the big break came when we knocked on the door of his lawyer in Switzerland. That led to France, where Saddam held billions of dollars in shares in a media firm.

The last phase is to begin a series of liquidations, civil actions and leveraged discussions to pry open the secrets. There is a simple axiom: follow the money, and everything will come. Where crimes have been committed by accountants or lawyers acting on behalf of the target, then formal reports will be packaged and delivered to the proper authorities. Such packages will also be served on associations of accountants and lawyers. This makes other corrupt professionals more likely to cooperate.

In a case like that of the Suharto family, the search could last from one to two years. We'd recommend a team of five investigators, five case managers, 15 to 20 accountants, five lawyers and a global field team of 100 others to call on as needed. We would use intelligence analysts' software, an encryption cracking kit, a computer memory recovery kit and a forensic laboratory. However, the key asset will be the Indonesian people, at home and abroad. If they seek it, it can be found.

Stephen Vickers is executive managing director in Asia for Kroll Associates, which has traced the assets of Haiti's Jean-Claude Duvalier, the Philippines' Ferdinand Marcos and other autocrats

Rich Despots: Where Does Suharto Rank In History?

KLEPTOCRAT

Philippines' dictator Ferdinand Marcos, ousted in 1986, stole up to $10 billion

EMPEROR

Ethiopia's Haile Selassie, ousted in 1974, had stockpiled $2 billion

FAMILY MAN

Though the fortune has dwindled, Suharto & Co. still sit on $15 billion

INSATIABLE

Zaire's Mobutu Sese Seko piggy-banked $5 billion before his overthrow in 1997

BABY DOC

When he fell from power in 1986, Haiti's Jean-Claude Duvalier made off with $500 million

http://edition.cnn.com/ASIANOW/time/asia/magazine/1999/990524/winters1.html

Viewpoint      

Jeffrey Winters on stealing big

It Pays to Think Big

History favors dictators who take billions, not millions

By JEFFREY WINTERS

President Suharto opened his 1989 autobiography with memories of his simple childhood bathing in muddy canals in Java. "My roots are in the village," he wrote. From the start of his dictatorship in 1966, Suharto carefully cultivated an image not just of humble origins but of lifelong simplicity. He claimed to be a common farm boy with common values, who rose without ambition to a position of dominance over one of the largest countries in the world, and who ruled in the best interests of the nation.

Eager supporters at home and abroad swallowed that line whole. One American ambassador to Indonesia in the 1960s described Suharto as a man of "sincerity and humble courage." What better man to lead Indonesia out of the Third World? President Richard Nixon told Suharto upon landing in Jakarta in July 1969, "The People of the United States wish to share with you in this adventure in progress." In 1986, at the height of Suharto's military-backed rule, President Ronald Reagan spoke in Indonesia of the "winds of freedom" blowing through the region. Throughout his more than three decades of rapacious dictatorship, Suharto's public image served the important political function of deflecting criticism and seeding disbelief that he could be capable of all that his critics would later claim.

In the early years of Suharto's New Order government, his greedy wife Madam Tien took most of the heat. Then it was Ibnu Sutowo, head of the state oil company Pertamina, who nearly bankrupted Indonesia in the mid-1970s by borrowing billions of dollars that were used in part by Suharto for political and personal ends. When Suharto's children came of age in the 1980s and his grandchildren in the 1990s, they became the focus of resentment. All along, the dictator himself managed to maintain his Teflon coating. Even as evidence now mounts of Suharto's staggering personal wealth, he can still step up to a microphone and declare flatly, as he did last September, that he doesn't have a single cent in holdings abroad.

When leaders commit crimes, one lesson from history is that it helps to transgress on such a massive scale that few will believe the deed possible. The theft of mere hundreds of millions of dollars is entirely believable--that's what landed the powerful Salinas family of Mexico in deep trouble. A much better strategy is to steal billions, preferably tens of billions, just to be on the safe side. The sheer size and incomprehensibility of the corruption buys a degree of security from prosecution. For a leader like Suharto, the formula works even better if disbelief of scale blends seamlessly with a personal image of impeccable simplicity.

