“NOTES ON B.J. HABIBIE”
Organization Verio Gulfsouth
Date Mon, 25 May 1998 16:32:38 -0500
NOTES ON B.J. HABIBIE
By Jeffrey A. Winters
Associate Professor of Political Economy, Northwestern University
March 1, 1998 (Jakarta)
There is considerable public information available about Mr. Habibie and his activities in various ministerial posts. In this short note I would like to focus on Mr. Habibie’s less visible side. My first direct insights into B.J. Habibie came in a 1989 interview with Mr. Ibnu Sutowo, who headed the Indonesian state oil company, Pertamina, which he bankrupted with staggering debts of some $15 billion in the mid 1970s.
Until he was fired, Mr. Sutowo had operated as President Suharto’s main supplier of “untied” sources of money, which was indispensable for president’s political consolidation, especially during the early 1970s and particularly within the armed forces. He was Mr. Suharto’s main financier and, according to a reliable source in Jakarta, had signing privileges on the president’s Swiss bank accounts.
It was Ibnu Sutowo who was responsible for bringing B.J. Habibie back from Germany to be groomed not only as Suharto’s protege, but eventually as the person to replace Mr. Sutowo, particularly in his role as manager of the president’s foreign accounts. Habibie’s first official post as he was eased back into the Indonesian system after almost a decade and a half in Germany was “Advisor to the Director of Pertamina,” from 1974 to 1978. It was a baton pass that made Mr. Sutowo beam with pride more than a decade after it had occurred, and despite Mr. Sutowo’s own bitter fall from power and grace (not for bankrupting Pertamina, it should be noted, but for embarrassing President Suharto a half year later at the first ASEAN head of state meeting hosted by Indonesia in Bali in 1976). A Pattern of Nepotism and Corruption from the Start
In 1978 Mr. Habibie was appointed by President Suharto as chairman of BIDA, the Batam Industrial Development Authority. The idea was to turn Batam Island, near Singapore, into a major hub for industrial estates and export processing zones. Habibie immediately appointed his own brother-in-law, Ret. Major General Soedarsono Darmosoewito, as BIDA’s chief executive. Sri Rejeki, Soedarsono’s wife and Habibie’s younger sister, was made chairperson of two Batam “charities” — what in Indonesian are known as “yayasan,” organizations that are completely unregulated by Indonesian law and which are notorious as conduits for money laundering and corruption — Yayasan Keluarga Batam and Forum Komunikasi dan Konsultasi (FKKS) Batam. Although a state-funded development operation, Batam Island is managed by Mr. Habibie like a private fiefdom.
Some years later he handed his brother-in-law the post of Chairman of the local Chamber of Commerce (KADINDA). Mr. Soedarsono also heads several companies in the sprawling Habibie empire – including P.T. Bimatama Dharma Perkasa (a joint venture between Suyatim “Timmy” Habibie’s P.T. Timsco and Bambang Trihatmodjo’s P.T. Bimantara Citra), the Batam Island Country Club (which was later sold to P.T. Singa Jaya), P.T. Citra Lingkunan Lestari, (which does environmental impact studies for all industries who want to invest on Batam Island), and P.T. Indotri Mandiri Sakti (which was given exclusive rights to construct and manage Batam’s two major harbors). Timmy Habibie is the youngest of the eight Habibie siblings and runs Timsco from Jakarta.
Soedarsono was put in control of most of the Batam operations of the Timsco conglomerate, including the 500 hectare Batamindo Industrial Park and a 10,000 hectare integrated pig, crocodile, and poultry ranch, which is also combined with an orchid and vegetable plantation on Bulan Island, near Batam. The ranch, which supplies 15 percent of Singapore’s sizeable pork demand, is managed by P.T. Sinar Culindo Perkasa. The majority shareholder of this company is the Salim Group (headed by Suharto super-crony Liem Sioe Liong), with Timmy Habibie, Tommy Suharto, and Harry Murdani (older brother of retired commander of the armed forces Benny Murdani, architect of the genocidal invasion and subsequent occupation of East Timor) each owning minority shares.
The Batamindo Industrial Park is operated by P.T. Batamindo Investment Corporation, a joint venture between P.T. Herwindo Rintis and two Singapore-based companies that are also partly owned by the Salim Group. P.T. Herwindo Rintis, meanwhile, is owned by Habibie’s two sons, Ilham Habibie and Thareq Kemal Habibie, his brother Timmy, Suharto’s son Bambang, and the Salim Group.
B.J. Habibie’s direct control over the industrial island of Batam has allowed him to extend his nepotism to his older brother Satoto Habibie as well. Satoto’s company, P.T. Habindo Satria Perkasa, was granted a lucrative and exclusive license from BIDA (run by Habibie’s brother-in-law) to cleanse 65,000 tankers per year. Another Habibie company on Batam is P.T. Trimitra Upayatama, owned by Habibie’s sons and his youngest sister, Sri Rahayu Fatima (nicknamed “Yayuk”).
