U.S. Pays for Clinton-Riady-China Connection

In 1993, before Bill Clinton was sworn into office, Lippobank Vice Chairman John Huang sought out DNC chairman Ron Brown. Huang, a major Riady-backed Clinton fund-raiser, sought to leave his six-figure job at Lippo to work as an underpaid U.S. government employee under Brown.

In a January 1993 letter addressed to DNC headquarters, Huang wrote to Brown for a meeting with Lippo CEO Riady. The letter was obtained from the U.S. Commerce Department using the Freedom of Information Act.

"Daer [sic] Ron," wrote Huang in a poorly written letter filled with broken English. "Congratulations for great performance during yesterday Senate hearing. I was watching it in the Senate Russell Building and came away with the strong feeling that you will do an outstanding job as the Secretary of the Department of Commerce in the coming years.

"I was trying to reach you. But there were too many people there and I was not successful to do it," noted Huang. "What I really want to do is to identify a convenient time in the coming week to arrange a meeting between you and Dr. Moctar Riady, our Group Chairman."

Shortly after the letter, Huang took a pay cut, entered his new position at the U.S. Commerce Department and accepted a huge bonus check from the Lippo Group. It was during his stay at Commerce that Huang received 37 secret briefings with the CIA.

In August 1994, CIA agents attended the "TPCC" or "Trade Policy Coordinating Committee" meeting with Huang. The subject of the CIA meeting was U.S. government-financed trade deals that contained "first family involvement" or illegal payments made to relatives of then Indonesian dictator Suharto.

According to documents obtained using the Freedom of Information Act, one project – the Edison/GE coal-fired Paiton power plant – had problems with a $50 million payment to Suharto's youngest daughter, Titek Prabowo, and her brother-in-law, Hashim Djojohadikusumo. The power plant had encountered difficulties with financing because the Asian Development Bank (ADB) knew it contained money for a Suharto family member. Directly after meeting with the CIA, Huang proceeded to place a three-hour call to his former employer, Lippo Group.

The newly released Commerce Department documents show that Huang, James Riady (son of Moctar Riady), Brown, and "brother-in-law" Hashim all met together in November 1994 – after Huang made the long-distance phone call to Lippo in August. The meeting took place inside Indonesia and was sponsored by James Riady and Hashim Djojohadikusumo.

Directly after that meeting, Bill Clinton endorsed the Edison project, and he signed a trade agreement to supply Indonesia with electric power using U.S. taxpayer loans. The trade agreement was worth billions to U.S. corporations such as Mission Energy and General Electric.

"As markets expand, as information flows, the roots of an open society will grow and strengthen and contribute to stability," stated President Clinton during the 1994 signing in Jakarta.

It is no coincidence that Lippo Group was also Hashim's financial backer in his sulfur-free coal mine. Hashim obtained a no-cut, no-bid contract to supply the coal to the Edison/GE Paiton power plant. According to State Department cables, Hashim's no-bid contract was characterized the Achilles heel of the power plant, forcing the Paiton plant to sell electricity at a huge loss.

In the end, the Suharto corruption quietly killed the $50 million financing, and the Asian Development Bank refused to make the instant loan to Suharto's daughter. Lippo partner Edison Mission Energy convinced the Clinton administration to financially back the project. In 1995, the Brown-led Commerce Department found financing for the power plant through the U.S. taxpayer.

In April 1995, the Export-Import Bank of Japan, the Export-Import Bank of the United States, the Overseas Private Investment Corporation (OPIC) of the United States, and eight commercial banks provided $1.82 billion in limited recourse project debt to Edison's Paiton project. According to State Department cables, the financial support by OPIC was not without risk.

"OPIC's combined exposure in Indonesia is close to USD 1 billion, or 5 percent of OPIC's global exposure, all in the electric power sector. As such, resolution of potential insurance claims and/or actions could result in 'an adverse material impact' on OPIC finances," notes the cable from the U.S. ambassador to Indonesia.

Despite being faced with a possible bailout due to huge losses, OPIC continued to back power deals inside Indonesia. The Commerce documents note that during the Clinton years, Indonesian dictator Suharto contracted for 26 U.S. taxpayer-sponsored power projects while his impoverished nation could afford only one such plant.

According to State Department documents, Unocal, Calenergy and El Paso Energy were all subject to "corruption, collusion and nepotism" in several other billion-dollar power plant deals with the Suharto government. One State Department cable included an entire section titled "Dealing with unwanted partners."

"Unocal executives told resources officer that the firm is close to reaching a deal with its partner, PT Nusamba (controlled by former President Soeharto [Suharto] crony Bob Hasan) to sever ties in two production sharing contracts (PSC) in East Kalimantan and East Java," notes another State Department cable.

"According to Unocal, Nusamba put USD 20 million into Gunung Salak, and it would be difficult, due to the financial structuring of the deal, to undo the partnership."

The U.S. government documents show that from the gas pump to the electric outlet, every global consumer pays for corruption inside the energy industry. The state Indonesian Power Co., PLN, estimated that it lost more than $18 billion from Suharto corruption inside power plant contracts.

For example, in April 1996 U.S. Ambassador Barry wrote, "Java Power Company has obtained a USD 1.7 billion financing package for its 2 X 610 coal fired Paiton Swasta II power plant.

"Java Power Company is 50 percent owned by Siemens Power, 35 percent Powergen PLC of the UK and 15 percent by PT Bumiperitwi Tatapradipta. The latter is a subsidiary of the Bimantara Group controlled by Bambang Trihatmodjo, President Soeharto's second son," wrote Barry.

How much "corruption, collusion and nepotism" remains hidden inside the U.S. energy bill may never be known. Even the largest energy producers, such as Exxon, were not above paying off Suharto. According to documents found in Huang's office, Exxon's $34 billion Natuna sea gas deal with Indonesia was laced with "first family involvement." A 2001 Freedom of Information response from the U.S. Commerce Department noted that the exact amount of money that Exxon paid to the Suharto regime must remain secret.

In 1996 Clinton issued an executive order creating the 1.7 million-acre Grand Staircase-Escalante National Monument in Utah, rendering the "low sulfur" coal deposit off limits for commercial mining. The move, for all practical purposes, gave Beijing control of the world's only sulfur free coal through its Lippo Group partner.

In 1999 the Edison Paiton project was declared illegal using many of the documents discovered and cited in this article. Today, the Paiton electric power plant is silent, closed after an audit revealed $280 million missing. Indonesia cannot afford and does not need the coal-fired electric power plant in east Java.

America, too, is suffering. The California taxpayer is being asked to bail out some of the very same energy companies that also paid billions in illegal deals to the corrupt Suharto regime. The U.S. consumer is also stuck, paying staggering bills for electric power, while stockholders suffer losses in the faltering energy companies.

In 1999, Huang pleaded guilty to federal charges of making illegal political contributions to the Clinton-Gore campaign. Huang took the Fifth Amendment more than 2,000 times when asked by Larry Klayman of Judicial Watch if he had ties to Chinese intelligence.

The son of Lippo founder Moctar Riady, James Riady, also recently pleaded guilty for passing illegal donations to the Clinton-Gore political campaigns. Riady's plea, however, is pending approval by the new attorney general. Riady's plea includes the promise to tell all.

In the 1990s, agents working for the communist Chinese MID, or Military Intelligence Department, penetrated the American White House at the highest level. China Resources investments in Lippo grew during the course of the Clinton administration, coinciding directly with the illegal six-figure Lippo contributions to Clinton's cash machine. The money lines between Beijing and Bill Clinton all meet at an unused electric power plant in east Java.

The Clinton power bill has come due.