http://www.worldnetdaily.com/bluesky_smith/19990907_xcsof_corruption.shtml
U.S. President Clinton and Indonesian President Suharto have
often been accused of being corrupt by their critics. Newly
declassified documents now show that both Presidents joined to
form an alliance of global corruption, collusion and nepotism.
According an October 1998 State Dept. cable from the U.S.
Ambassador to Indonesia, J. Stapleton Roy, Clinton
administration officials met with Indonesian Director General of
Electricity Endro Utomo Notodisoerjo:
"Commenting on corruption, collusion and nepotism (KKN), Endro
said that in the past there was no separation between 'power'
(not electric but former first family power) and business.
'All the IPP's have a relation with power, and it is still
going on,' added Endro."
On August 19, 1999, the U.S. State Department declassified 26
documents on corruption in American financed electric power
projects inside Indonesia. In addition, the State Dept. also
elected to withhold parts of 15 documents and three full
documents "in the interest of national security or foreign
relations." All of the withheld documents concern U.S. financed
electric power plant projects inside Indonesia.
Another declassified November 1998 State Dept. cable dedicates
an entire section on "DEALING WITH UNWANTED PARTNERS."
According to the State Dept., U.S. electric power manufacturer
El Paso International entered into the Sengkang power project
with Suharto's second daughter "Tutut". In an effort to deal
with the "unwanted" Suharto partner, El Paso tried to buy Tutut
out of the Sengkang project.
"Tutut holds two and one half percent in PT Triahsra Sarana,
which has a 5 percent share in PT Energi Sengkang. According
to Sengkang, Tutut does not intend to divest from the project
at this time."
The "Unwanted Partners" section also reveals yet-another
kickback, this time for a Suharto "crony" instead of a relative.
"Unocal executives told resources officer that the firm is
close to reaching a deal with its partner, PT Nusamba
(controlled by former President Soeharto crony Bob Hasan) to
sever ties in two production sharing contracts (PSC) in east
Kalmantan and East Java."
Each of the 26 documents has some sort of allegation of corrupt
activities between U.S. power manufacturers and the Suharto
government. In fact, the warnings of corruption came as early
as 1996. In April 1996, Ambassador Barry in Jakarta wrote:
"Java Power Company has obtained a USD 1.7 billion financing
package for its 2 X 610 coal fired Paiton Swasta II power
plant... Java Power Company is 50 percent owned by Siemens
Power, 35 percent Powergen PLC of the UK and 15 percent by PT
Bumiperitwi Tatapradipta. The latter is a subsidiary of the
Bimantara Group controlled by Bambang Trihatmodjo, President
Soeharto's second son."
However, a bribe for Suharto's second son was really nothing new
to the Clinton administration in 1996. Previously released
documents from the U.S. Commerce Dept. clearly show that the
crown jewel of Indonesian power, the Paiton Swasta I project, is
actually filled with Suharto corruption.
The partners in the Paiton I consortium include Edison Mission
Energy, Mitsui & Co., Ltd. of Japan, General Electric Capital
Corporation, and P.T. Batu Hitam Perkasa. PT Batu is owned by
Suharto's youngest daughter, Titek Prabowo and her
brother-in-law, Hashim Djojohadikusumo.
Federal Election Commission records show that Mission Energy CEO
John Bryson donated money to the Clinton/Gore campaign and
contributed money to Clinton's legal defense fund. 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. Moctar Riady is also accused of illegally
donated money to the Clinton/Gore political campaigns.
Paiton I was billed as the first "private" electric plant in
Indonesia. However, private ownership in Indonesia actually
means privately owned and operated by the Suharto "First
Family." The Indonesian company that owns, operates and fuels
the Paiton I plant under a 30 year, no-cut, contract is PT Batu
Hitam Perkasa.
Prawabo's brother-in-law, Hashim, also received an exclusive, no
bid, no-cut contract to supply coal for the power plant. The
State Dept. characterized the over-priced coal contract with
Hashim as "the Achilles Heel" of Paiton Swasta I.
According to the Commerce Dept., ".75%" of the Paiton project
was reserved for Suharto's daughter Prabowo. Prabowo's cut
amounted to an instant $15 million. Her kick-back, along with a
cut for "brother-in-law" Hashim and various other Suharto
relatives, was provided up front, in cash, in the form of a $50
million loan. The $50 million loan was to be paid back by the
profits (dividends) returned from the $2.6 billion Paiton
project.
