House members grill Tommy over clove monopoly

JAKARTA (JP): The youngest son of former president Soeharto, Hutomo "Tommy" Mandala Putra, was grilled on Monday by members of the House of Representatives over an alleged manipulation of clove farmers' money at the now defunct Clove Marketing and Buffer Stock Agency (BPPC).

Darul Siska, the head of the special team of House Commission V in charge of trade and industry, said that Tommy, the chairman of the dissolved clove trade monopoly was asked to clarify the charge that the agency did not return part of the money kept by the farmers at the agency.

"But Tommy denied the charge," he said.

Tommy told the closed meeting that the agency had no unsettled obligation because it had paid back the entire Rp 1.1 trillion (US$152 million) in funds the agency collected from farmers to the concerned parties right after it was dismantled by the government in mid-1998.

However, according to the Primary Cooperative Association (Inkud), BPPC has still not paid Rp 175 billion, including Rp 107 billion in bank loan interest and Rp 46 billion in depreciation costs of Inkud's clove procurement.

Tommy refused to comment on the allegation to the dozens of journalists waiting patiently outside the room during the closed hearing session.

"But, he said he would try to settle the misunderstanding with Inkud through consensus. He said it was only a matter of misinterpretation of the contract," Darul told the media after the hearing.

Darul said the commission had suggested both parties bring the dispute to court if they failed to achieve an agreement on the problem.

A member of the special team, Azwir Dainy Tara, said they had asked Tommy to "listen to his conscience" and pay back the obligation.

Azwir said it was important for BPPC to return the funds to Inkud so that the latter could deliver the money to the eligible clove farmers, who had been asking for their money.

BPPC was a private institution appointed and granted a clove- trading monopoly by the Soeharto regime in early 1991.

Under the system, farmers were required to sell their cloves to the agency through the primary cooperatives Inkud and Puskud. The agency then sold the cloves to producers of clove blended cigarettes under a compulsory purchase arrangement.

The government set the floor price for standard-quality cloves at Rp 8,000 per kilogram. However, farmers only received Rp 5,000 per kilogram for cloves they sold to BPPC. The agency kept the remaining Rp 2,000 as equity shares in cooperatives and transferred Rp 1,000 to a special account for crop diversification funds.

BPPC was dismantled in mid-1998 after Soeharto agreed earlier that year with the International Monetary Fund (IMF) to liberate the clove-trading monopoly. The IMF had made the scrapping of clove-trade monopoly a prerequisite for a $43 billion bailout package to salvage Indonesia's ailing economy.

During its time, BPPC held a stranglehold on the clove trade and collected Rp 1.1 trillion in revenue from clove farmers. In May 1998, Hutomo symbolically transferred the Rp 1.1 trillion fund to Inkud. At the same time, he also sold his entire business arm PT Humpuss' stake in wholesaler Goro to Inkud.

The hearing between the special team and Tommy, which included former BPPC secretary general Yance Worotijan and president of PT Humpuss Abdul Wahab, was marred by a shooting incident.

A tiny hole, believed to be the result of a shooting, was found in a window in an alley adjacent to the secretariat of Commission V.

Witnesses said they heard a blast and spotted a crack in the window just a couple of minutes after Tommy and his friends passed the alley and entered the room where the hearing was held.

Another incident occurred when the tight-lipped Tommy made his way out of the building as dozens of workers, who had just arrived for a protest against improper labor treatment by their factory, harassed him with harsh words and tried to block his car.

Darul said his team did not know whether the shooting was aimed at putting pressure on them, but insisted that team members were not scared off by the incident.

Darul added that since the hearing had not satisfied the team due to its indeterminate results, the commission would hold another session with BPPC and the other concerned parties.

He said the commission would soon summon Inkud chairman Nurdin Khalid who did not show up at Monday's session because he was in Mecca performing the haj, as well as former Minister of Cooperatives and Small Enterprises Subiakto Tjakrawerdaya and Goro's owner Ricardo Gelael. (cst)