19.1.08

Keeping it in the family

January 19, 2008


After a decade of concealing their enormous wealth, the Soeharto offspring suddenly have found themselves back in the limelight. Eric Ellis reports.

INDONESIANS find it hard to turn away from an enthralling sinetron, their much-loved TV soap operas. Be they dubbed into Bahasa from their original Venezuelan-accented Spanish or locally produced, a popular soapie gets everyone talking across this far-flung nation.

But few sinetrons have rated as well as the past fortnight's Jakarta hospital drama of power and money - let's charitably call it The Last Gasps Of A Despot - gripping households the 5000-kilometre length of the archipelago.

Indeed, the death throes of the 86-year-old former strongman Soeharto have been a potboiler, featuring a gilded cast of presidents, prime ministers, tycoons and aristocrats. Deposed and current, local and foreign, they have paraded in poignant cameos by the ailing dictator's bedside.

But few roles have been played as stoically as the return to the limelight of the saga's anchor cast, Soeharto's fabulously wealthy family. It has their critics talking all over again.

Never popular, his six children and myriad relatives and hangers-on publicly strutted through corporate Indonesia's boardrooms of the 1980 and '90s, becoming billionaire monopolists trading on daddy's 32-year rule. But apart from the occasional court appearance - and the much-abbreviated 15-year sentence of youngest son Hutomo (Tommy) for ordering the murder of a judge who had convicted him of corruption - they have kept a very low profile since Soeharto lost office, lest an official spotlight be again trained on just how much of their ill-founded loot they still possess.

But that is precisely what has happened during their bedside vigil of recent weeks. The more the cameras track the anxious family, the more Indonesians are reminded how they were allowed to run rampant through their economy and, many believe, still do. At least three of the six Soeharto children continue to enjoy the comfort of enormous assets and huge profits, prompting Indonesians to wonder what will happen to them when their father's protection has gone. The memories of their massive wealth are fresh. In Soeharto's Indonesia, there was barely a business the grasping children didn't have their fingers in; transport, mining, agriculture, property, telecoms, media, airlines, cars, hotels et al ad nauseam. Time, in its now near-notorious 1999 article that Soeharto last year won a still-uncollected $US106-million ($120-million) libel ruling over, tallied the children's wealth at $US5.4 billion. And that was a year after Indonesia's economy had collapsed from the Asian financial crisis. Bankers who had dealt with the family said that Time's calculations were conservative.

They endured Indonesia's fall fairly well. With its hard currency-based tourist economy, Bali functioned as the family's own ATM, while Indonesians elsewhere suffered through the crisis, when the rupiah lost 80 per cent of its value. They are still believed to own hotels on the island: the Four Seasons, Sheraton and the Westin, where the recent United Nations climate summit was staged (each of the hotel management chain denies any family connections). Through military links, they were reputed to have gained control of massive slabs of Kalimantan, which they plunder for timber and palm oil. Before Dili got independence in 2002, they reputedly owned a third of East Timor's landmass - and a large swag of the

the Indonesian western side, too, while stripping the timber and coffee from both. Save for some overlapping shareholdings in each other's companies, the one rare time they competed was in 1997, when they joined with foreign mining houses vying for the Busang gold deposit of Kalimantan. It turned out to be a hoax when the mine's bountiful gold samples were revealed to have been salted, but it displayed the grasping lengths they would go to get even richer.

Foreign companies - many of them Australian, and urged onto Indonesia by leaders such as Paul Keating - were not immune, willingly tying up with family members. Often there was little choice. If a business made money, chances are it would attract attention anyway.

At the height of his powers, it was almost impossible to spend rupiah and not make a Soeharto richer, be it in business or even mundane matters of state, such as getting a driver's licence (outsourced to daughter Tutut) an ID card (eldest son Sigit's wife) or paying alcohol tax, a good little earner for favourite grandson Ari.

Powerless and penurious, Indonesians quietly endured the graft with wry humour, anointing the eldest daughter and cabinet minister Siti Hardiyanti Hastuti with the nickname of "Tutut". It might have sounded like a high-pitched car horn, pace her ownership of the foreign-funded toll roads choked with vehicles from her brother's state-subsidised factories that coursed into booming Jakarta. But in artful Indonesian mouths, Tutut was also punned into an idiomatic acronym that neatly captured how the family accumulated its wealth - T-anpa U-saha T-api U-ntung T-erus - "without effort but always gaining riches". It became a euphemism for anyone amassing easy money. And then it all ended, ignominiously, in 1998.

At least, that's what the Soeharto family would like Indonesians to believe; that the party did end in 1998, and what few assets they had amassed disappeared in the collapsed economy that followed Soeharto's ouster.

It's a convenient story. Were it true, it would mean there was no need for the state to finally make good its oft-stated threat to go after their loot once their ailing father departs the mortal coil.

Except few in Indonesia believe it to be true. Money is power here and, though it's a decade on, a fair slice of the Soeharto empire remains in place, the children's wealth being tallied as high as $5 billion by some estimates. With tentacles spread throughout the military, their father's old political party, Golkar, and the tainted judiciary, they remain very influential in corporate - and political - Indonesia. Few analysts are prepared to speak openly about what they know.

But those who know the family say "look behind the curtains", where you will find people such as Hary Tanoesoedibjo, an ethnic Chinese businessman from Surabaya close to the second Soeharto son, Bambang Trihatmodjo, and Tito Sulistio, a former commissioner of Surabaya's stock exchange and a long-time associate of Titiek, the second daughter.