The U.S. Commerce Dept. documents also state that "Warren
Christopher is on Edison Mission's board of directors." The
newly declassified State Dept. documents highlight that the
Paiton I electric project was of extreme importance to the
former member of the Clinton administration.
"Paiton Energy President Ronald Landry provided the IPP's
(independent power producers) with an overview of former
Secretary of State Warren Christopher's visit to Indonesia,"
states a U.S. embassy cable from 1998. "Mr. Christopher,
representing Edison International's board, was here to launch a
proposal."
According to Paiton CEO Landry, Christopher "spoke on behalf of
the IPP's" when he said that any solution reached with Indonesia
must:
"-- Be a 'Win-Win' solution and not 'embarrass' Indonesia;
-- Protect the USG, other government agencies and the
financial community;
-- Maintain debt coverage and the sanctity of the contract
-- Focus on financial rather than legal issues."
One U.S. agency that will need to be protected is the Overseas
Private Investment Corporation (OPIC). According to a July
1998, State Dept. cable written by Ambassador Roy:
"OPIC was concerned that PLN payment problems and inaction on
suspended IPP projects may result in expropriation claims
under OPIC political risk insurance polices... OPIC's
combined exposure in Indonesia is close to USD 1 billion, or
5 percent of OPIC's global exposure, all in the electric
power sector. As such, resolution of potential insurance
claims and/or actions could result in 'an adverse material
impact' on OPIC finances."
Obviously, if the Indonesian power sector fails then OPIC may
collapse with it. If OPIC failed then it would be audited,
along with the U.S. Export-Import Bank, the World Bank and
various other commercial investors. Thus, the intense fear
inside the Clinton/Gore White House is that the "corruption,
collusion and nepotism (KKN)" will be discovered and prosecuted.
In 1998, the Indonesian power company PLN lost almost a billion
dollars and this year doesn't look any better. PLN recently
announced it would pay the independent power producers, not in
dollars as originally contracted, but in the poorly valued
Indonesian Rupiah. The total amount of foreign investments sunk
into the Indonesian power sector is over $10 billion.
Moreover, the question of whether Indonesia can pay for Clinton
and Suharto corruption is an invalid one. According to the
State Dept., "The current selling price is U.S. 2 cents per kwh
and it needs to be increased to U.S. 9 cents per kwh just to
break even... (World Bank advisors now estimate that nothing
less than a 200 percent tariff increase is needed)."
In addition, there are serious issues to consider other than
corruption, collusion and nepotism or "KKN". The Dieng
Indonesian geothermal project, being constructed by CALENERGY,
is also a serious environmental problem.
In July 1998, Calenergy CEO Don O'Shei told State Dept.
officials that some wells at the "Dieng" geothermal power
project "are temporarily plugged" and "would have to be
permanently sealed to prevent environmental problems."
Indonesian geothermal power is based on super-heated steam from
volcanic activity underground much like "Old Faithful" in
Yellowstone National Park. The steam is tapped by drilling a
series of wells into the geyser.
However, that steam also contains high amounts of deadly
sulfuric acid which can pollute the air and water. At the Deing
power plant many of the wells needed to be plugged. The cable
also noted that Calenergy CEO O'Shei said, "this is a costly
procedure."
O'Shei also had a long statement on corruption. Curiously, the
State Dept. blacked out O'Shei's comments on "KKN" (corruption,
collusion and nepotism) involving "Calenergy's partner in
Dieng." Thus, Calenergy's information on "KKN" with their
"partner" was withheld for "national security" or "foreign
relations" reasons.
However, documents previously obtained from the U.S. Commerce
Dept. state "Sigit" Harjojudato, Suharto's oldest son, was
actually Calenergy's partner in the Dieng geothermal plant.
In a December 1998 article published in the Wall Street Journal,
Calenergy officials denied they knew that Suharto's son was
their partner. Yet, Mr. O'Shei's comments on "KKN" with their
"partner" in July 1998, prior to the blanket denial in December
1998, illustrates that at least the Calenergy CEO was aware of
Sigit's slice of Dieng.
The documents show that both Indonesia and America have been the
victims of a Clinton sponsored crime wave. The surreal comments
on one "crony" after another becoming "unwanted partners" while
doing dirty deals, were complied by two U.S. ambassadors to
Indonesia; former Ambassador Barry and Clinton appointee, J.
Stapleton Roy.
The State Dept. documents tell an offensive, scandalous and ugly
story of greed and corruption. They also tell the unvarnished
truth, an accurate self-portrait painted by the Clinton/Gore
administration.
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source documents -
http://www.softwar.net/kkn.html
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