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Updated August 13, 2003
Suharto Crony Stays Busy Behind Bars
'Bob' Hasan Starts Business, Pulls Strings at Olympics
By RICHARD BORSUK
Staff Reporter of THE WALL STREET JOURNAL
http://online.wsj.com/article/0,,SB106072304699259700,00.html?mod=home%5Fpage%5Fone%5Fus


NUSAKAMBANGAN, Indonesia -- In a steamy prison yard on this remote island south of Java, inmates grind and polish nuggets of black volcanic rock into pieces of ornamental jewelry. Standing by a simple wooden table piled high with ledgers, a fellow prisoner keeps a watchful eye on the work.

At 72 years old, the supervisor is decades older than his charges. Unlike many of them, however, he isn't a murderer or rapist. Nor is he an expert in stonecraft. A trim figure clad in polo shirt and Old Navy slacks, he is a multimillionaire who was, until recently, one of Asia's most powerful insiders.

For decades, Mohamad "Bob" Hasan was a close crony of disgraced former President Suharto. The businessman's interests ranged from mining to a $4 billion-a-year plywood cartel. His twice-a-week golf games with Mr. Suharto earned him the nickname "First Friend." For years, he played in the annual Bob Hope charity golf tournament and teed it up with the likes of actor Sylvester Stallone. His connections landed him a prestigious seat on the International Olympic Committee in 1994.

Then Mr. Hasan was caught in a backlash against the Suharto clique after the autocrat was forced from power in 1998. He was convicted of cheating the state of $75 million in connection with a scam involving satellite mapping of forest areas -- and given a six-year prison sentence. Mr. Hasan is appealing the conviction to Indonesia's Supreme Court.

"I've done nothing wrong," Mr. Hasan says in a rare recent interview, adding that he rejected friends' advice to flee Indonesia to beat the rap, telling them, "Why should I go away?"

Yet as one of 185 residents of Batu prison, where he has occupied a 13-foot-by-16-foot cell since March 2001, Mr. Hasan continues to wield considerable clout and display the lobbying and organizational skills he developed during his five decades at the center of Indonesian society. Last month, for instance, he staved off a recommendation by the IOC's ethics commission to strip him of his seat on the committee, rallying supporters in the international body that regulates the Olympics to postpone a vote on his status until 2004. He is classified as "suspended" and not allowed a vote.

In Batu, one of four maximum-security prisons located on the island, known as Indonesia's Alcatraz, Mr. Hasan quickly persuaded authorities to allow him to take control of the stoneworks, previously an informal operation in which a handful of inmates polished obsidian to sell to the restricted island's few visitors. It was poorly organized and not very productive, Mr. Hasan says, "and I organized it. Of course they agree. It's for the good of the prison."

For the stoneworks, Mr. Hasan was permitted to import machinery and arrange a cooperative that employs about a third of the inmates. He set up an outside supply chain to build a market for the stones, which end up in earrings and necklaces sold in Jakarta department stores.

Mr. Hasan isn't allowed to make any profit. Inmates earn about 60 cents a day, a tenth of which they have to save. But "most important is that they have something to do," he says. "If they have nothing to do, they gamble, fight and quarrel."

Some of the revenue goes into improvements for the cash-strapped jail, including the retiling of a decrepit bathroom. Batu "was a very dirty place," Mr. Hasan says. "Now it's healthier."

An ethnic Chinese who long ago converted to Islam, Mr. Hasan underwrote construction of a new mosque to replace a dilapidated one. He repaired a soccer field and imported a ping-pong table, which he uses every afternoon. He also started programs in woodworking and tailoring. Former prison warden Sumantri estimates that the famous inmate has invested about $24,000 in the facility.

Since the prison has inadequate medical facilities, authorities let Mr. Hasan go to Jakarta every month to check on a heart ailment. Along with six policemen, he takes a short boat ride to Java and an eight-hour journey by van to the capital.

