It's All In The Family

  • When protesting students and street mobs finally drove Suharto, Indonesia's long-serving President, from office a year ago, he stood meekly to the side as his successor, B.J. Habibie, took the oath of office. Then Suharto slipped quietly from view. But the onetime autocrat has been far busier than most of his countrymen realize. In July 1998 the U.S. Treasury's attention was caught by reports that a large sum of money linked to Indonesia had been shifted from a bank in Switzerland to one in Austria. As part of a four-month investigation that covered 11 countries, TIME has concluded that $9 billion of Suharto money was transferred from Switzerland to a nominee bank account in Vienna. Not bad for a man whose presidential salary was $1,764 a month when he left office.

    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 sizable fortune. TIME correspondents found indications that at least $73 billion passed through the family's hands between 1966 and last year. 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. The treasure was accumulated over three decades from a skein of companies and monopolies dominating vast sectors of the country's economic activity--from oil exports to incoming Mecca pilgrims--and from the Suhartos' interests in some 13,900 sq. mi. of Indonesian property, an area the size of Belgium.

    When TIME published its 14-page report in Asia last week, it touched off shock waves. Suharto denies he has any bank deposits abroad and insists that his wealth amounts to just 46.9 acres of land, plus $2.4 million in savings, and he went on television on Friday to tell the nation he has done nothing wrong. His lawyers informed TIME that he intended to file suit for "false" charges that "defamed and humiliated" him. But an avid public savored details confirming suspicions of corruption and private profiteering that have swirled around the Suhartos for decades. On Friday, protesters demanding the former President be put on trial clashed with police. Attorney General Andi Muhammad Ghalib, who oversees an official inquiry into the family's wealth that has been creeping along inconclusively, told reporters, "I will set up a legal team to ask for confirmation from TIME." Amid dozens of newspaper, radio and TV reports, Indonesia's two leading magazines announced they are writing cover stories about the expose, which appeared just as Indonesia was preparing for the first post-Suharto elections in June.

    Indonesians clearly deserve to know if their former ruler used his political power to enrich his family. According to TIME's investigation, 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 and Nigeria. 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 in Australia, youngest son Hutomo Mandala Putra (nicknamed "Tommy") owns a 75% stake in an 18-hole golf course with 22 luxury apartments in 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, just up the street from his brother Sigit Harjoyudanto's $9 million home. Eldest daughter Siti Hardiyanti Rukmana ("Tutut") may have sold her Boeing 747-200 jumbo jet, but the family's fleet of planes included, at least until recently, four other jets.

    No one has proved that the Suhartos broke any laws amassing such possessions. Their companies consist mostly of operating entities that turn profits, create jobs and import Western technology. Nonetheless, the code of secrecy shielding the family's fortune is breaking down.

    There seems to be little doubt that the family grew wealthy at the expense of the nation. Suharto laid the foundation by establishing an intricate nationwide system of patronage that kept him in power for 32 years. His children, in turn, parlayed their ties to the presidency 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 state bankers. Subarjo Joyosumarto, managing director of Bank Indonesia, describes an environment that "made it difficult for the state banks to refuse [Suharto's offspring]." A former business associate of the children estimates that on commissions alone, they skipped tax payments of between $2.5 billion and $10 billion.

    During his long reign, Suharto led an outwardly modest life. Behind the facade, however, he showed an appetite for making money. In the 1950s, he was allegedly involved in sugar smuggling that may have cost him command of an army division during a 1959 anticorruption drive. Suharto asserts that he bartered sugar for rice to ease a local food shortage and did not benefit personally, but he was transferred to a less influential position at the army staff college.

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