Soeharto probe likely to fail<\/p>\n
By Jeffrey Winters<\/p>\n
CHICAGO, Illinois, United States (JP): Indonesia's former
\npresident Soeharto and some of his family members have been
\noutspoken and even pugnacious in their claims that they have not
\namassed huge and illegal fortunes over the course of the New
\nOrder. He has even made the remarkable claim that he is \"poor\"
\n(or people have done so on his behalf).<\/p>\n
There are good reasons for Soeharto to adopt this posture.
\nOne is that by making such bold claims, the many Indonesians who
\ndon't want to believe their ex-president could be so greedy
\n(rakus) can be lulled back into the same satisfied and
\ncomfortable naivete they maintained for decades.<\/p>\n
There is another group who are happy he is putting up such a
\nstrong public-relations fight because they have stolen a lot of
\nmoney too, and they would like all talk of tracking and
\nrecovering assets to stop before it becomes a snowball
\nthat engulfs their smaller, though still significant, fortunes.<\/p>\n
But there is an even more important reason Soeharto and his
\nallies dare to thumb their noses at critics demanding that his
\nfortune be revealed and returned to the people from whom it was
\nstolen. He is obviously confident no one will be able to prove
\nhow much money he has or where it is hidden.<\/p>\n
His confidence is well-grounded.<\/p>\n
Tracking hidden and stolen wealth is an extremely difficult
\nprocess requiring some of the most talented lawyers and
\ninvestigative accountants in the world (just ask the frustrated
\nFilipinos about this).<\/p>\n
The only thing the half-hearted investigations being done by
\nthe Attorney General in Jakarta will produce is a whitewash for
\nSoeharto. I doubt the Attorney General or his staff would get
\nvery far, even if they wanted to.<\/p>\n
The truth is that without a serious effort involving first a
\ncriminal trial and conviction in Indonesia, and then a
\ncoordinated international investigation executed by the world's
\nvery best money chasers (who charge substantial fees for their
\nhighly specialized work), Indonesians have no chance of
\nrecovering much, if any, of Soeharto's wealth.<\/p>\n
Probably the best that can be hoped for is the seizure of some
\nof the Soeharto family's domestic assets.<\/p>\n
Let me explain why this is so. First, no one will find any
\nforeign accounts in Soeharto's name, either in Switzerland and
\nGermany, where he used to keep large deposits, or in Austria,
\nwhere he was recently rumored to have transferred a major part of
\nhis assets. Readers should note that Austria is a much more
\nsecretive and secure place to hide ill-gotten wealth than the
\nmore famous location, Switzerland.<\/p>\n
Why are there no accounts in Soeharto's name? Because Soeharto
\nis shrewd and had enough money to hire the very best legal advice
\nand assistance to launder and hide his wealth.<\/p>\n
How is it done? Let me give just one example. Soeharto's first
\nstep would be to give \"power of attorney\" (powerful signing
\nrights) to a lawyer working on his behalf. Then the first lawyer
\nwould open a similar power-of-attorney arrangement with a second
\nlawyer. This would be done for a third time and maybe even for a
\nfourth time.<\/p>\n
Then, as the money moved from attorney to attorney, accounts
\nand deposits would be made in the name of each attorney or even
\nthe name of their law firm. Therefore, the final deposit in a
\nSwiss or Austrian bank account would be in the name of a lawyer,
\nand that lawyer may not even know that it is Soeharto's money he
\nor she is handling via the chain of powers-of-attorney.<\/p>\n
In fact, it is very likely that the lawyer does not know the
\norigin of the money. Part of the safety in this type of operation
\ncomes from keeping each link in the money-laundering process as
\nignorant as possible about earlier links in the chain. Each link
\nin the chain deals only with the previous member. A crucial step
\nin tracking own the money would be to identify the first link in
\nthe chain -- the attorney or attorneys who worked directly for
\nSoeharto in person.<\/p>\n
From there, it would be possible to follow all subsequent
\ntransactions and power-of-attorney contracts leading to the
\ndeposits themselves.<\/p>\n
Increasingly banks are coming under pressure to conduct at
\nleast some basic investigation of their depositors and document
\nwho they are, and where their money is coming from. This is
\nsupposed to occur, especially when the sums of money involved are
\nvery large -- as would be the case when Soeharto moved his money.<\/p>\n
The problem is, most banks do not follow these procedures very
\nwell, there is weak international enforcement and Swiss and
\nAustrian banks in particular are the least diligent in
\ndocumenting who depositors are and the sources of major deposits
\nor transfers.<\/p>\n
Why do they do this?<\/p>\n
Because it is very profitable to receive and hold these
\ndeposits or transfer them to other banks for a fee. Furthermore,
\nintermediary lawyers always get very good fees for entering into
\npower-of-attorney arrangements with other lawyers and handling
\nlarge sums of money without asking questions. In fact, this is a
\nvery common practice among lawyers, especially those handling
\ncross-border transactions, transfers, and deposits.<\/p>\n
This is why Soeharto and his cronies can laugh at their
\ncritics. They know that the Habibie government and senior figures
\nin the Armed Forces (ABRI), nearly all of whom have been in bed
\nwith Soeharto for their entire careers, are not enthusiastic
\nabout finding and recovering the money.<\/p>\n
They know that even if a determined government were in power,
\nthe chances of success would be very low.<\/p>\n
There is another reason Soeharto and his associates can taunt
\nthe Indonesian public. In order for skilled accountants and
\ninvestigators to track and recover the ill-gotten wealth of
\nfallen government leaders like Soeharto, they must first have
\nevidence that laws were broken. This is not a trivial matter and
\nit has been a major obstacle to the Philippines' efforts to
\nrecover the wealth of the Marcos family.<\/p>\n
No one has yet demonstrated that Soeharto broke any laws as he
\nbuilt his fortune, and more disturbing still, he may not have
\nacted illegally.<\/p>\n
This is not a trivial matter, and it may prove to be the most
\nimportant obstacle to chasing and recovering his assets. To give
\nSoeharto a generous cut from projects may not have been illegal,
\nstrictly speaking, and anyway it could be very hard to prove.<\/p>\n
Also, a tremendous share of Soeharto's fortune was channeled
\nthrough foundations (yayasan), and there is virtually no
\nIndonesian law governing the conduct of foundations. If there is
\nno law, there can be no illegal action. And before international
\naccountants and investigators can do their work, they need clear
\nproof that laws were broken.<\/p>\n
No wonder Soeharto, his family members, and other cronies have
\nthe confidence to declare they have done nothing wrong as they
\nenriched themselves. Despite amassing fortunes in the billions of
\nU.S. dollars, the sad truth is that Indonesian laws might be so
\nweak that legally speaking, their claims of innocence could be
\ntrue.<\/p>\n
Soeharto and those who surrounded and worked closely with him
\nfor so many years deserve to pay for the harm they inflicted on
\nthe people of Indonesia over three decades.<\/p>\n
The best way to bring Soeharto to justice would probably be to
\nput him on trial for the disappearances, torture, and massacres
\nthat occurred under his rule.<\/p>\n
Indonesians could handle this challenge themselves and would
\nnot have to rely on the cooperation of secretive and collusive
\nbankers in Europe and the Caribbean.<\/p>\n
The writer is a lecturer in political science at Northwestern
\nUniversity, Chicago, U.S.A.<\/p>",
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