Such allowances in part reflect a culture of deference to powerful figures that was inculcated over decades of rule by the Suharto regime. A prison official in Jakarta notes that Mr. Hasan, who briefly served as a cabinet minister for trade and industry in the final weeks of Mr. Suharto's rule, "is still a big man."

Mr. Sumantri, warden here from 2001 until he retired last month, says the prisoner has broken no regulations and is a savvy businessman who "helps provide good activities" while "knowing his position and the rules."

So great is Mr. Hasan's authority that when a prisoner recently brandished a knife made from a window grill's metal bar, the guards deferred to Mr. Hasan, who says he told the man: "You know what I'll do" if the weapon wasn't handed over (it was). He adds, in a confidential tone: "Actually, I didn't know what I was going to do."

While conceding he still likes to call the shots when he can, Mr. Hasan rejects as "nonsense" the suggestion that he seems more powerful than prison authorities. He says he just aims to stay productive.

Prison officials didn't allow a viewing of Mr. Hasan's cell, which he says has a fan and shortwave radio, but no air-conditioning, television, hot water or flush toilet. Mr. Hasan says he does an hour of floor exercises in his cell every morning. Through those, and by eating mainly vegetables, he has cut his bad cholesterol to 170 from 360, he boasts. In accordance with Muslim precept, he fasts every Monday and Thursday during daylight hours.

He expects members of the stoneworks' co-op to practice some self-discipline, too. "If anybody is smoking, I kick them out," he declares. "There has to be discipline."

Riyanto, a 39-year-old guard, says Mr. Hasan has given prisoners more to do and "less time to fight each other and gamble." Budiono, a 29-year-old inmate who's halfway through an 18-year sentence for murder, says, "We're happy to have him here," using an Indonesian word for "him" that conveys high respect.

In exchange, Mr. Hasan says, fellow inmates "know I take care of them." Through a foundation he used to run for Mr. Suharto, the tycoon arranged a free cataract operation in Java for a 59-year-old murderer named Hashim.

Whether or not Mr. Hasan wins his appeal, he could be out of jail next year, thanks to sentence reductions for contributions to prison welfare and four blood donations he makes each year. Once released, Mr. Hasan says, he hopes to return to the wide world of sports -- including his IOC seat.

"Outside sports, I don't think I'm salable," he says. "But I think I'm still useful in sports."

-- Puspa Madani contributed to this article.

Write to Richard Borsuk at [email protected]




The Jakarta Post
Timber tycoon 'Bob' Hasan sent to jail
City News - February 14, 2001
http://www.ecologyasia.com/NewsArchives/Feb_2001/thejakartapost.com_20010214.@02.htm

JAKARTA (JP): Timber tycoon Mohamad "Bob" Hasan was sent to Salemba Penitentiary in Central Jakarta on Tuesday following a Jakarta High Court decision to lift his house arrest.

Prosecutor Arnold Angkaw said Hasan began serving his jail term at 11 a.m.

In the prison, Hasan shares a two-meter by 2.5-meter room with East Timorese prointegration fighter Eurico Guterres, who is being tried here for illegal gun possession, and one other prisoner, detik.com reported.

Toga Effendi, an employee at the prison, said the facility, which has a capacity of 753 people, held 1,856 detainees.

Hasan was sent to jail based on the high court's decision dated Feb. 10, signed by the court chief, I Gede Sidharta. The high court lifted the house arrest in response to the prosecutor's appeal against the Central Jakarta District Court's controversial verdict on Hasan.

On Feb. 2, a three-member panel of judges, presided over by Subardi, sentenced Hasan to two years under house arrest -- a decision that sparked controversy and drew strong criticism from the public.

The judges found Hasan, former chairman of the Indonesian Forest Concessionaires Association, guilty of misusing US$75 million in forestry funds belonging to the Ministry of Forestry.

But the defendant was exonerated from charges of fraudulent use of US$168 million funds for aerial mapping conducted by the defendant's company, PT Mapindo Parama, between 1989 and 1999. According to the judges, it was a civil case between the company and the association.

