Charles R. Smith
Thursday, Oct. 17, 2002

CIA Refuses to Release Documents on Corrupt Deals

The CIA recently responded to a Freedom of Information request on former Indonesian dictator Suharto. The fragile relations with Indonesia following the fall of Suharto have left the U.S. intelligence agency with few contacts inside the key Pacific island nation.

According to the CIA, the agency can "neither confirm nor deny the existence or non existence" of records concerning known corruption inside the regime of the former dictator.

"Unless officially acknowledged, such information would be classified for reasons of national security," wrote Karthryn Dyer, the CIA Coordinator for Information and Privacy, in an Oct. 1, 2002, FOIA reply letter.

Despite the official denial, the Central Intelligence Agency provided convicted Chinagate figure John Huang with detailed information on corrupt trade deals with Indonesia. In an apparent breach of U.S. national security, the documents found in Huang's files included the names and phone numbers of CIA agents.

CIA Agents Named in Huang Files

The original documents that identified the CIA agents were heavily blacked out and marked as being withheld for "national security" reasons. However, the Clinton administration officials accidentally included a second un-blacked-out copy, revealing the CIA contacts with Huang.

John Huang was born in China. He is a U.S. citizen, raised in Taiwan, and a former executive of the Lippo Group in Indonesia. He started out with the Worthen Bank in the United States, in Little Rock, Ark., and became a friend of the president of the United States.

Mr. Huang met with the President and others at the White House 10 times between June 21 and June 27, 1994, and, right after that, Mr. Webb Hubbell, who was about to be indicted by a Federal grand jury, received $100,000 from the Lippo Group.

Shortly after this money was given to Mr. Hubbell, Mr. Huang got a job at the Commerce Department as Assistant Secretary. Huang's job at the Commerce Department was a very influential position because he had a hand in determining technology transfers that went to Communist China and exclusive trade deals with Indonesia's corrupt dictatorship. It is known that Huang met 37 times with the CIA during his tenure at the Commerce Department.

John Huang pleaded guilty in 1999 to Federal charges of making illegal political contributions to the Clinton/Gore campaign. Huang also cited his Fifth Amendment rights over 2,000 times when asked if he was acting as an agent for the Chinese Army. In September 2002, the Federal Election Commission fined John Huang $95,000 for illegal contributions to the Clinton/Gore 1996 re-election campaign. In addition, the FEC also fined the DNC $243,000 for "knowingly and willingly" violating federal law by accepting money from Communist China.

The documents from the U.S. Commerce Department show that in 1994 agents from the Central Intelligence Agency met with John Huang and representatives from the U.S. Export-Import Bank and the Overseas Private Investment Corporation.

Indonesian First Family Involvement

According to the Commerce Department documents, CIA agents Bob Beamer, Chris Crosby, Lia Fidas and Nancy Goldcamp attended an August 1994 "TPCC" or "Trade Policy Coordinating Committee" meeting with Huang on Indonesian. The subject of the meeting was U.S. government financed trade deals that contained "first family involvement" or payments to relatives of then-Indonesian dictator Suharto.

The 1994 meeting between the CIA and Huang included detailed information on a $2.6 billion U.S.-sponsored electric power plant for Indonesia. A 1994 Commerce Department report found in Huang's files noted that the Indonesian "Paiton" power plant had encountered difficulties with financing because the "Asian Development Bank (ADB)" knew it contained money for a Suharto family member.

"ADB had raised concern about first family involvement during its consideration of the $50 million financial portion," states the Paiton Project document found in Huang's files.

"Ambassador Barry stated that the project is facing two problems (i) the ADB financing may cave in and (ii) EXIM financing. Regarding ADB, technical questions have been satisfied, but ADB is skiddish about involvement of Indonesia's first family [a minority shareholder is married to Pres. Suharto's daughter]."

In 1994, Edison Mission Energy, a subsidiary of Southern California Edison, landed a trade trip with Ron Brown to Indonesia. As a result of that trip, Edison also landed a contract to build the Paiton I coal fired power plant. Paiton I was billed as the first "private" electric plant in Indonesia.

However, such "private" ownership in Indonesia equated into owned and operated by the Suharto "First Family." The documents show that Edison officials were aware that a $50 million payment was destined for Suharto's daughter, hidden inside the power plant contract.

Southern California Edison

Federal Election Commission records show that Southern California Edison CEO John Bryson donated money to the Clinton/Gore campaign and contributed money to President Clinton's legal defense fund. In 1994, Bryson also wrote a personal letter to Commerce Secretary Ron Brown, pressing for quick approval of a $50 million U.S. government-backed loan to Suharto's daughter, which would never be paid back.

