May 24, 1999
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.
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
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
In an interview at the
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
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
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
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• Siti Hardiyanti Rukmana "Tutut"
• Bambang Trihatmodjo
• Hutomo Mandala Putra "Tommy"
• Sigit Harjoyudanto
• Siti Hutami Endang Adiningsih "Mamiek"
• Siti Hediati Hariyadi "Titiek"
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