National car Soeharto's mistake

On Dec. 9, 1998 Soeharto, former president of the Republic of Indonesia, was questioned by the investigators from the Attorney General's Office regarding, among other things, the national car program. To make the matter clear, allow me to reveal the following:

a. Two policies were implemented by the former president regarding the national (Timor) car issue.

The first was Presidential Decree No. 42/1996, which regulated the technical policy allowing the importing of sedans from South Korea. The concept was devised by former minister of industry and trade Tunky Ariwibowo.

The second was Presidential Instruction No. 2/1996, which instructed the minister of finance to grant PT Timor Putra Nasional (TPN) exemption from the import duty and the sales tax on luxury goods on the import of sedans from South Korea. The concept was devised by former minister of finance Mar'ie Muhammad.

b. In Presidential Instruction No. 2/1996 it is stated that the tax debts arising as a result of the importing of sedans from South Korea by TPN will be borne by the state. This means that the state is extending a tax subsidy to TPN, obviously resulting in the state incurring losses.

c. Based on Article 23 of the 1945 Constitution, every year a draft budget of revenue and expenditure must be submitted by the government to the House of Representatives (DPR). All the state's revenue and expenditure must be listed in this draft budget and the draft budget must be ratified by the DPR. All subsidies should be included as spending (expenditure), for example the fuel subsidy, the fertilizer subsidy and the subsidy for regional autonomy.

d. In reality the granting of a tax subsidy to TPN on the basis of Presidential Instruction No. 2/1996 has never been set forth in the State Budget or in the supplementary State Budget ratified by the House.

e. So the policy as stipulated in Presidential Instruction No. 2/1996 violated Article 23 of the 1945 Constitution, with respect to both sub-article (1) because the tax subsidy was not included in the State Budget and sub-article (2), because the tax law was violated (There is no tax-free facility whatsoever in the prevailing tax law).

f. So these presidential policies profited only TPN, 99 percent of whose shares are controlled by Hutomo Mandala Putra, former president Soeharto's youngest son. In this respect the element of a criminal act of corruption based on Law No. 3/1971, namely "violating the law, inflicting losses on the state and benefiting oneself or another party" is conclusive. Obviously, there was corruption, collusion and nepotism.

It is up to the attorney general to draw his own conclusion. Also it is up to him whether or not to prosecute former president Soeharto on the basis of Law No. 3/1971.

Finally Mar'ie Muhammad, former minister of finance, must be summoned as a witness.

SUHARSONO HADIKUSUMO

Jakarta