Indonesia Vainly Chases Suharto’s Billions

More than 17 years after the Indonesian strongman Suharto fell and more than seven years after his death, the family probably retains enough clout in Jakarta to defy a Supreme Court ruling that they must repay about $325 million gained from massive corruption during his years in power.

Even that amount is a tiny fraction of what the Suharto family is believed to have stolen. Successive governments have half-heartedly tried to recover funds rumored to be between US$15 billion and US$35 billion. After he died at the age of 86 in 2008, authorities made little effort to go after his six super-rich children, all of whom benefited from government contracts and easy finances. They remain fabulously wealthy and retain significant economic power, with Suharto’s daughter Siti Hediati Hariyadi, known as Titiek, a Golkar Party member of parliament. Hutomo “Tommy” Mandala Putri, the youngest son, controls Humpuss group of companies, which has interests in energy, coal, petrochemicals and transport, while he also owns several resorts in Bali. The other children also control significant interests in the country and overseas.

W. Paul Rowland, a Jakarta-based associate with the Center for Democratic Institutions at Australian National University, says it's unlikely the money will be repaid although he does say the ruling's potential significance lies in the fact that the Suharto family may be finally losing its impunity.

Thus the ruling is a very small win for President Joko ‘Jokowi’ Widodo, who came to power last year on promises to fight corruption but who has since failed to stop sustained attacks by police against the country’s respected anti-corruption watchdog.

Tommy claimed on his Twitter account that the Supreme Court’s July 8 decision that an education foundation set up by Suharto should repay US$315 million plus Rp139.2 billion ($10.09 million) was an act of vengeance.

Was it really a settling of old scores against the Suharto clan by Jokowi’s political patron, former president Megawati Sukarnoputri, whose father, founder and President Sukarno, was ousted by Suharto? Probably not.

Hendrajit, the executive director of the Jakarta-based Global Future Institute, says the Suharto family and cronies had reached deals with the administration of former president Susilo Bambang Yudhoyono that kept them immune from prosecution. He says the Jokowi administration is now renegotiating those deals.

“Jokowi has no serious intention of prosecuting the Suharto children because the main goal is just to disturb their favorable condition,” Hendrajit said.

The case has meandered through the courts for nearly a decade. The Supreme Court’s ruling centered on the Supersemar Foundation, which takes its name from a document Suharto used to formally seize power from Sukarno in 1966. The foundation was established in 1974, ostensibly to providing scholarships to university students. Much of its funding came from state banks, which had to submit 2.5 percent of their total income to Supersemar. State prosecutors found that almost 84 percent of the foundation's funds had been diverted to a bank and private companies controlled by the Suharto clan and its cronies.

Suharto controlled six similar charitable foundations that were used as cash cows. State prosecutors focused their attention on Supersemar when trying to bring Suharto to trial for corruption, but his lawyers and doctors argued that a series of strokes had left him mentally disabled, so the charges were thrown out in 2000.

The Attorney General’s Office in 2007 launched a civil lawsuit against Suharto and Supersemar, demanding compensation for the state of US$420 million and Rp185 billion. The South Jakarta District Court in 2008 ruled that Supersemar had embezzled funds and should repay $105 million and Rp46 billion (US$3.9 million) – only 25 percent of the amount sought by prosecutors.

The verdict was upheld by the Jakarta High Court, which increased the compensation amount to US$315 million and Rp139.2 million. The Rp139.2 million figure was claimed to be a typing error that should have been Rp139.2 billion. The Supreme Court then upheld the ruling with the revised figure.

Enforcement of the ruling is now in the hands of South Jakarta District Court, which on Friday was still waiting to receive a copy of the verdict. It remains to be seen who will repay the money, for which there will be an eight-day deadline. Supersemar’s assets were already handed over to a state ministry, the Coordinating Ministry for People’s Welfare, in 2000.

Suharto family lawyer Juan Felix Tampubolon has questioned whether the foundation has any assets left. He said Supersemar may have to sue some of the companies that received some its funds. Bank Duta, which received US$420 million from the foundation, was in 2000 merged with eight other banks to form Bank Danamon.

The former head of the Attorney General’s Office Asset Recovery Center, Chuck Suryosumpeno, said Suharto’s heirs will have to bear the payment obligation. He said the court should seek assistance from an asset recovery agency if the children do not voluntarily return the funds. Attorney General Prasetyo said his office would seize assets once it has a copy of the ruling and may then form a special team to examine Supersemar’s assets.

Judges may be reluctant to order the Suharto children to repay the money. The last judge who convicted a Suharto of corruption was Supreme Court justice Syafiuddin Kartasasmita. In 2000, he sentenced Tommy to 18 months in jail for corruption. Tommy went on the run and paid two hitmen to murder the judge.

The Supreme Court cravenly responded by overturning the corruption conviction. Tommy eventually gave himself up and spent less than five years in jail for murder and possession of weapons. The two hitmen received life sentences. Following his release, Tommy has expressed political ambitions, saying he would like to lead Golkar, the political vehicle used by his father. His assets make him an attractive candidate to parties more interested in wealth than ethics.

Suharto family lawyer Mohamad Assegaf said media reports stating that Suharto’s children would have to pay compensation were incorrect because they had not been named in the ruling. "There was a lot of commotion over claims the heirs would have to pay. But the Supreme Court has clarified that it is not true," he told Kompas.com on Wednesday.

Supreme Court spokesman Suhadi said that although an official copy of the ruling is yet to be released, the onus of paying the compensation lies with Supersemar and not with the Suharto children. The children are not on the board of trustees of Supersemar.

The fact that original evidence relating the Supersemar case disappeared while in storage at South Jakarta District Court may further weaken efforts to regain the funds. So while the Supreme Court’s ruling is positive, don’t be surprised if it ends up in legal limbo.

Roy Simson is a longtime editor and consultant based in Jakarta