In 1999, International Monetary Fund authorities contracted with the accounting firm of Arthur Andersen to audit the Indonesian power company PLN. According to an article appearing in the Indonesian news-magazine D&R, the audit has discovered hundreds of millions of dollars missing or unaccounted for in U.S.- backed electric power projects. The news report, written by D&R investigative journalist Febrina Siahaan, contains an exclusive interview of Indonesian power officials who openly admit to corruption involving U.S. officials. The largest U.S.-sponsored power project in Indonesia is called Paiton. The coal burning electric plant was built by Edison Mission Energy and is located in East Java. Mission Energy, is also a partner of Indonesia's Lippo group, a consortium part owned by Indonesian billionaire Moctar Riady and the Chinese Army CITIC (China International Trust and Investment Corporation) bank. Paiton has accumulated losses over $280 million. PLN estimated that their electric company has lost over $18 billion in total. According to the former President/Director of PLN, Adhi Satriya, "It happened because there were so many people that 'used' Suharto's power when he was still in charge. The Paiton project by itself is the largest loss for PLN. Corruption occurred in all parts of the project." The Paiton power plant is expected to produce electricity at a cost of 8 cents per kilowatt hour (kwh). However, the Indonesians cannot even afford to pay the agreed price of 2 cents per kilowatt hour, a six cent loss to PLN for every watt generated. Yet, iron clad contracts note that the Paiton plant has to be paid for, whether it is running or not. "With this condition actually, PLN doesn't deserve to go on anymore," stated Adhi. On November 16, 1994, Bill Clinton, Secretary of State Warren Christopher and Ron Brown traveled to Jakarta, Indonesia, for the Asia Pacific Economic Conference (APEC). In Jakarta, Clinton signed deals to supply Indonesia with electric power using U.S. taxpayer loans. The deals were worth billions to U.S. corporations such as Cal Energy, Mission Energy and General Electric. "As markets expand, as information flows, the roots of an open society will grow and strengthen and contribute to stability," stated Clinton during the 1994 signing. Instead, Mr. Clinton has brought bankruptcy, and more poverty to the riot-stricken country. Their transition from the rule of Suharto has not been an easy one with billions missing. In September 1994, long before Clinton signed the power deal, the Commerce Dept. documented that Indonesian President Suharto had also cut his daughter in for a bribe. According to a 1994 Commerce Dept. document, ".75% ownership" of the $2 billion dollar Paiton project was given - at no cost - to dictator Suharto's second daughter, Siti Hediati Prabowo. Ms. Prabowo's ".75%" ownership totals to a free gift from the U.S. taxpayer of $15 million. The $15 million was part of a $50 million bribe split between Ms. Prabowo and another Suharto relative. The money was given in the form of a no pay back loan based on profits from the Paiton power plant. In return for the kick-back, the Indonesian President selected Mission Energy, a company owned by major Clinton donors, to build the Paiton power plant in east Java. Newly released documents provided by the Overseas Private Investment Corporation (OPIC) shows that Ms. Prabowo, and her brother-in-law, Hashim Djojohadikusumo, were given a total "2.5%" ownership in the Paiton power project, through their local company BHP. OPIC blacked out several of the documents as secret for personal and business privacy reasons. According to a May, 1999 letter written by Mission Energy Senior Vice President Robert E. Driscoll: "BHP holds a 15% interest in the project. To date, BHP has made capital contributions of approximately $50 million. To facilitate these contributions EME, Mitsui, and GE Capital extended loans to BHP to be repaid out of BHP's project dividends. The loans carry a market rate of interest and other commercial terms. Until the loans are repaid in full, BHP is permitted to receive only 35% of the dividends to which it is otherwise entitled." Of course, with a loss of six cents per kilowatt hour, Paiton will never turn a profit nor pay off on dividends. Thus, "35%" of nothing equals nothing. In addition, Prawabo's brother-in-law, Hashim, also received an exclusive, no bid - no cut, contract to supply coal for the power plant. According to the 1999 letter from Mission Energy, Hashim is "an Indonesian businessman of considerable reputation who was recommended to EME by, among others, the then U.S. Ambassador to Indonesia." The reason for such vocal support from the U.S. Ambassador may have also have an easy explanation. According to another document obtained from the U.S. Commerce Dept. "Warren Christopher is on Edison Mission's board of directors." The U.S. Commerce 1998 memo states quite clearly the Paiton project was of extreme importance to the Clinton administration. During the period of 1994 through 1996, Warren Christopher, Secretary of State, had a vested interest in seeing the Paiton project to completion. There are several parties interested in the success or failure of the Paiton project. The major investors in Paiton, according to D&R reporter Febrina Siahaan, recently traveled to Jakarta. The EXIM (Export-Import) banks of the United States, and Japan have combined with banks from Australia, Switzerland and communist China to press the Indonesian government not to default on power plant loans. In fact, several big banks stand to lose money, including BA Asia, Chase Manhattan, Fuji, Sakura, Barclary PLC, Credit Lyonnes, Industrial Bank of Japan and Union Bank of Switzerland. According to the Commerce Dept., there are also U.S. companies with contracts inside Indonesia who have an interest in the failure of the Paiton power plant: "Both Ex-Im and OPIC confirmed that if the 1200 MW Paiton project were to go on line, it would most likely wipe out any further GOI (Government of Indonesia) need for other power plants. Thus, several other major U.S. power developers with other projects, in varying stages of completion, are potential competitors with Edison for power purchase agreements." Corruption knows no party, and does not adhere to national boundaries nor ethnic origin. The electric power scandal covered the globe in Clinton led corruption. The Clinton administration's offer of free cash for kick-backs and donations are standard business practices, according to General Manager of Corporate relations for brother-in-law Hashim's coal company, Jannus Hutapea. "It's natural," stated Jannus. "This kind of practice occurs in every country in this world." ================================================================ source documents - http://www.softwar.net/paiton2.html Pcyphered SIGNATURE: CD7ACCACCA1DE8DC02FD95CEE8C663EDD85A68C4DE70251C562350A6BB7D5113 A8334FC38351904A623B79D62ADDABAFB9F99DD64F7D8519158045EE7DC8D4FF CDDEF95553E18BF3 ================================================================ SOFTWAR EMAIL NEWSLETTER www.softwar.net 08/24/99 *** to unsubscribe reply with "unsubscribe" as subject *** ================================================================