The two sons and the sister formed a joint venture with the Citramas Group to build a $100 million tourist resort on Batam in cooperation with three Singaporean companies (Keppel Group, Natsteel, and LKN Construction). In 1994, Habibie’s son Thareq set up the P.T. Repindo Panca Group in partnership with, among others, Abu Hartono, the then head of the military faction in the Indonesian parliament.
Batam Island’s business operations are tightly linked to business and trade from Singapore. And so to close the Batam-based circle of Habibie nepotism, he arranged the appointment of Fanny Habibie, his younger brother, as Indonesian Ambassador to Singapore. [Check on this – did this follow his position as Amb. to UK?]. [NOTE: Much of this material on the Batam operations is drawn directly Empire in Batam: From Real/Industrial Estates to the Largest Pig Farm in the Region,” circa 1995, no author cited. I have not, as yet, been able to determine the identity of the author, though that individual deserves the credit for assembling the Batam material. I have been able to cross-checked and verify the information presented above.]
Minister Habibie also assisted other family members in getting assigned important posts in government. For a time, his younger brother J.E. Habibie held the lucrative post of Director General of Maritime Transport (lucrative because licenses and contracts are issued from this office, making it a key site for payoffs, or what Indonesians call a “wet” point in the bureaucracy).
Habibie has handed top posts to his family members inside government companies and ministries he heads. In the mid 1990s, a major controversy erupted inside IPTN, the white elephant airplane state company Habibie runs, when his first son, Ilham, was he was given IV-C status immediately upon joining the company. This is the level equivalent to “Director General” in a government ministry. Based on his educational background and level of experience, he should have entered, at best, at the III-B level, and it would have taken ten to twenty years to rise to a IV-C level. Ilham was given the title “Director” at IPTN and he was also appointed to chair the N2130 jet plane project.
The other son, Thareq, has also made good use of his father’s position as head of BPPT (Badan Pengkajian dan Penerapan Teknologi), the government’s research and technology board, which plays a key role in examining and approving major government contracts and private business ventures. Thareq owns several companies, though his main operation is P.T. Repindo, an engineering contracting firm and an agent for several foreign companies, mostly German. According to officials I interviewed at BPPT working on the team overseeing the rich oil and gas deposits in the Natuna Sea (Mobil and Exxon are the main partners with Indonesia in the venture), notifications went out late in 1996 for bids by contractors and engineering firms for work on the Natuna project. By early 1997, all the tenders had been assessed and the winning companies had already been selected and notified. The only remaining step was that the companies had to complete their environmental impact studies, as required by Indonesian environmental law. The work of the Natuna team at BPPT was thrown into disarray when a letter came down directly from B.J. Habibie instructing the team to involve Thareq’s company, P.T. Repindo, in the Natuna project. The problem was, P.T. Repindo had not even participated in the tender, and the other companies that had already been awarded the contracts were well aware of this.
Trulyanti Sutrasno is the daughter of B.J. Habibie’s older sister. Known as the “iron lady” of BPPT and, according to my sources inside the government unit, “disliked by 99.99 percent of BPPT employees,” Trulyanti was handed the post of Deputy for Administration of BPPT. She is infamous for producing inflated budgets for all BPPT operations she handles. Her office, as well as several bureaus directly under her supervision – especially the Biro Perencanaan (Bureau for Planning) – are collectively referred to by BPPT employees as “The Mafia” for their activities, which, my sources report, “consume most of BPPT’s budget and technical activities.”
Trulyanti’s husband, Sutrasno, was awarded contracts running into the tens of millions of dollars to furnish BPPT’s new building, which was recently completed. Sutrasno also owns the company awarded the contract to renovate the old BPPT building. This was also worth many millions of dollars.
Leaving nothing to outsiders, Trulyanti and her husband also are major shareholders in two catering companies, P.T. Amelia and P.T. Pasar Minggu, that have exclusive contracts to cater all BPPT functions – from meetings, to workshops, to seminars, to the employee’s canteen.
Ainun Habibie, Minister Habibie’s wife, chairs ORBIT, another of Indonesia’s unwieldy and corrupt “charities” (yayasan). ORBIT collects funds automatically deducted from the pay checks of every civil servant across Indonesia. ORBIT is supposed to fund scholarships. It has never submitted to an independent audit, no one knows how much money it collects, and it remains completely unaccountable. ORBIT is widely suspected of being one of President Suharto’s main instruments for accumulating and laundering corrupt funds.
Said one BPPT official I interviewed, “Directors of state and private companies under Habibie’s influence compete with each other to send her gifts of diamonds and other things to please her and to indirectly please her husband.”