But the reason it has been so difficult even to mount an official investigation of Suharto goes much deeper than psychology. From the start, Suharto's New Order benefited from an international banking system that favors kleptocrats by offering no strong rules or norms that can act as a counterpoint to bank secrecy. The banks themselves, along with the money handlers who labor to make ill-gotten wealth so hard to track and recover, profit handsomely for their services and from the deposits they take in. When the fortunes of dictators get stored abroad in secret accounts for decades with the complicity of foreign banks and friendly governments, international actors grow deeply reluctant to have that history of collusion or indifference exposed. At a minimum, it makes finger wagging at declining dictators and their corrupt governments much harder because the clear line separating "them" from "us" breaks down.

The task of charging dictators with crimes, the crucial first step in going after their assets, is much easier if the ruler gets pushed not only out of office but also out of the country. Unlike the Shah of Iran, Duvalier in Haiti, Somoza of Nicaragua, Mobutu of Congo and Marcos in the Philippines, Suharto of Indonesia remains in a country where his influence is still formidable. This leads to truly absurd political maneuvering by officials to protect their fallen leader. Attorney General Andi Muhammad Ghalib, for instance, faces an almost daily barrage of foreign and domestic press reports of Suharto family wealth, all of which he has refused to investigate aggressively. Instead he talks about how unreliable press reports can be and suggests repeatedly that it is the accusers' responsibility to come forward with the whole corruption case solved and ready for court action. This would be high comedy if the political and economic stakes for Indonesians were not so high.

If the Marcos case is any guide, Indonesians should brace themselves for some big disappointments. The Filipinos were quick off the blocks: they exiled Marcos immediately and froze assets around the globe. Yet after nearly 14 years and many millions in legal and forensic accounting fees, they have recovered only a small portion of Marcos' fortune. The Indonesians started slowly, have neither charged the Suhartos with anything nor attempted to locate or freeze foreign assets. Instead, the Habibie government stalled long enough to allow the Suhartos to hide and protect the assets abroad--so even if action is finally taken, Indonesians will get back almost nothing.

Jeffrey Winters, professor of political economy at Northwestern University in the U.S., is the author of Power in Motion: Capital Mobility and the Indonesian State

http://edition.cnn.com/ASIANOW/time/asia/magazine/1999/990524/lawyer1.html

"Not One Cent Abroad"

Suharto's lawyers respond

The Lawyer: "Not One Cent Abroad"

Holed up in the family compound in Jakarta, Suharto declined repeated requests for an interview about his holdings. But Hong Kong bureau chief John Colmey met separately with two of the former President's lawyers, Otto Cornelis Kaligis, head of Suharto's eight-member legal team, and Juan Felix Tampubolon. Excerpts from the interviews:

TIME: There is evidence that $9 billion was transferred from Switzerland to Austria under President Suharto's name.

Kaligis: When I asked President Suharto about this, he told me: "I don't have one cent abroad." And he gave absolute power of attorney to the Attorney General to investigate. If he finds any evidence, Mr. Suharto is ready to be brought to court. Therefore, I do not believe it is true.

TIME: Has Suharto accumulated billions of dollars in hidden wealth?

Tampubolon: There is no legally admissible evidence to say he has accumulated billions. The AG's office has identified his bank accounts: the amount is $2.4 million. Seven foundations chaired by him received funds amounting to $547 million. These foundations, as well as their assets, have been transferred to the government.

TIME: It is seems unlikely those foundations could collect only $547 million over 19 years, given their revenues. In 1990, for example, they had a controlling share in Bank Duta, with assets of $1 billion.

Kaligis: I don't have every detail about them, but the money of the foundations was used to build mosques and churches, to fund student scholarships, and for social activities.

TIME: The AG's office says more than half the money was lent to Suharto's children and friends, who rarely repaid any of it.

Kaligis: In my experience accompanying the President to the examination by the AG, all the evidence was delivered to him. So far his investigations of Mr. Suharto have never touched the children.

