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Militia funding traced to government

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Dateline (SBS Television) - February 16, 2000

Mark Davis – In a forest West of Dili, Filomena Amaral is about to learn the details of how her husband, a village schoolteacher and church leader, was tortured and killed.

Filomena: "Why was he killed? Was he a thief? Did he steal people's things or did he kill people like they killed him? No he died without fault."

Photographs of her husbands shattered bones are needed as evidence in the event that his killers are ever brought to trial. The forensic team will piece together the final moments of her husband's life ... but the real evidence concerning his death isn't buried here; It's buried in filing cabinets, government memos and bank records . Buried in the minds of elegant men in suits who incited approved of and paid for this execution and who, it would appear, are going to get away with murder...

Alatas: "I don't know what you are talking about, because you are talking about things as if we are in the business of funding the militias."

Mark: "Yes, exactly."

Alatas: "Exactly. Which is not. Which is not. How can I talk about things which we did not do?"

A suspected militiamen has been found hiding in a house in Dili. As the crowd grows it is probably the suspects good fortune that he is arrested but given the hundreds, possibly thousands of people that were killed here, there has been remarkably few arrests such as this and all of them have been relatively minor figures.

There is now little doubt that if justice were to be served it would be Indonesian Generals being dragged from their houses today but even their involvement only tells half of the real story.

The handiwork of the Indonesian Army is fairly plain to see and their involvement has been the focus of most inquiries to date. But were Indonesia's generals acting as rogue elements in East Timor or under orders? Were the war criminals in the government itself.

So far, Indonesian intelligence and Military figures have all stuck together in recounting their version of events in East Timor, but they never dreamt that this man would turn and give evidence against them.

Thomas Gonsalves was Indonesia's closest friend in East Timor for 24 years. Gonsalves was the leader of the pro-Indonesian forces that led the invasion of East Timor at Balibo in 1975. He is a veteran pro-indonesian soldier, intelligence figure and politician. When the pro-indonesian militia and intelligence groups were reactivated in 1998, Thomas accepted the army's invitation to take a leadership role. He was a natural choice.

Thomas: "Oh, yes, many times since last year. I attended many meetings. Almost every week we had meetings."

Mark: "That was with Suratman?"

At two preliminary inquiries into Human rights abuses in East Timor Thomas's evidence has proved devastating to the Indonesian army but in this his first television interview he implicates not just generals but remarkably Senior ministers of the Indonesian government.

Thomas: "I met with four of them. Generals Adam Damiri, Kiki Shyanakri, Amirud and the Minister for Transmigration, Hendro Priyono. The point they made was if we continued to defend the white and red flag, they were ready to provide any funds, and all sorts of guns and all the troops here could help us."

According to Thomas and others Hendro Priyono's enthusiasm to create and incite a militia force was so extreme that he even offered to don camouflage and fire the guns himself, but in the end he just provided the money for others to do it.

Thomas: "We went to his office. That's when he told Governor Abilio's brother, Chiquito, the chief of the Transmigration Department in Timor, to devote the whole departmental budget for the use of the militias."

The implications of a government departments directly diverting money to militias are enormous – it exposes ministers to possible criminal prosecution and the State to massive compensation claims.

And as I was to learn Transmigration was by no means the only Department to contribute funds and all of those contributions were recorded in some way by the bureaucracy

All the government buildings and most of the documents they contained have been destroyed by soldiers but the people who wrote those documents, copied them and filed them are still in Dili. but to date there's been little interest in finding the local bureaucrats who administered the flow of money from the government to the militias.

Xanana Gusmao and his CNRT leadership have been particularly singular in who they blame for the destruction of their country. The only accusations they make are against the Indonesian army. Xanana has said little that would implicate any Indonesian government figures with whom he is trying to reestablish relation.

Sebastion: "We need to continue gathering evidence of the violence in East Timor. Whereas you, the President and CNRT are promoting reconciliation amongst the East Timorese."

Like many young people in East Timor, former student leader Sebastion Gutteres believes that the pursuit of reconciliation, of fence mending with the Indonesian government is clouding the search for the truth.

