Law abusers now crave for its care

By David Hough

SWANBOURNE, Western Australia (JP): The cartoon attempts to detain Tommy Soeharto are echoed in various jurisdictions around the world. Those who flout the law in their greedy pursuit of dubious profits, now crave for its protection to avoid jail, and to keep their assets from the prying eyes of corporate authorities and wronged shareholders.

These people are successful in their corporate frauds and the avoidance of judicial consequences because of the duplicitous support of both the legal and the accounting professions. Recent editorials alluded to the role of lawyers but made no mention of accountants. They too have a lot to answer for, in Australia as well as in Indonesia.

The Australian case of the corporate thief, Alan Bond, is illustrative.

Bond rose to prominence during the 1980s, along with Christopher Skase, now a fugitive from justice and sunning himself in Spain, and the late Laurie Connell who died while on trial.

Bond was eventually convicted of the largest corporate fraud in Australian history. Ho stole nearly one billion dollars of shareholders' money. And that was but one event in his trail of corporate delinquency.

With the assistance of unscrupulous accountants and the negligence of myopic auditors, he build a firewall around his assets, and concealed them offshore. Even today, corporate regulators are still unsuccessful in getting access to them.

Bond's team of highly qualified, expensive and equally mercenary lawyers pitted their brains and their skills to keep their client out of jail. They sort to exploit every technical loophole, every delaying tactic that they could.

It was an expensive and complex litigation -- most "white- collar" crime is. Pursuing corporate criminals through the courts costs Australian taxpayers and shareholders millions of dollars a year.

Medical practitioners testified that Bond was unfit to stand trial (as they did for former president Soeharto) despite media images of Bond enjoying himself in a variety of social settings. His contrasting performances, at death's door one minute, playboy the next, would have earned a Hollywood Oscar.

Bond was eventually jailed, but the punishment hardly fitted the crime. He was released, on appeal to Australia's highest court, not because he was innocent but because of a legal technicality to do with State-Commonwealth jurisdiction.

Having exploited and defied the law for years, Bond and his associates assumed the high moral ground and insisted on their legal rights. No consideration was given to their shareholders' rights.

The Perth-based Bond now lives in England where he is in partnership with another corporate criminal. They reportedly lend money to desperate people at exorbitant interest rates.

Is Hutomo "Tommy" Mandala Putra any different? Interestingly, he has been a frequent visitor to Perth and has business interests here.

During the 1980s, in Australia and in other developed countries, business activity increased in size, scope and complexity. The evolution in corporate law did not keep pace with the revolution in commercial activity.

In Australia's case, there was not the political will to show leadership or to take decisive legislative action. Corporate watchdogs were not given either the tools or the resources to tackle the seams, schemes and frauds that mushroomed exponentially. We are still paying the price for that dereliction of legislative and legal responsibility.

The media, like the politicians, were part of the problem. The corporate moguls also owned the newspapers and the television stations. Bond had controlling interests in both. Journalists who valued their jobs kept quiet -- and enjoyed the continuous round of social events and gravy trains on which they were welcome passengers. Self-censorship -- the story one chooses not to write for fear of the consequences -- is as insidious to a democracy as is interference to an editorial.

What is happening in Indonesia indicates a replication of corporate events in Australia -- a lack of political will by both the executive and the legislature, an inadequate corporate framework with skilled personnel, a lack of resources and tenacity to tackle corporate fraud, an obstructive legal profession, a compliant accounting profession, and a complacent belief by those in high places that the rule of law applies only to others.

A key difference is that Australia is fortunate in not having a tainted judicial system.

A 30-year Soeharto legacy will not be erased overnight -- and one should acknowledge that there are some positive aspects to that legacy. But unless there is a determined legislative attempt to address corporate reform, and for the legal and accounting professions to develop and implement a realistic code of ethics, people like Tommy Soeharto will continue to make Indonesian authorities a laughing stock in the international community.

And further, Indonesia's young people who risked so much to precipitate change, will lose their optimistic energy and will become as cynical as were their parents under the Soeharto regime.

The writer is a semiretired academic with particular interest in Indonesia.