TIME: Should Suharto be held responsible for any crimes of the children?

Kaligis: The law says no.

TIME: Do you think Suharto was aware of the greed of his children?

Kaligis: He concentrated on the government. The children as citizens have the right to carry on business, and it has nothing to do with policies of President Suharto.

TIME: Will Suharto ever stand trial?

Tampubolon: In my opinion he will never have to. For every crime he committed, if any, before 1981, the right to prosecute has expired under the statutory period limitation. For any crime committed within 1981-1998, if any, the right to prosecute has been abolished by the decrees of the People's Consultative Assembly, which accepted Mr. Suharto's reports on how he carried out the assembly's mandate.

TIME: Isn't it ironic that many Suharto critics were once his biggest supporters?

Tampubolon: Of course it is ironic that many who used to support Mr. Suharto now consider him as the only culprit of every error committed in the past. Doesn't that mean that they're criticizing themselves?

TIME: Does Suharto continue to influence the military?

Kaligis: When I asked if he is still involved with political life, he said there are "no activities at all." What he is doing now is praying and facing his old age. He knows he is going to die, and as a Muslim he prepares himself for that.

http://edition.cnn.com/ASIANOW/time/asia/magazine/1999/990524/viewpoint1.html

Flawed Legacy

Author Pramoedya Ananta Toer says that Suharto's sins run much deeper than greed

Dictator from Day One

Suharto abused his power from the start, says Indonesia's foremost writer

By PRAMOEDYA ANANTA TOER

As the Dutch writer Multatuli has stressed, it is the obligation of every human being to become human. Whoever murders his own kind, therefore, violates the basic principle of his existence. And murder, where there is no legal basis, is a crime against humanity. Simple logic, but it isn't simple in practice. The events in Indonesia of 1965-66 were a test of this basic definition of humanity. Compared with the mass slaughter of those years, all the lies, corruption and nepotism of Suharto's regime are a small, trivial matter.

In early 1966, General Suharto assumed control of the military and the country, months after a faction of the army kidnapped and killed six generals on Sept. 30 the previous year. Indonesian history books and newspapers still refer to this incident as an "attempted communist coup," but there is no evidence that the Communist Party of Indonesia, as an organization, was involved in the kidnapping. The communists had 3 million members and supporters at that time. If they wanted to launch a coup, why didn't they just mobilize their branches in cities and towns outside Jakarta? Why was the party leadership caught completely off guard by the kidnapping? The coup was Suharto's.

For the next 13 days I watched the army hunt, murder and loot until, finally, I myself became one of the victims. People known or suspected to be communists or sympathizers were slaughtered wherever they were found--on the steps of their houses, on the side of the road, while squatting in the lavatory. The Indonesian élites had lost the ability to resolve their differences peacefully, in the political sphere, and the last word belonged to the group that possessed firearms: the army.

During the first days of October, Armed Forces chief General Nasution made commando-like speeches on the radio, urging the public to "destroy the Communist Party root and branch." After these pronouncements, the murder, looting and burning of the army intensified to the point of insanity. It was Nasution who baptized the military regime with the name "New Order," which is used to this day.

On Oct. 13, 1965, it was my turn to be targeted by a pack of armed, masked men. There were no official, written charges. And what happened to me was also experienced by 1.5 million others. Half a million people were killed, according to the Western press, and some military officials say the number is even higher. Suharto needed the slaughter to instill fear in everyone. He tried to legitimize his rule by claiming Sukarno had conferred power on him in a letter dated March 11, 1966--a letter that has never been produced to the public and which is now said to have been "lost."

Suharto's next step, in 1971, was to stage a general election in accordance with his taste and needs. Two years later he required all political currents to merge into just three parties, yielding a "constitutional state" complete with the recognition and support of Western countries.

With the founding of the New Order, the trampling on humanity continued. The killing has never stopped, right up to Suharto's fall and beyond. A prison official once told us: "The only right you still possess is the right to breathe." That was an exaggeration. In reality, many political prisoners were killed, without judicial process, either directly or through inadequate food rations. Outside the concentration camps and the jails, the families of political prisoners were persecuted, humiliated and intimidated by the New Order bureaucracy.