The judges also fined Hasan Rp 15 million and told him to return Rp 14.1 billion to the state.

Prosecutors had earlier sought an eight-year prison term for Hasan, along with a Rp 30 million fine and an obligation to repay US$243.7 million in state losses.

Hasan, 70, the minister of industry and trade in 1997, is the first of former president Soeharto's cronies to be tried for corruption.

In handing down the verdict, the Central Jakarta District Court took into consideration as a mitigating element the fact that Hasan had dedicated himself to national sports.

Hasan is chairman of the Indonesian Track and Field Association and a member of the International Olympics Committee. The National Sports Council is still waiting for an official letter from the organization regarding the fate of his membership after being convicted of corruption.

The Attorney General's Office is also investigating Hasan's alleged involvement in another corruption case.

Prosecutors suspect that Hasan, a former chief patron of the Association of Indonesian Wood Panel Producers, and Asmaning Tjipto Wignjoprajitno, its former chairman, had misappropriated some $84 million. The money, allocated for export promotions, came from the monthly dues of the association's members.




Indonesian timber tycoon with Oregon ties arrested Mohamad "Bob" Hasan, part owner of Portland's Plywood Tropics USA, is held in Jakarta on allegations of fraud
Copyright 2000, The Oregonian
March 30, 2000
Richard Read of The Oregonian staff


Prosecutors investigating corruption under former President Suharto have arrested an Indonesian timber tycoon with business interests in Oregon.

Mohamad "Bob" Hasan is in detention in Indonesia's capital, Jakarta, after allegations that he defrauded the government through PT Mapindo, an Indonesian forest-mapping company under his control.

Hasan is a part owner of Plywood Tropics USA, a Portland company that buys Indonesian plywood for sale to U.S. mills and other customers. He also formerly controlled Astra International, an Indonesian conglomerate whose footwear division makes shoes for Beaverton-based Nike.

The arrest Tuesday of Hasan, a longtime associate of Suharto who served as trade and industry minister before the president resigned amid riots in1998, suggests that Indonesia's new government is getting serious about probing corruption under the previous regime. Indonesians have expressed growing frustration over the lack of results from the investigations.

Suharto, Indonesia's autocratic president for 32 years, was supposed to face questioning Thursday at the attorney general's office. But his lawyers say he is too sick to appear, although state doctors have declared him medically fit.

Hasan is a longtime golfing and fishing pal of Suharto and has appeared on Forbes magazine's list of the world's richest people, with assets of $3 billion. He has held stakes in more than 300 companies that span logging, pulp and paper, airlines, chemicals, finance, media and insurance.

Hasan bought Georgia-Pacific's Indonesian plywood mills in 1983 after G-P moved from Portland to Atlanta. He took a 50 percent ownership in Plywood Tropics through a Hong Kong company that he controlled.

Plywood Tropics executives declined to comment Wednesday on Hasan's arrest.

"No, it doesn't affect us, but I really can't comment on it," said Catherine Curtis, Plywood Tropics' vice president. She declined to give any information about the company, other than to confirm that Hasan retains his interest.

Hasan, one of three tycoons closest to Suharto, founded and headed a state-sanctioned monopoly that sold several hundred million dollars of plywood a year to U.S. firms. He also held interests in a large Indonesian forestry company and in shipping companies that carry wood from the Southeast Asian nation, the world's biggest hardwood plywood producer. Hardwood plywood is used in paneling and furniture.

Prosecutors questioned Hasan for seven hours Tuesday in connection with a government contract awarded to PT Mapindo to map forests in 1997, the Jakarta Post reported. They said they might lodge other corruption charges against Hasan, who would be detained for at least 20 days. He also is under investigation separately for banking fraud.

Prosecutors said last month that Hasan misused public reforestation money he received for his industrial forest estate. Some timber magnates under Suharto's regime exaggerated the size of their estates to get more reforestation money or diverted the grants to other business ventures.

Hasan once controlled Astra International, which was Nike's largestIndonesian supplier. But the government recently auctioned off a share of Astra that it seized from Suharto's family and friends.

