American citizen charged in Karaha Bodas graft scandal
P.C. Naommy, Jakarta
Police have declared an American citizen a suspect in the Karaha Bodas geothermal scandal, bringing the number of the suspects to three.
The police charged Robert McKutchen, the vice president of Karaha Bodas Co. (KBC), along with two other suspects, Priyanto, a former head of the geothermal division at state-owned oil company Pertamina, and a member of his staff, Syafei Sulaiman, for their roles in the alleged graft case.
The charges followed the questioning of 24 people from the two companies, National Police chief of detectives Comr. Gen. Suyitno Landung Soedjono said on Saturday.
He said all the three suspects were held responsible for "fake transactions" and a mark-up deal worth US$19 million, without providing details.
National Police spokesman Insp. Gen. Paiman said McKutchen may have returned home to his country, but added that his office had sent summonses for the two other suspects from Pertamina for questioning later this week.
The government has asked the police to investigate possible corruption in the process of awarding the contract by Pertamina after the United States court ordered Pertamina to pay Karaha Bodas more than $290 million in compensation for the cancellation of the project.
KBC's geothermal power project in Garut, West Java was canceled by the government in the wake of the economic crisis in 1998, while the contract was awarded to the firm by Pertamina in 1994.
In order to get its investment back and seek compensation for its potential losses, the KBC filed a lawsuit against Pertamina with the Geneva Arbitration Court in 2000, which ruled in favor of KBC.
KBC later asked the U.S. to affirm the arbitration decision. The move led to several years of court battles between Pertamina and the KBC in the U.S. courts, which ended recently with a ruling from the U.S. appeals court ordering Pertamina to pay KBC about $290 in compensation.
Pertamina has decided not to appeal the ruling and agreed to pay the compensation. However, it is still unclear whether the compensation will be paid by the government or Pertamina.
At the order of the U.S. court, several banks in the U.S. have frozen more than $500 million in deposits owned by the Indonesian government and Pertamina.
A senior official of Pertamina recently said Indonesia would pay compensation to KBC in accordance with the court's order but the government would investigate any possible corruption in the awarding of the contract to KBC and the development of the project.