Sebastion: "there is only interest in providing eye witness for the killings. But for searching for deeper evidence, documents, how they operated, no one is doing this."

Mark: "and who was paying them."

Sebastion: "yeah, who gave the orders, nothing so far has happened on this."

Both Sebastion and former Independence activist, Jose Apparitio had friends and relatives killed in the violence last year. They're been looking for answers of their own and they agree to help me follow the paper and money trail across Dili.

Sebastion: "these guys are civil servants, one from finance the other police" or "there going to get some documents".

The Department of Finance in Dili was the clearing house for all government funds that entered East Timor...

This building was destroyed and looted by Indonesian soldiers but by a stroke of luck the upper floor didn't catch fire. As head of the budget section in the Department of Finance Jao Da Silva had intimate access to all departments in the public service. His job was to oversee and monitor where government money was going and from this room it was going to the militias.

Jao: "With regard to the militia, my boss put me in charge of the money. Because they used to go to the Governor who'd have our boss tell us to get the money quickly for their activities."

Jao confirms money from the transmigration department was given to militia groups. But they weren't the only department to contribute for the "Socialisation of Autonomy" – a term which had become open code in the public service for propaganda and militia activities to ensure the victory of the pro Indonesian autonomy groups at the upcoming referendum.

Jao: "All departments must donate. Transmigration, Agriculture, Forestry, all must give for the "socialisation of autonomy."

The intimate connections between ministries and the militias began in Jakarta in February 1999 at a dinner at the home of the Minister for Information, Yunus Yosfiah. Thomas Gonsalves was there and by coincidence so was I.

Mark in English: "Was that in Feb? I was there, standing outside!"

Thomas: "He wouldn't want to see journalists. Yunus said that journalists should go to his office." At the time of the dinner in February in February 99, the militias were still a very small and largely unknown group. A handful of individuals had come to prominence after admitting to the murder and mutilation of people in remote villages.

In February I was following one of these killers through Jakarta, expecting him to be arrested, not to visit the home of a minister. I watched as the cream of the then tiny militia movement walked into Yunus Yosfiah's home.

Mark: "So Yunus Yosfia said he would provide you with guns if you needed them?"

Thomas: "Yes."

Yunus Yosfiah's connection with guns and East Timor go back some time. In 1975 he was in charge of a front-line Indonesian unit involved in the initial invasion of East Timor. And it has been alleged that he was the officer who ordered the execution of five western journalists in the town of Balibo.

According to Thomas, Yosfiah believed the army in East Timor had become too soft under the command of Colonel Tono Suratman, an extraordinary proposition given that dozens of people had been recently shot and mutilated by Suratman's soldiers and militias. Yosfiah offered to make introductions so the militias could obtain direct government support.

Thomas: "In his conversation on preparing the militia he even called Tono Suratman a coward because he was taking too long to act. We should act now because we're ready to support you with guns or anything else."

Within a fortnight of the dinner more than two million Australian dollars arrived from a source in Jakarta to launch the militias as a formal movement in every corner of East Timor. The money came through the militias newly formed political front the FPDK, or the Forum for Unity, Democracy and Justice. Forced recruitment began immediately. A bunch of obscure thugs now had the imprimatur of figures in Jakarta and the cash to back it. Thomas Gonsalves and his colleague Rui Lopez were asked to formally lead the new militia movement.

Rui Lopez was another figure with intimate connections with Indonesian military and intelligence. Although they remained in the network, Thomas and Rui declined to become the official leaders of the militia even though the money that was being offered was coming from and impeccable source.

Rui & Thomas: "What I know is that the first money given out went to the FPDK. FPDK was the first pro-autonomy organisation. It was set up by the army but the money came from the Foreign Affairs department from Mr Ali Alatas because it was Chico Lopes who lobbied for the money together with Domingos Coli."

Thomas: "17 Billion Rupiah provided by Ali Alatas for FPDK."

Rui: "Billions."

According to Thomas and Rui and another key witness the bagman for the Foreign Affairs money was Francisco Lopez da Cruz ... the Department's 'Special Envoy to East Timor' who arrived with a first installment of 9 billion Rupiah.

