CORRUPTION Syndromes of Corruption

180 Syndromes of Corruption
evidence of reform, but they were equally important as warnings to other
officials to keep their illicit dealing within limits.
The President amassed considerable wealth, but even more remarkable
were the companies, import–export concessions, and whole industries held
by ‘‘Suharto, Inc.’’ – his six children, his grandchildren, nieces, nephews,
and other relatives. Family members held significant equity in over 500
domestic corporations and many more overseas, and controlled lands that
combined were larger than the area of Belgium (King, 2000: 613).
Holdings included banks and manufacturers, the national lottery, and a
monopoly over the marketing of cloves (lucrative in Indonesia, where tens
of millions of smokers prefer tobacco laced with clove). Family members
also struck alliances with top figures in Indonesia’s economically powerful
Chinese minority. After liberalization in the 1980s the only major industries
that continued to enjoy protectionist policies were Suharto family
holdings. A 1998 estimate of the family’s wealth put it at over $15 billion,
and by one reckoning over $70 billion passed through family members’
pockets and businesses between the mid-1960s and 1998 (Liddle, 1996;
Robertson-Snape, 1999;King,2000; Cole,2001; Hornick, 2001).
The military was a full partner in the New Order from the beginning,
and in corrupt dealings too. Official military outlays were modest by
regional standards, but other expenditures were hidden elsewhere in the
budget, took place off-budget, or were laundered through agencies such
as the state oil corporation. Funds from the President’s personal foundations
helped purchase advanced weapons, another factor that maintained
the generals’ political loyalties. The result was a continuing flow of
unaccounted resources to top brass, many of whom were active in business
or real-estate. Others took kickbacks on military procurement contracts
or parlayed top military positions into lucrative consultancies or
directorships, both before and after retirement. The military remains a
significant economic as well as political force today (Liddle, 1985; King,
2000; Makarim, 2001; Malley, 2003).
Judges and bureaucrats shared in the wealth as well. A 1995 estimate by a
retired Supreme Court jurist had it that half of the nation’s judiciary would
fix trials for a price (Hornick, 2001: 9). Low-level bureaucrats in Indonesia,
in the 1990s, were paid the equivalent of just $25 per month plus a rice
allowance; they thus had little choice but to partake of Suharto and Golkar
patronage, available so long as they made friendly decisions, and were always
on the lookout for bribes. Banks often made ‘‘command loans’’ to favored
business people. A Canadian firm that discovered what appeared to be major
sources of gold ore found its license applications held up while a family
member put together a competing proposal; the two bidders ended up hiring
competing family members to expedite their proposals, for fees and