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The Corruption of Warren Christopher

Monday, 13 November 2000 12:00 AM

Christopher personally urged the Indonesian government to cover up documented corruption inside a $2.6 billion power plant contract. Christopher did so as a "member of the board" of the U.S. corporation involved, and thus had a direct financial interest in the illegal contract.

In fact, Christopher was there in the beginning. In 1994, President Clinton traveled to the lush Asia/Pacific Economic Conference 1994 in Jakarta, Indonesia. Christopher, then secretary of state, accompanied Clinton.

In Jakarta, Clinton signed a trade agreement to supply Indonesia a $2.6 billion coal-fired electric power plant using U.S. taxpayer loans. The new contract for the Paiton electric power plant in east Java was also worth billions to U.S. corporations such as Edison 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 Clinton during the 1994 Jakarta signing with Christopher at his side.

However, behind the roots of a Clinton's "open society" lurked the dark corruption of a closed and secret world involving the CIA. Convicted DNC fund raiser John Huang met 37 times with the CIA for secret briefings. One such meeting was on secret bribes for Indonesian President Suharto. Documents obtained using the Freedom of Information Act show that the Paiton power plant started with a $50 million dollar bribe paid to relatives of the Indonesian dictator.

According to the documents, CIA agents Bob Beamer, Chris Crosby, Lia Fidas and Nancy Goldcamp attended an August 1994 "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.

"ADB (Asian Development Bank) had raised concern about first family involvement during its consideration of the $50 million financial portion," states the Paiton Project document found in Huang's files.

Another November report 1994 Commerce Department advocacy found in Huang's office shows that the Paiton project encountered difficulties with financing because the Asian Development Bank knew it also contained a Suharto family kickback. Suharto's son-in-law, according to the U.S. government advocacy document, was known to be a shareholder in the power plant.

"Ambassador Barry stated that the project is facing two problems," noted Commerce officials on the Paiton project status document.

"(i) the ADB financing may cave in and (ii) EXIM financing. Regarding ADB, technical questions have been satisfied, but ADB is skiddish about involvement of Indonesia's first family (a minority shareholder is married to Pres. Suharto's daughter)."

In addition, 1994 documents provided by the Offshore Private Investment Corporation (OPIC) noted that Suharto's daughter Prabowo and her brother-in-law, Hashim Djojohadikusumo, were given a total "2.5%" ownership in the U.S.-sponsored power project.

"ADB is still considering this, b/c of very minimal involvement of Indo ruling family in the Mission project... ADB's delay revolves around concern for projects in Indonesia involving the first family. .75% ownership of the Mission project by daughter of Indo pres."

After the August 1994 CIA meeting on Indonesian corruption, Huang immediately left the Commerce Department and went to an office owned by Arkansas billionaire Jackson Stephens. There Huang made a very long phone call to his former Indonesian employer, the Lippo Group.

The Lippo group is a consortium, part owned by billionaire Moctar Riady, the former employer of John Huang. PT Lippo is a partner of U.S. based First Union Bank, a major investor in the Paiton project. The leader of the U.S. project in the Paiton power plant, Mission Energy, is also a partner of Indonesia's Lippo group.

PT Lippo also provided financing to "bother-in-law" Hashim for his coal mining company that supplied a "no-bid" contract to the Paiton power plant. While serving as the minister for mines under Suharto, Hashim managed to purchase the world's only "low sulfur" coal mine. His financial backers include Moctar Riady's PT Lippo and, his sister-in-law, Prabowo.

In 1996, the corrupt Suharto regime obtained a global monopoly thanks to Clinton's executive order for the 1.7 million-acre Grand Staircase-Escalante National Monument in Utah, over the only other known "low sulfur" deposit.

Yet, all bad things must come to an end. By August 1998 Suharto was gone. The Indonesian economic meltdown caused Mission Energy to panic and seek aid from the Clinton administration. In 1998, Commerce officials prepared a report for Secretary William Daley on a meeting with Mission Energy CEO Edward Muller. Daley is currently Gore's top campaign adviser.

"Warren Christopher is on Edison Mission's board of directors," states the Commerce report to Daley.

"Mr. Muller will raise his concerns about developments in Asia in general and about the Paiton project in particular. He will probably attempt to enlist your support for the Paiton project. Given competing interest by other U.S. firms, we cannot commit to this particular project."

"Ex-Im (Export Import Bank) is the guarantor for $540 million in the pre-completion phase. OPIC is the senior lender (provides guarantees for banks to lend) and insurance provider for the post-completion phase ($200 million). (Mission did not take out political risk insurance from OPIC or Ex-Im.)," noted the report to Daley.

According to the Commerce Dept. 1998 report, the corrupt Suharto regime purchased 25 power projects similar in size to the Paiton project, while the poor nation could afford only one such plant. Thus, the U.S. power companies were competing against each other to be the single survivor.

"Both Ex-Im and OPIC confirmed that if the 1200 MW Paiton project were to go on line, it would most likely wipe out any further GOI (Government of Indonesia) need for other power plants. Thus, several other major U.S. power developers with other projects, in varying stages of completion, are potential competitors with Edison for power purchase agreements."

The documents show that Christopher was aware of the billions in illegal payments made by corporations to Suharto and several other dictators around the world. Illegal payments passed on to stockholders and customers of the corporations such as Edison Mission Energy in the form o

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Christopher personally urged the Indonesian government to cover up documented corruption inside a $2.6 billion power plant contract. Christopher did so as a member of the board of the U.S. corporation involved, and thus had a direct financial interest in the...
Monday, 13 November 2000 12:00 AM
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