"Mark: "Was it your Department Sir?"

Alatas: "Our department was engaged in diplomacy, in diplomacy abroad, you know and negotiating with the UN."

Mark: "Was it your department that gave 9 Billion Rupiah to the FPDK, which was the main militia umbrella group?"

Alatas: "No, No, we are not, how do you call it, involved in internal things, you know."

Mark: "Cico Lopes Da Cruz – he is part of your department?"

Alatas: "He is, he was. Well, he is still perhaps, how do you call it, special envoy on East Timor, yes."

Mark: "Lopes da Cruz gave them 9 Billion rupiah. He works for your department he says it came with your authority."

Alatas: "Yes but that was not for militia. That was for general information perhaps."

Perhaps more than anyone else in East Timor, Rui Da Costa knows what the information campaigns of the FPDK and their militias entailed...

Rui: "Without any reason they killed two boys here"

As the militia network expanded across East Timor, Rui risked his own life to voluntarily investigate and document the deaths of 200 others. Rui's list contains 200 people who had ignored the political message of the FPDK and their militias.

And the distinguishing feature of the killings that occurred before the referendum was that nearly all them were mutilated as a gruesome warning to others. This was the most effective education campaign in the first half of 99.

"it says 'Assassinated by the barbarities of the monstrous militias.' "

Rui: "They cut his throat and cut out his tongue."

Mark: "They cut his tongue! Why?"

Rui: "I don't know why. This is the question."

Highly placed witnesses in Dili are prepared to testify that the Foreign Affairs money went directly to the FPDK and their militias. Ali Alatas maintains that his dept may have contributed to "socialisation teams" – quasi government bodies designed to explain the processes of the referendum to the population. Alatas

Alatas: "There was money of course for the efforts towards spreading of information, of information. We agreed there would be a socialisation period, we agreed with the UN that there would be a socialisation period."

This is a budget that has been found from one the 'socialisation teams.' Although it has made every attempt to be relatively discreet it's fairly clear how this money was spent. It includes wages and uniforms for 150 people, money for instructors and training Costs for the local Military Commander and Police Chief for their assistance in explaining the democratic processes. And grants to the BRTT, a senior pro-integration group with links to the militias, the FPDK, the forum for Unity Democracy and Justice and specifically by name the known militia group ABLAI an acronym of "I will fight to preserve integration". All of them doing there best to explain the electoral system.

As Ali Alatas began negotiating with the UN over the processes of the referendum, international attention was starting to focus on the growing terror campaign in East Timor. A direct connection with his department would have been terminal for Indonesia's bargaining position. The second installments promised to the FPDK was canceled.

Adelino Gutteres: "Alatas ordered it blocked because instead of funding socialisation the money had gone on the militia and buying guns. The militia had started killing people. As the situation deteriorated Ali Alatas ordered the next 9 billion stopped. "Don't give them the 9 billion." But militia activities had begun and now there was no money to pay them."

Adelino Gutteres worked for the head of the FPDK, Domingos Koli Soares who by March was having trouble paying his militiamen. But Domingo Koli Soares had excellent government contacts – he was also the Bupati or the Mayor of Dili.

Adelino: "The Bupati ordered me to get the money. He said 'whatever you have to do, just get it.'"

March was a difficult time to be seeking money from government departments. It was the end of the Indonesian financial year and they were all broke. To ease the cash crisis the army provided militia leader Eureka Gutteres with a suitcase of counterfeit bills. But they were clumsy reproductions, many with the same serial numbers and the banks, very politely, declined to accept them.

From his government office in Dili, the leader of the FPDK cooked up scheme with the Governor of East Timor and the co-operation of ministries in Jakarta that would permanently solve the militia's liquidity problems. A scheme to plunder development and welfare funds that had been established to help the poor. A scheme where militia murderers could be put on the books as charity workers. And best of all, of it would be largely paid for by International donors.

Jao has found one of the documents he was looking for. It is a memo from the Governor of East Timor to each of his district heads instructing them to use their development and welfare budgets for the "socialisation of autonomy". The kindest interpretation that could be given to this document is that it was an order to misappropriate funds for referendum propaganda.

