VZCZCXRO1540
OO RUEHCHI RUEHDT RUEHHM
DE RUEHJA #1920 1940750
ZNR UUUUU ZZH
O 130750Z JUL 07
FM AMEMBASSY JAKARTA
TO RUEHC/SECSTATE WASHDC IMMEDIATE 5429
INFO RUEHZS/ASSOCIATION OF SOUTHEAST ASIAN NATIONS
RUEHBY/AMEMBASSY CANBERRA 0903
RUEHWL/AMEMBASSY WELLINGTON 1586
RUEHLO/AMEMBASSY LONDON 0799
RUEHFR/AMEMBASSY PARIS 1013
RUEHTC/AMEMBASSY THE HAGUE 3331
RHHJJPI/USPACOM HONOLULU HI

UNCLAS JAKARTA 001920 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
DEPARTMENT FOR EAP, EAP/MTS, EB 
 
E.O. 12958: N/A 
TAGS: PGOV EFIN KJUS KCOR ID
SUBJECT: PROSECUTORS FILE CORRUPTION CASE AGAINST 
SUHARTO-LINKED FOUNDATION 
 
REF: 06 JAKARTA 6332 
 
¶1. (SBU) Summary:  The Indonesian Attorney General has 
reopened the legal battle to recover former Indonesian 
president Suharto's allegedly ill-gotten wealth with a civil 
lawsuit against the Suharto-linked Supersemar Foundation. 
The case, which seeks the recovery of $1.66 billion plus 
property, differs from the now defunct criminal case against 
Suharto by targeting the foundation rather than Suharto 
personally.  The move comes within weeks of a cabinet 
reshuffle in which President Yudhoyono appointed a new 
Attorney General, among others.  Given past failures, most 
Indonesians are skeptical that this case will succeed.  End 
Summary. 
 
¶2. (U) On July 9, the Indonesian Attorney General's Office 
(AGO) filed a civil lawsuit in South Jakarta District Court 
against former President Suharto and the Suharto-linked 
Supersemar Foundation for alleged funding discrepancies 
resulting in $420 million in losses to the state. 
Prosecutors asserted that half of the foundation's net profit 
should have been allocated for scholarships but instead was 
diverted to Suharto's family and cronies, in particular to a 
group of companies run by Bob Hasan.  The AGO is demanding 
the return of $1.66 billion, along with properties belonging 
to the foundation, to the state. 
 
¶3. (U) The move comes only weeks after President Yudhoyono 
appointed a new Attorney General and Minister for Justice and 
Human Rights.  The AG, Hendarman Supandji, made public 
statements soon after his appointment indicating an interest 
in reexamining the case against Suharto.  His predecessor, 
after considerable effort in the criminal case, had closed it 
in May 2006 on the grounds Suharto was too ill to stand trial 
(reftel). 
 
¶4. (U) The new case, like the one before it, targets 
Suharto's allegedly illegitimate wealth, most of which 
purportedly resided in his various foundations, but is a 
civil rather than a criminal suit and is directed at the 
foundation rather than Suharto personally.  As noted reftel, 
however, the Suharto foundations have been managed by a 
succession of state agencies since the AGO first opened its 
investigation of them in 2000.  They have not necessarily 
been well managed and reportedly have significant liabilities. 
 
¶5. (U) According to observers, the case faces some potential 
evidentiary obstacles.  The evidence consists largely of 
documents the AGO confiscated from the foundation in 2002, 
which were returned to the foundation after the case was 
dropped (though the law requires their preservation), leaving 
prosecutors with copies.  The key advantage of the civil suit 
is that it does not require Suharto's testimony in court and 
should therefore not be affected by his state of health. 
 
¶6. (SBU) Many Indonesian observers are skeptical that the new 
case will succeed.  Since Suharto stepped down in May 1998, 
much effort has been spent, for political and fiscal reasons, 
to recover at least a portion of the billions of dollars 
Suharto, his family and his cronies are said to have 
misappropriated.  Most previous efforts ultimately have been 
dropped or not fully pushed.  These failures have left many 
Indonesians jaded.  That said, the news of the case seems to 
confirm that President Yudhoyono remains serious in fighting 
corruption. 
HUME