End of an Era: Indonesia Pursues Suharto Circle’s Debts
Power seeps away from once-feared family and cronies
The Indonesian government is going after the children of the late strongman Suharto and the cronies who once held sway over Jakarta in an attempt to collect money misappropriated during the 1998 financial crisis that has remained unreturned for more than 20 years.
The money was looted in an orgy of theft by bankers and others from Bank Indonesia's liquidity assistance fund (BLBI) and transmitted out of the country, much of it into banks in Singapore, where it remains. A task force has been formed to collect the debts and confiscate the assets of BLBI obligors and debtors, including two Suharto children. The government is after a third Suharto scion for other debts as well. The government has warned the evaders to immediately pay off their debts if they did not want to be hauled into court.
The Suharto family has remained largely untouched since Suharto’s fall in 1998 despite allegations that they stole billions of dollars during his 32 years in power. The children continue to be influential in business and politics in Jakarta. At that, they are at one with the children of the late strongman Ferdinand Marcos in the Philippines, who have never returned the billions the family stole, or former Prime Minister Najib Razak in Malaysia, who has been accused of stealing at least US$681 million from his country by the US Justice Department, and who remains free despite being convicted of corruption and ordered jailed for 12 years.
The BLBI was an assistance scheme provided by Bank Indonesia, the country’s central bank, to banks that experienced liquidity problems during the 1998 monetary crisis. The aid funds totaled Rp147.7 trillion (US$10.28 billion). However, 95 percent – Rp138.4 trillion – was misappropriated, based on an assessment by the Supreme Audit Agency in 2000. In 2003, the courts began to try Bank Indonesia officials including Hendro Budiyanto and Heru Supraptomo, as well as several bank owners on charges of conspiracy to misappropriate the funds…