By George J. Aditjondro
Having accumulated their initial capital from the Salim Group of Liem Sioe Liong and Nusamba Group of Bob Hasan, Suharto's six children began to form their own conglomerates. During this phase, Daddy was always ready to give a push here and there, beginning with the eldest son, Sigit.
During the Lockheed Congressional hearings in the 1970s it was revealed that an Indonesian company, PT Bayu Air, had also obtained commissions from Lockheed. This company of Sigit began its business by airlifting cattle from the Suharto family Tapos ranch in Bogor, West Java, to outer island provinces, using Indonesian air force planes whose logos were simply plastered over with Bayu Air logos.
The first Tapos cattle came from Queensland, and were shipped in late 1975 by Indonesian navy ships, after dropping the Indonesian troops that invaded East Timor.
This habit of using government property to start a private business was continued by Suharto's daughter Tutut, when she set up her own television station, TPI, by using the TVRI studio in Jakarta, without paying full rental.
Similarly with Tommy, Suharto's youngest son: his private airline, Sempati Air, has used a terminal at the new Soekarno-Hatta international airport near Jakarta, without paying full airport rental, fuel and catering bills.
Since Suharto's children rushed into business, most major state companies have been locked into joint ventures with their private business conglomerates. These include the state-owned oil company, Pertamina, and its subsidiaries, public works construction companies, state-owned pharmaceutical companies, state-owned telecommunication and satellite communication companies, and many military-owned companies directed by the technology minister, Dr B.J. Habibie.
The cancellation, under IMF pressure, of many Suharto-linked monopolies is not going to put a significant dent into the first family's wealth. Thanks to their 30-year monopolies, their companies dominate the domestic market, which under the current slumping economy will not be able to accommodate many new competitors.
The IMF-Suharto agreement is like opening the door of a mansion for guests to come in and stay, after all the rooms in the mansion are already fully occupied by the clan members.
During the last 20 years, the Suharto-linked companies have also put their eggs in as many overseas baskets as possible. Benefiting from their father's role in ASEAN, APEC and the Non-Aligned Movement, Bambang and Tutut's companies have expanded aggressively overseas.
Tutut's 450 kilometres of toll roads, which will be operated by her companies and transferred to the host countries after 25 years, are strung over Indonesia, Malaysia, the Philippines, China and Burma.
Bambang's joint ventures in Manila and Sydney have built huge water projects and power plants in the Philippines, Indonesia and China. Linking up with the Sydney-based Canadian mining entrepreneur, Robert Friedland, Bambang has also ventured into gold mining in Vietnam, Burma, and Kazakhstan.
The lucrative trade in crude oil and LNG has been a "specialty" of the Suharto sons and their uncle, Sudwikatmono, since the mid-1980s, financed by petro-dollars accumulated through earlier joint ventures with Ibnu Sutowo, the deposed director of Pertamina.
A portion of the US$10 billion credit left behind by Ibnu Sutowo had certainly slipped into the Suharto family coffers, which explains why Ibnu Sutowo has never been taken to court.
From these oil contacts, Bambang and Tommy were able to build their LNG fleets, serving the South Korean and Taiwanese markets respectively.
At the moment, Bambang's Singapore-based Osprey Maritime is rapidly becoming one of the largest oil tanker fleets in Asia, after acquiring the Monaco-registered transport company Gotaas Larsen. This Norwegian company was one of the many suppliers of Pertamina's bankrupt LNG fleet in the mid-1970s.
Like a Mafia godfather, Suharto also made sure to satisfy his in-laws, especially Tutut's in-laws, the Kowara family, and Titiek's in-laws, the Djojohadikusumo family (Titiek is Suharto's second daughter).
The Kowaras have developed their lucrative construction business in Brunei-Darussalam. A partly Kowara-owned conglomerate, the Medco Group, has also ventured into oil mining in Burma and Kazakhstan.
The Djojohadikusumos' business ventures have far surpassed the Kowaras'.
Financed by their banking empire, which was protected by Titiek's brother-in-law, central bank governor Sudradjat Djiwandono, the Djojohadikusumo-Suharto companies have expanded their businesses in many countries, including a million-hectare timber concession in Cambodia, cotton in Uzbekistan, a textile factory in Portugal in a joint venture with the German chemical giant Hoechst and the Indian-Indonesian conglomerate, the Texmaco Group, and unspecified businesses in Guinea-Bissau.
In the two Portuguese-speaking countries, the Djojohadikusumo-Suharto joint ventures have an additional agenda to perform, namely to neutralise supporters of the free East Timor movement.
Banking on Suharto's role as chair of the Non-Aligned Movement, even Suharto's relatives and neighbours in his village of birth in Godean, Yogyakarta, made a fortune for themselves. Their village-based company, the Musa Group, controls one of the biggest timber concessions in Suriname, with plans to expand into Guyana and Brazil.
A grandson of Suharto has also moved into the international arena, choosing an illegal commodity. Together with his uncle, Indra Rukmana (Tutut's husband), Ari Haryo Wibowo has smuggled ecstasy from the Netherlands, using pilots of Indonesia's state airline, Garuda, as carriers. Their commodity is now distributed from Jakarta to Surabaya.
Ari's more respectable international business is to export bird's-nest to China and to import (read: monopolise) Chinese medical herbs.
The combined assets of the Suhartos, Kowaras and Djojohadikusumos certainly make them the three richest families in Indonesia. CIA estimates, which put the Suharto family's wealth at US$5 billion, might already be out of date by now.
It is clear that the only way to put an end to this cancerous growth of the Suharto-linked companies, which has resulted in a tremendous capital flight to China and other countries, is to cease all military and economic links with the Indonesian government, as long as it is still ruled by Suharto, his family members and their cronies.
Ironically, Washington has indicated that it might support candidates other than Suharto, but who would be favourable to the Suharto clan businesses, such as (retired) General Sudharmono, an old business partner of the Suharto family. His son-in-law, Bambang Permadi, holds the McDonald's franchise in Indonesia and works closely with the Golden Truly supermarket chain of Suharto's half-brother, Sudwikatmono.
Indeed, supporting the status quo is the message sent to the Indonesian people by the repeated phone calls of US President Clinton to Suharto, and by sending his deputy treasury secretary and defence secretary to meet and give their moral support to Suharto, while the ailing president was negotiating with the IMF.
Probably, Washington's main consideration is that the Jakarta establishment would not rock the boat for the large US investors, such as Freeport McMoran and Mobil Oil, which have themselves benefited from their cozy relationship with the Suharto oligarchy.
[George J. Aditjondro has been documenting the rise of Suharto-linked businesses since working as journalist for the (now banned) Tempo magazine in Indonesia (1971-1979). After escaping from a political trial in Indonesia in February 1995, he now teaches the sociology of corruption at the University of Newcastle.]