Educated in Canada, the 43-year-old Tanoesoedibjo was an unremarkable investment banker when he seemed to take control of the most prominent of the Soeharto family vehicles, the Bimantara Group, in 2002 from the debt-stricken Bambang. Tanoesoedibjo's wealth was estimated by Forbes magazine to be $US815 million last year, making him Indonesia's 16th richest person.

It's a meteoric rise for the one-time local associate of currency trader George Soros, an unpopular man in South-East Asia for his role in the currency meltdowns of the 1990s. Married with five children of his own, Tanoesoedibjo can't shake suspicions that he's Bambang's frontman in a flourishing empire led by some of Indonesia's most popular TV stations, banking, property, toll roads, telecoms and an airline. He insists he's self-made but Bambang remains a "commissioner" of the former Bimantara, now called Global Mediacom, which he founded in 1981. He claims to no longer have any management influence there, only admitting to a 13 per cent stake. The bulk of his former controlling stake, he has said, was lost in what amounted to get-out-of-jail-free deals he did with the state agency created to restructure the ruined economy after 1998.

The family-friendly Forbes last year calculated his wealth at $US200 million, Indonesia's 33rd richest person, basing that on the publicly declared Bimantara stake, whereas Time had him at $US3 billion in 1999. Bimantara, which made about $US150 million in profits in the nine months to September 30 last year, declined to meet or discuss its affairs. But a former member of the restructuring agency believes Bambang is as prominent there as ever, that he and Tanoesoedibjo came to an "understanding" over the company's control in 2002 and Bambang has turned the screws tighter since. "It's a mutually beneficial relationship," he says.

Another company that's reluctant to discuss its affairs is PT Humpuss, Tommy Soeharto's company. Regarded as the most extended of all the Soeharto vehicles, it was dramatically denuded after the crisis. But it, too, has re-emerged as a player in shipping, oil, mining and agribusiness. Tommy remains listed as its "main commissioner" - a job he did even while behind bars for murder (his secretary visited him weekly with company business) - with his nephew Ari his No.2, representing his father, Sigit's, residual 40 per cent.

Tutut, the minister of social affairs in the final Soeharto cabinet, lost most of her Indonesian tolls roads but has reportedly hung onto them in the Philippines. Less is known about the former stock exchange commissioner Tito Sulistio's relationship with Titiek, the wife of the former head of Indonesia's special forces, Kopassus, in the last days of the Soeharto era. With interests in banks, power generation and property, the Time investigation had her pegged at a pauperish - compared with her siblings - $US75 million in 1999, though other estimates calculated her wealth up to $US500 million. She and Sulistio teamed up to attempt a takeover of a bank in the late 1990s, and friends say they are still "close in business". She is believed to still be close to her elder brother's associate, Tanoesoedibjo, and was an investor in his holding company in the 1990s. Bankers in Jakarta tell anecdotes about unknown but wealthy Indonesians approaching them and keen for help to buy assets in their native country.

But it may not be how much the Soehartos still have that matters in whether they get to keep it, but if it is perceived that they do. Bambang's Global Mediacom is Indonesia's biggest media private company, pointed very much at the populist end of the market. Analysts say its media holdings are important in the management of the Soeharto legacy, helping dampen public cynicism toward the family and, duly, any political will to pursue them. Says one: "The media assets don't make much money but they have been very useful to the family, particularly this month."

Tanoesoedibjo's channels have lovingly broadcast Soeharto's epic struggle with his mortality. He is portrayed as the avuncular "Pak Harto", as he is affectionately known to loved ones, and sympathetically celebrated as Indonesia's "father of development". There's much discussion how his death will be a tragic loss for the nation, and the region, of his towering contribution. Praise from visiting well-wishers gush forth. There is no focus on the human rights abuses during his brutal 32-year rule or the $US35 billion the United Nations and World Bank claims he pillaged from Indonesians, which would make him the 20th century's paramount thief.

What comes next is important. While the patriarch is alive, the children are regarded as virtually untouchable. But his inevitable passing may see a new official push on their residual wealth.

Indonesia has never genuinely gone after the Soehartos but next year's elections may provide a spur. The President, Susilo Bambang Yudhoyono, was elected in 2004 on an anti-graft ticket, and is generally regarded as a cleanskin. As democracy and civil society matures, that's an advantage among Indonesian voters. In the absence of a significant party infrastructure, it may be the President's most potent political weapon in seeking re-election next year.

Because he is seen as bersih (clean), he remains the most popular of the dozen or so presumed presidential contenders. It may not hurt to ratchet up pressure on the children, despised by many Indonesians anyway. A taste of that seemed to come last week in the one of the more dramatic episodes of the Soeharto sinetron at Jakarta's Pertamina Hospital, where scores of doctors pore over his condition.

After paying his respects, Indonesia's Attorney-General, Hendarman Supandji, told the Soeharto relatives they shouldn't think dad's demise meant that their legal troubles over their father's graft would end. The billionaire kids seemed suddenly rattled, saying they would settle out of court and insisting it was their idea.

Their lawyers later backed away from the plan. The announcement that same day that Jakarta would continue to pursue the family's billions in the civil courts raised questions about who was making the call about keeping Soeharto alive. The family, as normal procedure in such matters would have it? Or is it the Government, for maximum leverage?

http://business.smh.com.au/keeping-it-in-the-family/20080118-1msl.html

Sphere: Related Content

No comments: