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Indonesia calls inquiry into British arms firm payment

Source
The Guardian (UK) - December 11, 2004

John Aglionby in Jakarta, Rob Evans, David Pallister and David Leigh – Anti-corruption investigators in Indonesia launched an inquiry yesterday into the Guardian's disclosures that a British arms company paid 16.5 million pounds to ex-president Suharto's daughter over a deal to sell light tanks.

The deputy head of the independent anti-corruption commission, Erry Hardjapamekas, said the disclosures were "a high-profile case that has to be a major concern" for his body. "It appears the state budget may have been used to buy these tanks and that the deal may have contained irregularities," he said. "If that's the case and it caused losses to the state, it's corruption and cannot be tolerated."

In London, the national criminal intelligence service (NCIS) has been asked by the trade secretary, Patricia Hewitt, to investigate the claims surrounding Alvis, which widened yesterday to include BAE, Britain's biggest arms firm.

Court papers obtained by the Guardian say BAE, which is already under investigation by the Serious Fraud Office over corruption allegations, used the same agents as Alvis. In a case whose files were disclosed to the Guardian, the high court was told by Philip Shepherd QC: "BAE were also trying to sell Hawk aircraft to Indonesia ... They also shared information and eventually were both apparently using the same Indonesian local agents, Rini and Didie Soewondho, and their company, PTSK."

The agents also acted for another arms company, Royal Ordnance, which is now, too, absorbed by BAE. The British taxpayer ended up picking up much of the tab for the Hawk transaction, along with the Alvis deal, after Indonesia's financial crisis. BAE, which now owns Alvis, refuse to comment on the allegations other than to say it did not break any laws or commit any wrongdoing.

In Indonesia, the investigation into Siti "Tutut" Hardiyanti Rukmana, Suharto's eldest daughter, would be the anti-corruption commission's first ever into the Suharto inner circle. Mr Hardjapamekas, the commission's deputy, said yesterday that he would probably approach the British govern ment for help. "We will need everything relating to this case and they should be able to help us with that."

The commission has sweeping powers to act and detain suspects without the permission of the notoriously corrupt public prosecutor's office.

The government tried to prosecute Mr Suharto for corruption four years ago, but the case collapsed after doctors ruled he was too sick to stand trial. Many observers believe that, until now, the family has wielded sufficient influence to avoid investigations.

Mr Hardjapamekas declined to speculate on who would be investigated, but the court documents name two former army chiefs, Generals Hartono and Wismoyo Arisunandar, one former deputy army chief and several other senior generals. Gen Hartono has been extremely close to Ms Tutut for years, while Gen Wismoyo married Tutut's aunt.

Commission officials are likely to demand documents from the army, the military headquarters, the finance ministry, the political and security ministry and the state planning board, said Junino Jahja, a senior investigator.

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