"Dear Ron," wrote John Bryson, then Chairman of Southern California Edison. "I am writing to request your support of the application of the Paiton Private Power Project in Indonesia for funding by the Asian Development Bank (ADB)."

"We have applied to the ADB for $50 million of funding as part of a $1.9 billion financing package. The bulk of the funds will come from a group of commercial banks, the U. S. Export Import Bank and Japan Ex-Im," noted Edison CEO Bryson.

"I would greatly appreciate it if you would indicate your support for ADB funding of this project. With that in mind, enclosed is a draft letter to Ambassador Linda Tsao Yang, U.S. Executive. Director of ADB, for your consideration."

The partners in the Paiton I consortium include Edison Mission Energy, Mitsui & Co., Ltd. of Japan, General Electric Capital Corporation, and P.T. Batu Hitam Perkasa. Just by coincidence, PT Batu was owned by Indonesian dictator Suharto's youngest daughter, Titek Prabowo and her brother-in-law, Hashim Djojohadikusumo.

In addition, 1994 documents provided by the Offshore Private Investment Corporation (OPIC) noted that Suharto's daughter Prabowo and her brother-in-law, Hashim Djojohadikusumo, were given a total "2.5%" ownership in the U.S. sponsored power project, through their local company BHP.

"ADB is still considering this, b/c of very minimal involvement of Indo ruling family in the Mission project. ... ADB's delay revolves around concern for projects in Indonesia involving the first family ... 75% ownership of the Mission project by daughter of Indo pres."

Clean Coal Monopoly

The real key to the Paiton power project was the ultra-clean coal - then mined from only two places on earth, Indonesia and Utah. Toward that end, brother-in-law Hashim received an exclusive, no bid, no-cut contract to supply the clean coal for the Paiton power plant from a mine that he owns. Of course, Hashim is also an ex-minister of Mines under former President Suharto.

According to State Department cables, Hashim's coal price exceeded the price of the electricity produced at the Paiton power plant. One cable characterized Hashim's no-cut contract as the "Achilles heel" driving the power plant into debt with each kilowatt produced. Of course, no profits from Paiton also meant zero dividends. Suharto's daughter and Hashim never had to pay back the instant $50 million loan because Paiton was never intended to succeed.

Hashim's financial backer in his coal mining business is Moctar Riady and the Lippo Group. In 1996 President Clinton issued an executive order creating the 1.7 million-acre Grand Staircase-Escalante National Monument in Utah - making the only other known "low sulfur" deposit off limits for commercial mining. Thus, Hashim and Lippo obtained control of the world's only low sulfur coal mine.

Indonesia's Lippo group is a consortium part owned by Indonesian billionaire Moctar Riady and a front company for Chinese military intelligence, CRE or China Resource Enterprises. CRE is the reason why the CIA was interested in the Suharto "first family" involvement during the 1994 meeting with John Huang. The intelligence agency was not sponsoring the payments to Suharto's daughter. The CIA attended the meeting with John Huang to maintain a watch on the Chinese Army intelligence unit CRE operating out of the Lippo group.

Corrupt Deal Falls Apart

In 1999, an Indonesian government audit revealed that the Paiton power plant has accumulated losses of over $280 million. PLN, the Indonesian power company, estimated that it had lost over $18 billion in total to Suharto corruption inside various power plant contracts. "It happened because there were so many people that 'used' Suharto's power when he was still in charge," stated former President/Director of PLN, Adhi Satriya.

"The Paiton project by itself is the largest loss for PLN.

"Corruption occurred in all parts of the project," said Adhi.

The current Indonesian government obtained the U.S. government documents found in John Huang's files, along with nearly 300 pages of other Clinton administration materials. In 1999, PLN acquired documents from this reporter that showed Clinton administration officials were aware of "corruption, collusion and nepotism" inside the electric power trade deals made with Suharto.

The Indonesian government used these documents to win a lawsuit against the Clinton administration and Edison International, charging that U.S. government and Edison officials knew the Paiton power plant contract was "corrupt from the beginning." In December 1999, an Indonesian court ruled that the entire $2.6 billion dollar Paiton power plant contract was illegal.

Today the Paiton power plant is silent and bankrupt and a living testimony to the corruption of Bill Clinton. The legacy that Bill Clinton left America is a long string of corrupt deals and soured U.S. relations with Indonesia.

Despite the official denial by the CIA, the threats to national security are part of open testimony. The addition of bribery and kickbacks with foreign officials are available, written by the U.S. Commerce Department.

Proof that crime knows no borders, no party affiliation and no limits.

Read more on this subject in related Hot Topics:

Clinton Scandals

Editor's note:
Trooper Patterson`s tapes: "More Than Sex: Secrets of Bill & Hillary Revealed!"