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Corruption Cost Indonesia $580M

December 30, 1998

JAKARTA, Indonesia (AP) _ Corrupt business practices, largely by the family and associates of former President Suharto, cost Indonesia as much as $580 million over the last five years, the government concluded in a report released Tuesday.

Authorities have been investigating evidence of corruption during the 32-year rule of Suharto, who was ousted in May after student protests and riots by Indonesia’s poor.

The report on corruption could bolster an investigation into the origin of Suharto’s wealth that critics have dismissed as cosmetic. Suharto has denied any wrongdoing.

Hartarto, the chief Cabinet minister for development and administrative reform, said the state expected to recover $43 million of the money lost because of corruption in contracts and government agencies between 1993 and September 1998.

The government has terminated dozens of investment projects tainted by collusion and nepotism, said Hartarto, who like many Indonesians uses only one name.

Suharto’s credibility was eroded in part by allegations of official graft at a time when Indonesia’s economy was buckling under the worst financial crisis in decades. Millions of people have lost their jobs and inflation has soared.

President B.J. Habibie ordered an investigation of his predecessor and one-time mentor after coming under pressure from student protesters who want 77-year-old Suharto to be put on trial.

Government opponents question whether Habibie, who owes his position to Suharto and whose family also owns dozens of businesses, is conducting a serious probe.

On Tuesday, prosecutors questioned one of Suharto’s three sons, businessman Bambang Trihatmodjo, about his role as head of one of seven charitable foundations once owned by the former president.

The foundations were allegedly used in part to collect money that Suharto’s family used for its own benefit. After being questioned, Bambang said the foundation provided funds ``for social needs.″

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