But the Governor was not too coy to make specific reference to payments for militia and in practice this is exactly what it was for. "They're militia security guards. Then penggalangan, which means militia activities."

This document is the blueprint for how the militias would be funded from May until the final killing spree in September when the Indonesians lost the referendum. The scheme was delayed because the development and welfare money hadn't yet arrived from Jakarta but it soon would. Jao was told courtesy of the World Bank.

The World Bank, the IMF and the Asia Development Bank had all made huge contributions to the Indonesian budget but at the exact time of the militia's financial crisis in March and April, a World Bank loan was the pot of gold that the Indonesian government was waiting for.

Although the deal wasn't finalised the money was as good as in the bank for the bureaucracy in Dili. In fact a loan was taken out against it to keep the militia machine rolling. The Department of Political Affairs arranged the loan and Jao's department had to guarantee that they'd repay it out of the first development and welfare funds to arrive.

Jao: "Yes because they were waiting for this money to be able to start their activities. It was delayed. Activities such as the second attack on Santa Cruz, Quintal Kiik, Bemori, Becora, Comoro ... For instance, Jaqquim was killed in Becora. All of that was funded by this money."

As the bureaucracy made the necessary financial arrangements the militias were preparing themselves for their biggest bloodbath to date. A plan so chilling that the stakes were becoming too high for Thomas Gonsalves.

Thomas: "On March 26, the Governor told us that from May 1, throughout the territory, we were to liquidate all the CNRT members, down to their grandchildren. If the people sought help from priests, nuns or the bishop, these too should be killed. That's why I decided to leave."

After 24 years of being East Timor's most prominent integrationist Thomas Gonsalves had to begun to leak information to independence leader Xanana Gusmao. And as Thomas fled East Timor in April the mass executions began.

120 people were taking refuge in this house in Dili. They'd already had their own houses destroyed, they'd been stabbed and beaten, the women had been raped.

In April, a large group of militiamen were given drugs and money to come and attack them again. Dozens of refugees were shot and macheted as they tried to scramble away, at least 12 of them died here. Others were chased through the streets of Dili and their fate unknown.

In the same month 60 people were massacred in church at Liquica. And at least another 15 killed in other parts of East Timor. And those killers who weren't paid with the money that had been borrowed were paid with IOU's against the expected arrival of World Bank funds.

Adelino "They were on credit, on credit."

Mark: "They were on credit!"

Adelino: "They were out of control when they didn't get their money. They even came and threatened us, as well as Mateus Maia (FPDK) their own commander." And just as things were turning ugly the World Bank released the loan and the development and welfare money began to flow.

Ben Fisher: "Our major objective is to alleviate poverty, this is the major purpose of the world bank in both the long and short term All of the World Bank loans have something to do with that."

Ben Fisher is second in charge of the World Bank in Jakarta. In the early months of last year relations between the bank and the Indonesian government were tense. Sources inside the bank report that the bank discovered that development funds were being stolen and used for political purposes including specific examples in East Timor.

Because of proven corruption the World Bank put on hold a billion dollars worth of specific development funds that the Indonesian government was expecting to receive in May, but the government wasn't left empty handed. The World Bank advanced a general budget loan of 500 million US dollars to the government in May – the second such loan in 3 months. It now appears ironic that one of the major purposes of the loan was to assist the Indonesian government in its efforts to reduce corruption and increase the transparency of it public service.

Ben Fisher: "We were very pleased with the governments response at the time and we disbursed that loan."

The loan would "provide the cushion for a fiscal stimulus while protecting the poor and the vulnerable".

The World Bank was particularly impressed by the government's commitment to "restore growth, reduce poverty and shield the poor". In fact, it was now cashed up to kill them.

Jao: "This is the first 5 billion, issued on 14 May 1999."

Amongst the rubble, Joao has found some of the cheques that he was ordered to draw from the Provincial development budget and give directly to integration and militia groups.

Jao: "This money wasn't meant for militia activities, it was for aid. Aid. For example this one was for social welfare project."

