Michael Richardson and Philip Segal, Singapore – As official Indonesian investigators prepare to question former President Suharto for the first time this week about his wealth, experts are cautioning that any criminal wrongdoing will be hard to prove and that the tracing and recovery of money and assets will be equally difficult, especially if they are outside Indonesia.
Weaknesses and loopholes in the country's legal system and the fact that Mr. Suharto in effect ruled by decree for much of his 32 years in power – with a compliant legislature to rubber-stamp his actions – mean that all his actions are likely to be technically legal, lawyers and other specialists say.
"Before international accountants and investigators can do their work, they need clear proof that laws were broken," said Jeffrey Winters, a political scientist at Northwestern University in Chicago and a specialist on Indonesia. "No wonder Suharto, his family members, and other cronies have the confidence to declare that they have done nothing wrong as they enriched themselves."
Even though they amassed fortunes worth billions of dollars, he said, "The sad truth is that Indonesian laws might be so weak that legally speaking, their claims of innocence could be true."
In proclaiming her father's innocence, the eldest daughter of Mr. Suharto was quoted as saying in the Indonesian daily newspaper Kompas on Saturday that as president he had always given an account of his actions at the end of each of his terms in office, as required by the constitution. "So if he is to be questioned, what aspect does the government plan to look at?" asked the daughter, Siti Hardiyanti Rukmana.
Like Mr. Suharto's five other children, Mrs. Rukmana used her connections to the government to develop her business interests during Mr. Suharto's rule. So did many others in Indonesia's elite circle of power, patronage and influence, including high-ranking civilian and military officials who are still in the administration and armed forces. Mrs. Rukmana heads the Citra Marga conglomerate, which controls toll roads in Indonesia and several other Asian countries.
Analysts say that the wealth of Mr. Suharto's family runs into billions of dollars. Some estimates go as high as $40 billion, approaching the amount that the International Monetary Fund, drawing on loans from foreign governments and financial institutions, is pumping into the world's fourth-most-populous country to try to keep its economy from collapsing. Critics say that as president, Mr. Suharto issued at least 57 decrees and regulations favoring the businesses of his children, grandchildren and friends.
Public pressure on the government of President B.J. Habibie to bring Mr. Suharto, his family and business associates to account has been growing since his resignation on May 21 amid mass protests against his rule and an explosion of rioting in Jakarta that left almost 1,200 dead.
But some Indonesian and foreign critics express concern that the investigation could turn out to be little more than a whitewash to clear the former president, his family and associates of wrongdoing so that other officials will not be subject to investigation on similar grounds.
The investigation into the Suharto family's wealth is being led by Attorney General Muhammad Ghalib, who said this month that he believed Mr. Suharto's recent denial on television that he had any money hidden abroad. "Suharto is a former president, so he would not lie," Mr. Ghalib said.
Indonesian critics said that if the government was serious, it should immediately set up an independent commission of inquiry on corruption with the power to investigate wrongdoing by all officials from the president down – something that several associates of Mr. Habibie have recently promised will happen.
Yet critics remain skeptical because most members of the current cabinet served under Mr. Suharto. Mr. Habibie was his vice president and protigi before he took over as president in May. "The whole government is one handpicked by Suharto, so there is not much credibility in its political will to really go to the roots of the matter here," said Wimar Witoelar, a prominent Indonesian commentator.
Mr. Suharto has kept a low profile since his downfall. But as demands by students and other protesters for an investigation into the wealth of the Suharto clan intensified, he made a rare appearance on Sept. 6 at a television station partly owned by Mrs. Rukmana.
The former president said that "I don't have one cent of savings abroad, don't have accounts at foreign banks, don't have deposits abroad, and don't even have any shares in foreign firms, much less hundreds of billions of dollars."
The Jakarta Post responded by saying that investigators should compare Mr. Suharto's current assets against those he owned before he took officeand ask him to explain how he acquired them. "In the public's mind, the case against the Suharto clan is clear enough, given the past display of opulence indulged in by the first family," the newspaper added.
Most analysts agree that the sprawling business empires in Indonesia linked to Mr. Suharto's relatives, along with more than 100 shadowy "charitable foundations" connected to the former president, are still worth at least several billion dollars even though they were hit hard by the recession and the sharp fall in the value of the rupiah, Indonesian's currency.
An official Indonesian audit of charitable foundations headed by the former president is already under way. The government says preliminary findings show that there may have been some irregularities at the foundations, which are free of tax under Indonesia law and are not normally subject to outside audit.
Numerous state concerns have canceled contracts with companies linked to the former first family. Many of Mr. Suharto's children have resigned from executive positions but continue to retain large holdings in their companies.
Roderick Brazier, director of publications at the Castle Group, a Jakarta-based business consultancy that recently published a study of the Suharto family's wealth, said that the former president's children were likely to have assets worth $4 billion to $5 billion, with the foundations adding $2 billion
Some analysts believe that the Suharto family may have much more than this hidden in overseas bank accounts. David Hale, chief economist, based in Chicago, for Zurich Insurance, a Swiss group, told Barron's magazine he estimated that $8 billion had been moved from Indonesia to Austria on Mr. Suharto's instructions before his fall.
But at the annual meeting last week in Kuala Lumpur of Transparency International, the global organization founded to fight corruption, experts on cross-border asset recovery said that it could be very tough to recover any money controlled by Mr. Suharto. Overall, "the record of recovery is appalling," said David Chaikin, an Australian lawyer working to salvage some of the billions of dollars thought to have been sent out of the Philippines by the late dictator Ferdinand Marcos.
Of those billions reportedly taken from the Philippines, Mr. Chaikin ruefully noted, just $570 million had been identified and returned even though Mr. Marcos fled his country 12 years ago.
Experts said it could be even tougher to recover any money controlled by Mr. Suharto. For example, Switzerland and many other jurisdictions will not surrender funds unless it can be proven there that the funds deposited were the proceeds of crime. In the case of Indonesia, experts said, Mr. Suharto wielded such power that it is likely that all of his money-making activity during his time in office folowed the letter of Indonesian law.
Experts stressed that hunting down overseas assets through the use of documents and bank transfer records alone is all but impossible because real ownership can be masked by nominees. Any successful recovery at some point involves a tip from an insider, who gives investigators a clue to where they should look.
"You need to have someone to open the cupboard," said Jeremy Carver, an asset recovery attorney with the law firm of Clifford Chance in London. Even with a tipoff, however, recovery of assets was still painstaking and expensive, he said.
An additional problem is that a substantial chunk of the Suharto family fortune inside Indonesia was tied up in publicly listed companies officially controlled by some of the Suharto children. Many of these firms are reported to be heavily in debt to local and foreign banks and to be worth much less than they were a year ago, before the start of the financial crisis. It caused the Indonesian currency to lose more than 60 percent of its value against the dollar.