Ghalib says Tommy's Timor car nepotistic

Ghalib says Tommy's Timor car nepotistic

JAKARTA (JP): Attorney General Andi M. Ghalib described the
former president Soeharto's national car program, entrusted to
his own son Hutomo Mandala Putra, as a graft-infested project
designed entirely for self-profit.

Ghalib said in a statement distributed to members of the House
of Representatives on Monday that the national car project, run
by Hutomo's firm PT Timor Putra Nasional, had caused the country
losses of US$1.55 billion.

"The national car program stipulated in Presidential Decree
No. 42/1996 was a program of nepotism because it was designed
solely to profit the family," he said.

Ghalib said the issuance of the presidential decree and
regulations backing the projects were made possible merely
through collusion between Hutomo and related government
officials.

The officials misused their authority, opportunities and
facilities given to them because of their rank and position, he
said, adding that the scheme could lead to corruption proceedings
in a criminal court.

Ghalib is scheduled to summon on Tuesday former industry and
trade minister Tunky Ariwibowo, who issued the ministerial decree
in Feb. 1996 authorizing Timor to carry out the national car
project.

Timor was the sole recipient of an import duty and luxury tax
exemption from late 1996 to January 1998 when the International
Monetary Fund insisted Indonesia stop the preferential treatment.
The tax exemption made the car 60 percent cheaper than its
counterparts on the domestic market.

Timor was supposed to increase its local content by 20 percent
annually until it reached 60 percent in the third year.
In the first year, it was allowed to import all the originally
Sephia cars from South Korea's Kia Motors Corp. without paying
the taxes.

Ghalib said the Timor project cost $1.05 billion in losses to
the government from exempted luxury tax and import duty of the
imported Timor cars.

To make up some of this loss the government has demanded that
Timor repay Rp 3.39 trillion ($425 million) for the exempted
import duties on some 39,000 imported Timor cars.

The government argues that Timor has not fulfilled the
required local content stipulation in the deal.

In addition to the unpaid taxes, the state had also suffered
$500 million in losses from syndicated bank loans given by 13
state and private banks to finance Timor's manufacturing plant,
Ghalib said.

Development and Finance Comptroller (BPKP) Chairman Soedarjono
said the government had suffered Rp 1.76 trillion in losses from
graft practices in the first semester of the current fiscal year
that began on April 1, 1998.

Some Rp 219 billion and $205.48 million of the total were
categorized as criminal offenses and therefore could be recouped
through criminal proceedings and the perpetrators could face
corruption charges, Soedarjono told House's Commission II for
public administration.

The remaining Rp 27.91 billion was lost through civil
malfeasance, he said.

Noncriminal cases are normally handled by related ministries
or governmental bodies, or transferred to the Attorney General's
Office to recover the lost money.

Soedarjono said the comptroller also suspected that 69 out of
some 2,000 presidential decrees issued during Soeharto's seven
presidential terms might be tainted with corruption, collusion
and nepotism.

Most of the problem presidential decrees were issued during
his 1993/1998 term of office.

The comptroller, however, would only evaluate 37 of the 69
decrees for the time being due to their urgency, he said.

Soedarjono said that since Soeharto was forced to step down
and replaced by his vice president B.J. Habibie in May, it had
become easier for the comptroller to investigate graft.

He said there were no longer political interventions as in the
Soeharto era, when many government irregularities were concealed
or went unchallenged.

"The reform era really helps our auditing job. Those who want
to intervene are deterred now," he said. (das)