This first cheque drawn from the development budget is for more than a million dollars. It is written directly to a government official, Radjakarina, who was able to cash the cheque or deposit directly to his personal account. Radjakarina, was the Governors secretary. He was also a Senior member of the BRTT, one of the most prominent pro integration groups, and he was broadly regarded as its defacto treasurer. The cheque specifically states that it is for the purposes of a Socialisation team.

Joao had to ensure that Radjakarina used part of this money to repay the blood debts from April, and the balance was for the use of integration groups and their militias

Mark: "So was any money used for development?"

Adelino: "No money was spent on development after we gave the 3 billion to the militia. There was nothing left to spend. No projects went ahead."

Adelino was in charge of planning and development for the district of Dili. There were 13 districts in East Timor, each of them receiving more than 3 billion rupiah for general development and welfare.

Mark: "So they turned your department into a bank for the militias?"

Adelino: "It was all for the militia. The whole 1999 budget was for the militia alone." The World Bank may not be responsible for frauds enacted without its knowledge. But remarkably the World Bank discovered this fraud in the first month that it began. A copy of the governors decree ordering the abuse of development and welfare funds landed in their lap.

Ben: "oh yeah, I think we've seen this yeah."

The World Bank became aware of the plan to steal the money for the militias just weeks after finalising their 500 million US 'anti corruption' loan. In the past 5 months they'd handed a total of almost a billion US dollars to the government.

"Mark: This must have been very disturbing to you.

A: Certainly

Mark: Well what was your specific reaction?

Alatas: "Well my specific reaction and the reaction of my colleagues in government is that we were very upset. We got told and we got to know about this and we stopped it immediately and we said no this is not to be ... In last May and June when we received these very serious allegations and we investigated them we felt that the response of the central government was as strong as possible."

Mark: "Which was to do nothing."

Alatas: "It wasn't to do nothing. The decrees were rescinded."

If Jakarta issued a piece of paper rescinding the decrees to steal development and welfare for the militias apparently only the World Bank took it seriously. The scam continued without so much as a blip with the Co-operation of a host of Indonesian ministries. And the cheques kept flowing

"This is the first payment. After that money was used, they asked for more. And this is the second payment, issued on the fourth of June..."

These cheques continue throughout May, June and July and there's more to be found. They should have been made out to other departments or businesses providing services to the government. They are all made out directly to individuals who were openly or covertly linked with the militias including the leader of the FPDK – the Bupati of Dili.

Some openly declare they are for "socialisation" others are supposedly welfare for the poor but in case Joao was told the money was needed for integration and militia groups and was told to ignore standard procedures.

"We have a very rigid administration in the Bupanas and so on. I doubt it. It's inconceivable that funds that are allocated for something can so easily be switched for something else. Impossible."

Ali Alatas is right – it would be impossible to conduct a barely disguised fraud such as this without the consent of Senior department officials and ministers.

Both Joao from the provincial government and Adelino at the district level maintain that communication with their ministries in Jakarta regarding this scam was constant as was the flow of money to the militias.

Adelino: "We prepared the papers and issued 600 million. That turned out not to be enough. Then we issued another 300 million. That wasn't enough. After we'd paid a total of 2.6 billion, they came back and forced us to pay more."

Mark: "You must have had concerns for the money you had given to Jakarta that it was being used through the development budget for the militia."

Alatas: "Sure"

Mark: "And you became aware of this in May?"

Alatas: "Absolutely. Mark we had very strong concerns that the development budget was being used to keep kids in school, to buy medicines, build roads."

Mark: "But it wasn't!"

Alatas: "Outside of East Timor..."

This fraud did not involve specific World Bank projects or staff and the World Bank weren't the only international donor. But the World Bank knew that the scheme had begun and they had a billion dollar stick to wield to ensure it finished.

Mark: "What I am suggesting is that did you take this seriously enough?"

Alatas: "Well that's for history to decide Should we penalise School children in Sulawesi because of what is happening in another part of Indonesia."

For a week Jose and I tracked down public servants from the development and welfare sections from Dili to small towns all of them had similar stories.

Maliana man: "The housing didn't go ahead. The road building didn't go ahead, nor the water supply for the people. So all of that was diverted to those various activities."

