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)