----- Original Message -----
To: Karolyn Martin
Sent: Sunday, November 19, 2000 9:05 AM
Subject: The Corruption of Warren Christopher
http://www.newsmax.com/archives/articles/2000/11/13/215303.shtml
The
Corruption of Warren Christopher
By Charles. R. Smith
Vice
President Al Gore's selection of former Secretary of State
Warren Christopher
as his legal point man in Florida is
considered a safe bet. However,
success has not always favored
Warren Christopher. Gore's top legal
advisor recently
participated in a failed cover-up of documented
"corruption,
collusion and nepotism."
Warren Christopher personally
urged the Indonesian government to
cover-up documented corruption inside a
$2.6 billion dollar
power plant contract. Christopher did so as a
"member of the
board" of the U.S. corporation involved, and thus had a
direct
financial interest in the illegal contract.
In fact, Warren
Christopher was there in the beginning. In
1994, President Clinton
traveled to the lush Asia/Pacific
Economic Conference 1994 in Jakarta,
Indonesia. His then
Secretary of State Warren Christopher accompanied
Clinton.
In Jakarta, Clinton signed a trade agreement to supply
Indonesia
a $2.6 billion coal fired electric power plant using
U.S.
taxpayer loans. The new contract for the Paiton electric
power
plant in east Java was also worth billions to U.S. corporations
such
as Edison 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 President Clinton during the 1994 Jakarta
signing with
Warren Christopher at his side.
However, behind the roots
of a Clinton's "open society" lurked
the dark corruption of a closed and
secret world involving the
CIA. Convicted DNC fundraiser John Huang met
37 times with the
CIA for secret briefings. One such meeting was on
secret bribes
for Indonesian President Suharto. Documents obtained
using the
Freedom of Information act show that the Paiton power
plant
started with a $50 million dollar bribe paid to relatives of
the
Indonesian dictator.
According to the documents, CIA agents Bob
Beamer, Chris Crosby,
Lia Fidas and Nancy Goldcamp attended an August 1994
"TPCC" or
"Trade Policy Coordinating Committee" meeting with John
Huang.
The subject of the CIA meeting was U.S. government financed
trade
deals that contained "first family involvement" or illegal
payments made to
relatives of then Indonesian dictator Suharto.
"ADB (Asian Development
Bank) had raised concern about first
family involvement during its
consideration of the $50 million
financial portion," states the Paiton
Project document found in
Huang's files.
Another November report 1994
Commerce Department advocacy found
in Huang's office shows that the Paiton
project encountered
difficulties with financing because the Asian Development
Bank
knew it also contained a Suharto family kickback.
Suharto's
son-in-law, according to the U.S. government advocacy
document,
was known to be a shareholder in the power
plant.
"Ambassador Barry stated that the project is facing
two
problems," noted Commerce officials on the Paiton project
status
document.
"(i) the ADB financing may cave in and (ii) EXIM
financing.
Regarding ADB, technical questions have been satisfied, but
ADB
is skiddish about involvement of Indonesia's first family (a
minority
shareholder is married to Pres. Suharto's daughter)."
In addition, 1994
documents provided by the Offshore Private
Investment Corporation (OPIC)
noted that Suharto's daughter
Prabowo and her brother-in-law, Hashim
Djojohadikusumo, were
given a total "2.5%" ownership in the U.S. sponsored
power
project.
"ADB is still considering this, b/c of very minimal
involvement
of Indo ruling family in the Mission project... ADB's
delay
revolves around concern for projects in Indonesia involving
the
first family. .75% ownership of the Mission project by
daughter
of Indo pres."
After the August 1994 CIA meeting on
Indonesian corruption,
Huang immediately left the Commerce Department and
went to an
office owned by Arkansas billionaire Jackson Stephens.
There
Huang made a very long phone call to his former Indonesian
employer,
the Lippo Group.
The Lippo group is a consortium, part owned by
billionaire
Moctar Riady, the former employer of John Huang. PT Lippo
is a
partner of U.S. based First Union Bank, a major investor in
the
Paiton project. The leader of the U.S. project in the
Paiton
power plant, Mission Energy, is also a partner of Indonesia's
Lippo
group.
PT Lippo also provided financing to "bother-in-law" Hashim
for
his coal mining company that supplied a "no-bid" contract to
the
Paiton power plant. While serving as the minister for
mines
under Suharto, Hashim managed to purchase the world's only
"low
sulfur" coal mine. His financial backers include Moctar
Riady's
PT Lippo and, his sister-in-law, Prabowo.
In 1996, the corrupt
Suharto regime obtained a global monopoly
thanks to Bill Clinton's executive
order for the 1.7
million-acre Grand Staircase-Escalante National Monument
in
Utah, over the only other known "low sulfur" deposit.
Yet, all bad
things must come to an end. By August 1998 Suharto
was gone. The
Indonesian economic meltdown caused Mission
Energy to panic and seek aid from
the Clinton administration.
In 1998, Commerce officials prepared a report for
Secretary
William Daley on a meeting with Mission Energy CEO
Edward
Muller. Daley is currently Gore's top campaign
advisor.
"Warren Christopher is on Edison Mission's board of
directors,"
states the Commerce report to Daley.
