Timber tycoons piling war chests to 'block probes'

Timber tycoons piling war chests to 'block probes'

JAKARTA (JP): Minister of Forestry and Plantations Nur Mahmudi
Ismail has warned that several major companies under
investigation for alleged involvement in massive fraud in the
forestry sector were trying to block the legal process.

The minister said the conglomerates were reportedly trying to
raise huge war chests to finance lobbying in order to prevent the
Attorney General's Office from investigating their cases.

"They have raised billions of dollars to support their efforts
to stave off their prosecution," he said after a Cabinet meeting
at Bina Graha presidential office on Wednesday.

He said business groups also tried to influence his
subordinates so that the latter would not provide the information
and data needed by prosecutors from the Attorney General's Office
in the investigation process.

Mahmudi refused to name the groups.

"I do not want to make accusations. It still needs to be
proved. I raised it merely so those (involved in the
investigation) are aware and not easily persuaded," he said when
asked if he as referring to timber magnate and close friend of
former president Soeharto, Mohamad "Bob" Hasan.

Hasan along with several other business leaders such as
Soeharto's eldest daughter Siti "Tutut" Hardijanti Rukmana,
Soeharto's half brother Probosutedjo and businessmen Prajogo
Pangestu and Ibrahim Risjad, have been reported to the Attorney
General's Office by the forestry ministry on suspicion of
involvement in corruption and misuse of reforestation funds
totaling Rp 784 billion (US$107 million).

The ministry's report said Bob allegedly misused Rp 207.81
billion in reforestation funds he received for his industrial
forest estate PT Surya Hutani Jaya.

Hasan was named a suspect and detained last week by the
Attorney General's Office for allegedly manipulating $87 million
in reforestation funds to finance his firm PT Mapindo Parama's
forest aerial mapping project, a contract of which was awarded to
the company without a tender.

Forest concession holders were allowed to borrow reforestation
funds to develop industrial forests, but many diverted the funds
for other business purposes.

According to the ministry's report, Tutut and Prajogo, who
held shares in industrial forest estate developer PT Musi Hutan
Persada in South Sumatra, allegedly misused about Rp 346.87
billion of reforestation funds by manipulating details on the
firm's 193,500 hectares in order to obtain more reforestation
funds.

The report said Probosutedjo allegedly manipulated Rp 144.40
billion in reforestation funds he received through his industrial
forest owner PT Menara Hutan Buana, which controls about 268,885
hectares in South Kalimantan.

Ibrahim allegedly diverted Rp 85.36 billion assigned by the
government to his industrial forest developer PT Aceh Nusa
Indrapuri to purchase space at the Menara Batavia building,
according to the report.

Mahmudi acknowledged that some of his officials were involved
in collusion to help major forest concession holders obtain
forestry contracts.

The ministry's secretary-general, Suripto, said on Wednesday
at least 12 senior officials at the ministry were involved in
Hasan's suspected aerial mapping project scam. (prb/cst)