In 1994, U.S. Commerce officials knew there was a crime in progress
— a crime that involved millions of U.S. taxpayer dollars being used to
pay off corrupt foreign politicians. Did the Commerce Department attempt
to stop this crime? No. As a matter of fact, the federal agency appears
to have done its best to help the criminals succeed.
On Nov. 16, 1994, Bill Clinton and the late Ron Brown traveled to
Jakarta, Indonesia, for the Asia Pacific Economic Conference, at which
Clinton signed deals to supply Indonesia with electric power using U.S.
taxpayer loans. The deals were worth billions to U.S. corporations such
as Cal Energy, 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 signing.
In September 1994, long before Clinton signed the power deal, the
Commerce Department documented that Indonesian dictator Suharto had cut
himself in for a bribe. According to a 1994 Commerce document, 0.75
percent ownership of a $2 billion U.S.-backed power project was given —
at no cost — to dictator Suharto’s second daughter, Siti Hediati
Prabowo’s 0.75 percent ownership is equal to a free gift of $15
million from the U.S. taxpayers. The $15 million is part of a $50
million bribe split between Prabowo and other Suharto relatives. In
return, the Indonesian dictator selected companies owned by major
Clinton donors to build the Paiton power plant in east Java.
In 1998, the Commerce Department returned a “blacked-out” version of
a document that it had previously sent in full. The mistakenly released
document from the Commerce Department, titled “Indonesia Advocacy
Projects,” contained information on the privately held east Java Paiton
The Paiton power project consisted of two 600-million watt,
coal-fired plants to provide electricity for east Java. The partners in
the U.S.-led consortium included Mission Energy, Mitsui & Co. Ltd. of
Japan, General Electric Capital Corporation of the U.S., and P.T. Batu
Hitam Perkasa, an Indonesian firm formed in 1989 to participate in the
development of the country’s private power industry.
The leader of the U.S. project in the Paiton power plant, Mission
Energy, is also a partner of Indonesia’s Lippo Group, a consortium
partly owned by Indonesian billionaire Mochtar Riady and
the Chinese Army’s CITIC (China International Trust and Investment
According to Federal Election Commission records, Mission Energy CEO,
John Bryson, donated money to Clinton’s campaigns and donated money to
Clinton’s legal defense fund. Riady, Bryson’s partner in the Paiton
project, is also accused of illegally donating money to Bill Clinton’s
A September 1994 Commerce Department document states that the
Indonesian Paiton project encountered difficulties with financing
because the Asian Development Bank (ADB) knew it also contained the
Suharto family kickback. Suharto’s son-in-law, according to the U.S.
government advocacy document, was known to be a shareholder in P.T.
On Sept. 30 1994, The Commerce Department, State Department, Mission
Energy and several consultants met to review the Paiton project.
According to hand written notes, “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
In another document dated, Nov. 1, 1994, only days before the Jakarta
signing by Clinton, the Commerce Department noted, “Ambassador Barry
stated that the project is facing two problems.” Those two were “(i) the
ADB financing may cave in and (ii) EXIM financing. Regarding ADB,
technical questions have been satisfied, but ADB is skittish about
involvement of Indonesia’s first family (a minority shareholder is
married to Pres. Suharto’s daughter).”
The Commerce Department documented that Indonesian dictator Suharto
had cut his son-in-law into a kickback scheme. The documents show that
Commerce was not only aware of Suharto’s corrupt activities but quietly
cooperated by seeking U.S.-backed financial aid for the project.
The Commerce documentation shows that U.S. Ambassador Barry worked
directly with Linda Yang, executive director of the Asian Development
Bank, to obtain financial support despite the concerns over kickbacks to
Suharto. In fact, one document states that Yang was “doing all she can”
to help Indonesia obtain the financing for Paiton.
However, after the signing by Clinton, in 1995, the ADB decided to
not finance the Paiton deal due to their concerns. According to notes
taken by Commerce Department officials at a Paiton meeting, “Mission
Energy expecting default by March  … first project to go on bond
market $180 M and will default also.”
In April 1995, Ron Brown came to the rescue and provided the U.S.
Export-Import bank and the Overseas Private Investment Corporation to
substitute for the Asian Development Bank. Over $1.8 billion in limited
recourse project debt was provided to Paiton by The Export-Import Bank
of Japan, the Export-Import Bank of the United States, the Overseas
Private Investment Corporation of the United States, and eight
Commerce documents show that Lippo business partner Mission Energy
(now named Edison Mission Energy) received strong Clinton administration
support for the Paiton project. In March 1995, Mission Energy CEO John
Bryson wrote Commerce Secretary Brown: “Dear Ron — Thank you once again
for being so ready to support a successful completion of the Paiton
Power Project. … The U.S. Government, from the President on down, has
put a high priority on the Paiton Project.”
Furthermore, the Paiton power plant was designed to burn “low-sulfur
Indonesian coal.” In 1996 President Clinton created the 1.7 million-acre
Grand Staircase-Escalante National Monument
in Utah, placing off-limits the world’s largest deposit of low-sulfur
coal. In the process, Clinton also greatly enriched Suharto.
The coal for the Paiton plant is provided under a no bid contract
from the global monopoly of “soft” environmental coal. Prabowo’s
brother-in-law, Hashim Djojohadikusumo, owns the
Indonesian reserves of soft coal and is also another partner in the
Mission Energy-General Electric partner at Paiton. Furthermore, Hashim
is not only an old friend of Suharto, but Hashim’s brother is Suharto’s
son-in-law and a general in the Indonesian army.
Today the Indonesian power companies are bankrupt. Some U.S.
companies, such as Cal Energy, have taken their Indonesian partners to
court for non-payment. Indonesia cannot pay for the
power plants nor can their population afford the inflated rates driven
by the Suharto corruption.
The U.S. jobs created by the corrupt project are gone. Yet, the
Paiton profits lined more than one pocket. Clinton and Suharto are not
the only political connections to the corrupt Paiton power plant.
According to a December 1998 article in the Wall Street Journal, “Dan
Quayle, Robert Rubin and Ron Brown all pushed for Paiton … at various
times while they were in government. Warren Christopher and Henry
Kissinger pushed for it as Mission-GE lobbyists.”
The corruption continues to this day. The Commerce Department has
done its best to conceal evidence and hide the facts. On June 7, 1999,
Commerce refused to release all the information on the Indonesian Paiton
power plant, citing “commercial” privacy. Many of the documents released
by the Commerce Department contained whole sections blacked out for
However, mistakes were made. Once again, this reporter has obtained
the complete copy of a document blacked-out as secret by the Clinton
administration in 1999. The critical section
blacked out by Commerce officials states, “First Family Involvement: ADB
had raised concern about first family involvement during its
consideration of the $50 million.”
The blacked-out version of the same document from the Commerce
Department clearly demonstrates that the privacy of former dictator
Suharto comes before the right to know how U.S. tax dollars are spent.
The blacked-out documents show that corruption and cover-ups still
continue to be the norm inside the Clinton administration.