"Mr. Muller will
raise his concerns about developments in Asia
in general and about the Paiton
project in particular. He will
probably attempt to enlist your support
for the Paiton project.
Given competing interest by other U.S. firms, we
cannot commit
to this particular project."
"Ex-Im (Export Import Bank)
is the guarantor for $540 million in
the pre-completion phase. OPIC is
the senior lender (provides
guarantees for banks to lend) and insurance
provider for the
post-completion phase ($200 million). (Mission did not
take out
political risk insurance from OPIC or Ex-Im.)," noted the
report
to Daley.
According to the Commerce Dept. 1998 report, the
corrupt Suharto
regime purchased 25 power projects similar in size to the
Paiton
project, while the poor nation could afford only one such
plant.
Thus, the U.S. power companies were competing against each other
to
be the single survivor.
"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."
The
documents show that Mr. Christopher was aware of the
billions in illegal
payments made by corporations to Suharto and
several other dictators around
the world. Illegal payments
passed on to stockholders and customers of
the corporations such
as Edison Mission Energy in the form of losses and
higher
prices.
Moreover, the huge losses could cause a U.S. government
agency
to default in a fashion similar to the 1980s savings and
loan
scandal. According to a July 1998, State Dept. cable written
by
Ambassador Roy, the Overseas Private Investment Corporation
(OPIC) was
risking default because the Indonesian power company
"PLN" could not afford
the staggering losses.
"OPIC was concerned that PLN payment problems and
inaction on
suspended IPP (independent power producers) 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."
Another October 1998 State Dept. cable from the U.S.
Ambassador
to Indonesia J. Stapleton Roy noted that Indonesian
Director
General of Electricity Endro Utomo Notodisoerjo openly talked
of
rampant "corruption, collusion and nepotism (KKN)" involving
U.S. power
companies making illegal payments to Suharto cronies.
"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," noted Ambassador
Roy.
By late 1998, it became apparent that Indonesia was not going
to
pay off billions in unneeded and illegal power contracts.
According to
State Department documents, Warren Christopher
again traveled to Jakarta,
this time as a member of the Edison
Mission Energy board. Christopher
pressed the new Indonesian
government to re-negotiate the illegal Paiton
contract and not
default on any loans.
"Mr. Christopher, representing
Edison International's board, was
here to launch a proposal," noted the State
Department cable.
"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."
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."
However, a
1999 Indonesian government audit revealed that the
Paiton power plant has
accumulated losses of over $280 million.
PLN, the Indonesian power company,
estimated that it had lost
over $18 billion in total to Suharto corruption
inside the 25
U.S. sponsored power plant contracts.
At the same time,
lawyers representing PLN obtained copies of
the documents obtained from the
Clinton administration.
Indonesian officials used U.S. government documents
to file a
lawsuit, charging that the Paiton power plant contract
was
"corrupt from the beginning."
Despite the overwhelming evidence of
criminal activity,
according to Paiton's president Ronald Landry, the
U.S.
controlled power company preferred to resolve the issue
through
international negotiation. Edison lawyers argued that
the
purchase agreements signed by both parties in 1994 required
all
disputes be resolved through international arbitration
in
Stockholm.
"Unfortunately, it has become clear to us by PLN's
pursuit of
this undeserving suit that PLN is not sincerely interested
in
negotiation," said Landry in a December 1999 press
announcement.
Indonesian legal counsel, Adnan Buyung Nasution, argued to
the
court that the contract was void ab initio or "void from
the
beginning."
Buyung said that despite the stipulation that all
disputes would
be resolved through an arbitration court, the contract
contained
the requirement that the Paiton project was subject
to
Indonesian laws.
Buyung stated that the contracts were invalid and
based on the
documented "corrupt, collusive and nepotistic
practices
associated with the administration of former president
Suharto."
The Indonesian court turned down the Edison proposition that
the
court did not have the right to examine the case, and
that
international arbitration should settle the matter. In
December
1999, the Indonesian courts ruled that the entire $2.6
billion
dollar Paiton power plant contract was illegal.
Indonesian law
enforcement officials have quietly confirmed an
international investigation
is under way. Paiton was simply the
tip of the iceberg. The
documents found in Huang's office cover
far more "first family" involvement
with the Indonesian Suharto
regime. One document details a $35 billion
dollar gas and oil
deal with Exxon. Another points to corruption inside
the state
owned Indonesian satellite company. All of the
documents
contain detailed allegations of illegal payments.
Not all of
the information is coming from the files of John
Huang. A declassified
November 1998 State Dept. cable dedicated
an entire section on "DEALING WITH
UNWANTED PARTNERS." According
to the State Dept. cable, U.S. electric power
manufacturer El
Paso International entered into the Sengkang power project
with
Suharto's second daughter "Tutut".
"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 well-known 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."
Another State Department cable also illustrated
the
international nature of the widening corruption scandal.
"Java
Power Company has obtained a USD 1.7 billion financing
package for its 2 X
610 coal fired Paiton Swasta II power
plant," states the 1996
cable.
"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."
----- Original Message -----
Sent: Saturday, November 18, 2000 5:12
PM
Subject: Warren Christopher --Your
article in NewsMax
You sent me a great article on Warren Christopher
It was lost in the transfer of e-mail to my (now)
new computer.
Please send it to me again.
Thanks!
Karolyn Martin
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