Joseph Kahn – Almost immediately after becoming president of Indonesia, B.J. Habibie pledged to create "a clean government, free from corruption, collusion, and nepotism." But one of the biggest threats to his rule may be growing concern that he and his family, following the model of former President Suharto, used public office to amass a private fortune.
In the nearly two weeks since he replaced Suharto, Indonesian economists and political activists have begun to document the sprawling business holdings of Habibie's children and close relatives.
The Habibie family does not have anything approaching the wealth of the Suharto clan. But Indonesian analysts say its worth might reach $80 million. That, however, does not factor in the wealth-destroying effects of the country's economic crash.
"You can say that in this respect he is an A student of Suharto," says Rizal Ramli, an Indonesian economist who has collected data on the business holdings of top government officials. "We no longer have Suharto but we still have cronyism."
In an interview on Tuesday with The New York Times, Habibie defended his own wealth and that of his family members, saying nepotism had not played a part in their apparent success. He acknowledged that some of his relatives have grown rich, but said they did so because of their strong education and work habits.
Many of his brothers, sisters and children do business with government agencies, Habibie said. But he insisted that they do not get special treatment. And he appeared to reject calls to force his family to give up government contracts or dissolve business partnerships that have come under scrutiny.
"Many people become rich if you work hard and you are educated," Habibie said. "And now they have to stop because I am the president for two weeks?"
In his long political career, Habibie supervised some of Indonesia's highest-profile development projects. His purview included the state aircraft maker, a natural gas project, the Batam island development zone, and the state technology agency.
Potential conflicts of interest between the offices Habibie has held and his family's holdings are not hard to spot. Habibie's two sons have business ties to the aircraft company, while one has contracts connected with the natural gas project. Two of Habibie's brothers and a brother-in-law have close ties to Batam island development project. His sister plays a key role in the state technology agency, while her husband has worked as a contractor there, according to officials at each company.
The best known Habibie-linked company is controlled by his youngest brother, Timmy. Timsco Holdings has several score subsidiaries operating in many different businesses, some of them dependent on government contracts or licenses.
Several Indonesian economists compare Timmy Habibie's operating style to that of Bambang Trihadmodjo, Suharto's middle son, which is characterized more by personal contacts than any particular expertise.
Habibie's long involvement in the Batam island project has raised the most conspicuous conflicts. Though Suharto appointed Habibie to supervise the conversion of Batam, located near Singapore, into a manufacturing center and export zone, Habibie has governed it like a personal fiefdom, says investors and employees on Batam who spoke on condition of anonymity.
Habibie long worked hand-in-hand with his brother-in-law, Sudarsono Darmosuwito, now retired, the zone's chief executive. When Habibie took the office of vice president earlier this year, he appointed a younger brother, Effendi (Fanny) Habibie, to succeed him as chairman of the Batam Island Development Authority, the island's main governing body. Fanny Habibie told Indonesian reporters last month that he will step down from the chairmanship. But that only begins to address the Habibie family interests there. Sudarsono, for example, controls two companies that have benefited from exclusive Batam licenses.
P.T. Citra Lingkunan Lestari has done environmental impact surveys on behalf of investors wishing to set up factories there. P.T. Indori Mandiri Sakti has had exclusive rights to construct and manage Batam's two major harbors.
Meanwhile, Timmy Habibie, Bambang, and Habibie's two sons, Ilham and Thareq, are partners in the main industrial park on Batam, called Batamindo Industrial Park.
Foreign businessmen familiar with the Batam project said that virtually anyone who sought to set up export operations there was encouraged to do so within the family-controlled park.