Bob used deviant procedures in mapping contract: Witness

Bob used deviant procedures in mapping contract: Witness

JAKARTA (JP): A witness in the multimillion dollar graft trial
of timber tycoon Mohamad "Bob" Hasan told a court hearing on
Thursday that proper procedures had been neglected regarding
payments made by forest concessionaires to the defendant's firm
over an aerial mapping project.

A member of a verification team on project funding at the
Association of Indonesian Forest Concessionaires (APHI), Robert
Sianturi, said the APHI team audit reports found that a number of
deviant procedures had been committed during the project.

"Audit reports show that US$49 million was paid to the
defendant's firm, PT Mapindo Parama (MP), via Apkindo (the
Association of Indonesian Wood Panel Producers)," Robert told the
hearing at the Central Jakarta District Court, which was presided
over by Judge Subardi.

The defendant, who chaired APHI from 1989 to 1998, was also
chief of Apkindo at that time.

Robert said that this was an incorrect procedure, since an
April 1989 contract between APHI and PT Adikarto Printindo (AP)
-- which became PT MP after Hasan bought the firm -- clearly
stated that payments must be made to PT AP via APHI exclusively.

Via the 1989 contract, APHI had granted the project to PT AP,
which was eventually bought off by the defendant. The defendant
then changed the firm's name to PT MP in 1991.

Prosecutors have accused Hasan of causing the state US$75.62
million in losses and $168 million in losses to APHI via a
fraudulent mapping project which was not preceded by an open
tender.

Just as Apkindo and APHI were then headed by the defendant, so
was the Indonesian Sawmillers and Wood Product Manufacturers
Association (ISA).

"PT Mapindo, Apkindo, ISA and APHI, all of them headed by the
defendant... it's like the money went from one pocket of the
defendant to another," Robert said.

As reported earlier, the mapping and photographing project was
carried out after forest concessionaires paid $2 per cubic meter
for logs bound for export.

Robert added that the audit reports carried the evidence of
these payments made by Apkindo to PT MP, as receipts for those
payments were signed by Asmaning Tjipto Wignjoprajitno in his
capacity as Apkindo executive chief.

Prosecutors have also accused Asmaning, who incidentally was
also executive chief of APHI, for working in collaboration with
the defendant in the fraudulent project, and that he would be
tried separately.

"One pays after one sees the quality of work, normally. Here,
all forest concessionaires had to pay beforehand," Robert said.

Clearly implying that PT MP had marked up the contract for the
mapping project, prosecutors earlier said that APHI and Apkindo
had paid MP $2.49 per photographed hectare, whereas in
comparison, state forestry firm, Perum Perhutani, a forest
concessionaire and an APHI member, used another firm's services
and paid only $1.80 per photographed hectare.

Robert added that the second fault he saw in the 1989 mapping
contract was that it had never been renewed to carry the new name
of the firm and therefore still carries the name of PT AP.

A third fault, he said, was that the contract stated that PT
AP was obligated to pay $300,000 as a guarantee to APHI should
anything go wrong with the mapping project.

"This amount has never been paid," Robert said.

He cited PT MP's fourth mistake as having failed to pay up to
date the "10 percent tax" to the Directorate General of Tax from
the payments PT MP received from the mapping project.

"Tax officials have issued claims to PT MP several times and
are so fed up they have turned to APHI to pay up for PT MP,"
Robert said.

Robert also said that in an interview he carried out with two
staff members from APHI, he had come to the conclusion that the
staff members had been threatened into not drawing up the correct
"progress report" on the project.

"The APHI staff members, Edi and Hendro, had repeatedly asked
the defendant to form a monitoring body which could file a report
on the progress of this project. The defendant rejected this,"
Robert said.

"They clearly told me that they felt if they acted against the
defendant's wishes, both would lose their jobs."

In the same hearing, chief prosecutor Arnold Angkouw asked
another witness, Budiono Kartohadiprodjo, a commissioner at PT
MP, to explain the hundreds of transfers of funds from PT MP into
several firms chaired by the defendant, immediately after PT MP
had received funds from the state and APHI for the project.

"They were just loans... they have not been paid back,"
Budiono said.

When asked to name the firms, Budiono said he could not
remember their names since there were several.

Arnold then named at least 20 firms under the defendant's
group of companies, including PT Nusamba, PT Sarana Graha and PT
Baruna Inti Lestari. (ylt)