Senior U.S. official says no trade favors for RI

Senior U.S. official says no trade favors for RI

WASHINGTON (Reuter): The Clinton administration took issue on
Wednesday with a newspaper report raising questions about large
donations to the Democratic Party by a wealthy Indonesian family
and U.S. trade policy toward Jakarta.

An investigative report by the Los Angeles Times on Wednesday
said the Clinton White House in some cases had rejected
recommendations or stopped investigations by lower-level U.S.
officials regarding relations with Indonesia.

A senior administration official said Indonesia has not
received favorable treatment.

"Contrary to whatever the innuendo is, we moved very
aggressively toward Indonesia and have had a very tough policy
toward them in many areas," a senior official told Reuters.

Commerce Secretary Mickey Kantor, previously the U.S. trade
representative, denied in the Los Angeles Times report that there
had been any connection between trade policy toward Indonesia and
the donations from James Riady, scion of a wealthy Indonesian
family.

The newspaper listed several beneficial steps the Clinton
administration took toward Indonesia.

The paper said that at one point U.S. officials were
investigating whether to cut off Indonesia's trade privileges
because of the country's labor policies. It said that in February
1994 Kantor suddenly announced the suspension of the process,
allowing Indonesia to keep the privileges worth more than $600
million to Indonesian companies.

A senior administration official told Reuters the year-long
investigation was suspended after President Soeharto's government
announced a series of actions to address U.S. concerns.

"This was a major departure of where they had been. We
announced suspension but not termination of the review," said the
official who asked not to be identified. Further action was taken
later that year, the official said.

"Obviously given the progress made, we didn't suspend GSP,"
the generalized system of preference, he said.

The program eliminates import tariffs on some goods from
developing countries. Duty-free imports from Indonesia under the
program were worth about $643 million, according the Los Angeles
Times report.

The newspaper also said that in one instance the White House
had interceded after Riady came to Washington to arrange meetings
between a senior Soeharto aide and top-level U.S. officials.

Riady, his family and executives of their companies had
contributed $475,000 to the Democratic Party and its candidates
since 1991, the newspaper said. Riady attended at least two
meetings with U.S. officials at which Indonesia's trade benefits
were discussed, it said.

Clinton administration officials have asserted that the
contributions by the Riady family were legal and had not
influenced U.S. government policy toward Indonesia. "There was no
connection between James Riady and U.S. trade policy in
Indonesia," Kantor told the newspaper. "Absolutely none."

The Riadys own the Indonesia-based Lippo Group and once owned
a bank in Clinton's hometown of Little Rock, Arkansas.

The Los Angeles Times said that in addition to the Riadys'
money, $425,000 was contributed to the Democratic National
Committee by an immigrant Indonesian family.