The intellectuals ran for cover beneath Suharto's feet. No one, apart from a few exiles, dared to challenge the New Order, which created new lies to bolster the old ones, so that the untruths were doubled. Every state institution faithfully carried out its main task: to vindicate and support Suharto. Not once did the parliament so much as discuss the fate of the millions who were killed or deprived of their rights.

When I was arrested in October 1965, my study was ransacked and all of my papers destroyed, including unpublished manuscripts. Again, when I left Buru Island concentration camp in 1979, all my papers were taken from me. (Among them was a letter from Suharto, in which he advised me to pray to God for guidance in "returning" to the path of righteousness.) The judiciary never made a sound about the violations of my rights. Everyone agreed with Suharto, every institution was a tool in his hands.

Suharto, whose rule was blighted by the deaths of hundreds of thousands--perhaps millions--is a criminal against humanity. Everyone on the face of the earth has the right to bring him to court for his crimes because, as Sukarno was fond of saying, "humanity is one."

I extend my highest respect and appreciation to the students and other people who succeeded in toppling the dictator last spring. They did so without resort to kidnapping, killing, physical abuse, slander or intimidation. It is only their consistent action, to reform the life of the state and the nation, that can rid us of the New Order's criminal brutality and bring Indonesia to a new life.

Pramoedya Ananta Toer, Indonesia's best-known author, released The Mute's Soliloquy: A Memoir this year

http://edition.cnn.com/ASIANOW/time/asia/magazine/1999/990524/publetter.html

END PAGES

MAY 24, 1999 VOL. 153 NO. 20

To Our Readers

By DON MORRISON Editor, TIME Asia

For much of the past four months, a team of TIME journalists has been poring over documents, crunching numbers and doggedly pursuing bankers, diplomats, academics and former and current Indonesian officials. The goal of it all: to trace the wealth Suharto and his family amassed during the former President's 32 years in power--the subject of this week's special report. For years, Indonesians have been reluctant to discuss the reach of Suharto Inc., so firm was the President's grip on the country. His overthrow a year ago this week has inspired calls for an official accounting. Yet several of TIME's sources still expressed concern about their safety. "I don't want to die. I have a family. Have pity on me!" said a consultant, pleading with correspondent David Liebhold not to use his name (we obliged). "I waited for him to smile," says Liebhold, "but he didn't."

Such concerns prompted TIME's team, led by Hong Kong bureau chief John Colmey, to take precautions. A radio in the Jakarta hotel suite that often served as the team's headquarters was turned up louder whenever sensitive matters were discussed. Notes were locked away in the hotel safe overnight. Important sources were referred to by code name. Thus, a well-connected businesswoman became "Mother Teresa." And a breakthrough came when "the Dalai Lama," code for an official in the Attorney General's office, finally decided to cooperate. "But if you use my name, I'll kill you," he warned. Recalls Liebhold: "I waited for him to smile, but he didn't."

Nor was the going much easier outside Indonesia. Instead of fearful witnesses, our sleuths encountered layers of nominee companies, bank-secrecy laws and reluctant sources. "For me, the assignment meant a long series of confrontations with stony-faced guards at luxury compounds and short interviews with testy property managers," says reporter Laird Harrison in Los Angeles. Nonetheless, he managed to locate two dozen swank Los Angeles addresses tied to Suharto. With similar persistence, London's Kate Noble found that Suharto son Tommy partly owns an 18-hole golf course at Ascot.

The investigation convinced our journalists that it may take years to erase the legacy of corruption and fear that marked the Suharto era. But they found Indonesians to be growing bolder by the day. After weeks of fruitless search for a closely guarded statistic, Suharto's official salary, reporters Jason Tedjasukmana and Zamira Loebis finally found an official who supplied it gladly: $1,764 a month. Explained the bureaucrat: "It's reformasi time."