Benjamin Barreto was given a job as the Secretary of the Development Department in Maliana. But he was left in no doubt as to what his real job was, to fund the pro integration groups referendum and pay the militias blood money.

"For each person you killed, you got 3 million rupiah. That was the district military commander's plan. He received 800 million Rupiah for the militias. He used it for bounty payments. He used it for that."

As the referendum approached it became absolutely apparent that millions were being spent on the militias, thousands were on the payroll, transport and communications provided, tonnes of rice and oil given away to buy votes, leaders becoming rich.

It was been broadly assumed that it was the military pouring the money in but if you were familiar with the workings of the Indonesian government, if you'd seen the plan, you might have had pause for thought.

Alatas: "Our understanding was that those would be stopped and to the best of our knowledge it was stopped. The order was retracted."

And what wasn't apparent to the world bank would have been known or blatantly obvious to anyone in the government.

Mark: "Who did you imagine was paying them"

Alatas: "I don't know."

Mark: "Well you must have had some suspicions? Who did you imagine was paying them?"

Alatas: "Why should I have suspicions? We are a government."

Mark: "Because people are dying and you have made pledges to the International community."

Alatas: "People are dying and we were against it."

"All the documents were kept here. That's why they burnt it down. All the documents concerning money for the militia were issued from here."

By July of last year, virtually all of the resources of the Dili administration were at the disposal of the militias and there expenses were now running out of control. In just 6 months they'd spent probably 12 million dollars of development and welfare funds, 2 million from Foreign Affairs, the entire Transmigration budget for East Timor and contributions from other departments and the referendum was still more than a month away.

Adelino: "The militias came and kicked in the secretary's door, abusing and threatening everyone."

Even more creative accounting by the Indonesian bureaucracy was required.

"We held a meeting here with the departments of Public Works, Water Supply, Road and so on, to take 75% of their budgets for the militia and give 25% to the contractors."

The time had now come to dip into major projects and for a cut the construction contractors agreed to sign documents saying that ghost projects were complete and Indonesia won more brownie points with the international donor community for all of the roads, bridges, irrigation systems it was apparently building in East Timor. Everyone was a winner. The frenzy that followed the referendum in September was a logical conclusion to the madness that had gone before it.

A madness incited and paid for not just by the Military but by the Departments of Information, Transmigration, Foreign Affairs, Planning & Development, Forestry, Agriculture, Political Affairs and the Department of Finance.

The Indonesian government may yet be prepared to sacrifice what they are referring to as 'rogue elements' of the army, but if the rogue elements are taken to court they are likely to take large sections of the government down with them.

Alatas: "We have gone as far as saying that perhaps you know certain rogue elements were involved, yes. But I don't know..."

Mark: "Well these rogue elements go right up the command of TNI and now clearly they cross into the Cabinet. Is Lopez Da Cruz a rogue element?"

Alatas: "No of course not. But he is not involved in the killing. let's put the blame where the blame resides."

Mark: "Well were should the blame reside?"

Alatas: "Probably those who are wielding the machetes and who are wielding the guns and so on."

Some of the people who were wielding the machetes and the guns are being kept here at this Falintil camp behind Dili. These men have been accused of being militia members. None of them are militia leaders but they may still be the only ones who will face the justice system. Not their military commanders or their ministerial paymasters.

"We are not educated people who write in offices. We're illiterate, working in farms and paddy fields. They called us, took our names and said,' you've got to join this group.' We said, 'What are we joining it for?'. They said, 'If you refuse to join, you'll see what happens.' So we were scared and we joined."

"When we joined the militia, we thought it was a good thing. But they told us to do all these things. I knew nothing, but was forced to do all those things. We did it all against our will. They forced us to do it. I feel pain inside. We didn't know what was going on. The educated ones set this up for us to do terrible things to each other."

In a forest West of Dili Filomena's husband is unearthed. His wife and children now know how he was killed – with his ears cut off and his head caved in. But in a ledger in the department of finance, this is not a grave it's a road project or a canal, not a murder but a public service.

[The original transcript was corrected and edited slightly to improve readability - James Balowski.]

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