It's All In The Family

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    In 1966 Suharto Inc. began to take shape. Before being officially named President, Suharto issued Decree No. 8, allowing him to seize two conglomerates with combined assets of $2 billion. They were recast as PT Pilot Project Berdikari, one of the companies that became a main lever of the family empire. But 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. However, the foundations were also giant slush funds for investment projects of the Suhartos and their cronies as well as for the ex-President's political machine. The foundations accepted "donations," which were often less than voluntary. Beginning in 1978, all state-owned banks were required to give 2.5% of their profits to two foundations, according to former Attorney General Soedjono Atmonegoro. Suharto's Decree No. 92, in 1996, required each taxpayer and company making more than $40,000 a year to donate 2% of income to another foundation, set up to support poverty-alleviation programs. The foundations invested heavily in private companies established by family members and cronies.

    Soon after Suharto's resignation, then-Attorney General Soedjono examined the books of the four largest yayasan. "Suharto had distributed the money to his children and friends," he says. Soedjono discovered that one of the largest foundations had disbursed 84% of its funds on unauthorized pursuits, including loans to companies owned by Suharto's children and friends. Suharto, as chairman, had had to sign any check over $50,000. Soedjono submitted a preliminary report on his findings to President Habibie last June and was fired five hours later. (Habibie says Soedjono was dismissed because he stepped outside the line of command on another matter.)

    Few areas were more lucrative than the family's oil businesses. Pertamina imported and exported much of its oil through 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 average commissions of 30[cents] to 35[cents] per bbl., totaling more than $50 million in fiscal year 1997-98.

    "The children," as the Suharto offspring are known, were key participants in the family treasure hunt. 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." Two sources who worked on Jakarta's Soekarno-Hatta International Airport project say that by the time its two terminals were finished in 1984, $78.2 million had been handed to Sigit in markups that appeared as cost overruns. Second son Bambang was given a slice of the lucrative business of importing and distributing basic commodities, such as wheat, sugar, soybeans and rice. Through sugar trading alone, he is estimated to have earned as much as $70 million a year, essentially for stamping documents. Eldest child Tutut became the queen bee of the clan. At the peak of her power, according to sources close to the family, investors seeking to meet her first had to pay a "consulting fee" of up to $50,000 to her minions.

    Neither Suharto nor his children responded to requests for interviews, though lawyers for the former President and son Bambang asserted that their clients did nothing illegal. "He told me, 'I don't have one cent abroad,'" says Otto Cornelis Kaligis, Suharto's top lawyer, of his client.

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