A Nike spokeswoman said Wednesday that the company still did business with Astra's footwear division but wasn't sure whether Hasan continued with the parent company. Astra, which makes cars, was nearly wiped out by the Asian financial crisis.




A Timber Tycoon's Trophies
Why is one of Asia's most unscrupulous foresters winning environmental awards?
by Leslie Weiss
November 18, 1997
http://www.motherjones.com/news_wire/hasan.html


If you didn't know any better, you'd think Indonesian timber tycoon Mohamad "Bob" Hasan was a champion of the environment. He's received at least three awards from U.S. groups for his contributions to the environment in the past year alone.

In April, Hasan's timber conglomerate, the Kalimanis Group, was recognized by Clinton administration officials for efforts to reduce greenhouse gas emissions. Then the dean of North Carolina State University's College of Forest Resources named Hasan an honorary professor at the August ribbon-cutting of his new pulp and paper mill in East Kalimantan, on the island of Borneo. "It is rare that a person emerges to have the potential of teaching the entire world," Dean Larry Tombaugh said.

Hasan also won the "Harry A. Merlo Award" for environmental achievements from the Oregon-based World Forestry Center. "In Indonesia, you are not allowed to own the forest -- the forest is owned by the government and its people," Hasan modestly notes in a WFC video tribute to himself. "We are only given time to manage it... If we manage it on a sustainable basis, we can continue."

Bob the Pyromaniac

What is sustainable to Hasan, apparently, is anything but sustainable to forests. Hasan, who heads Indonesia's forest industries, is the man behind the nation's destructive slash-and-burn forestry.

The Far Eastern Economic Review says that Hasan "has been unquestionably the strongest player in setting Indonesia's forest policies." These policies, says Stephanie Fried, a senior scientist with the Environmental Defense Fund, "have led to the liquidation of Indonesia's forest resource base, sparked major conflicts with indigenous peoples and other forest dwellers, and, in the final analysis, set the stage for the current fires."

In 1993, one of Hasan's companies, PT Kalhold Utama, bulldozed and burned hundreds of acres of forested land used by a community of indigenous Dayak people for rattan and fruit production. The company -- in a move documented by the World Bank -- also bulldozed graves of the community's dead.

According to Christopher Hatch of the Rainforest Action Network, Hasan's Kalimanis Group, with timber holdings spanning 7,700 square miles in Kalimatan, is "one of the most voracious, barbaric conglomerates in the world."

Even the Indonesian government -- a corrupt operation that normally scratches Hasan's back -- has begun to criticize his companies' practices. In September the Environmental Minister pegged three of Hasan's companies as being among those that deliberately set the forest fires that are still raging in Indonesia.

Hasan's responsibility, though, extends far beyond his own companies' practices. As chairman of Apkindo, a government-sanctioned cartel that regulates $3.7 billion in annual plywood exports, he plays a major role in establishing industrywide forestry practices. On behalf of the industry, he has denied any blame for the tragic fires, and instead blames peasant farmers.

Gurmit Singh, head of the Center for Environment, Technology and Development, a Malaysian environmental organization, says farmers clearing plots with fire are responsible for 10 to 20 percent of the damage at the most.

How Does Bob Get Away With It?

Worth an estimated $1 billion, Hasan is one of Indonesia's major industrial players. He owns interests in media, banking, and insurance corporations, and is chairman of Astra, one of the nation's largest auto manufacturers. He is also a confidante and golfing buddy of President Suharto (Hasan also putted around at last year's Bob Hope Classic) -- a profitable relationship in a country where the president's family and friends hold much of the wealth.

"Given the immense amount of profit accruing to companies involved in the forestry and plantation sector, there has been a lack of political will to enforce the most basic forestry regulations," Fried says.

One environmental worker in Indonesia, fearing bodily harm, would speak about Hasan only under the condition of anonymity: "He is very powerful. He is very close to the president. He is beyond the law."

Hasan's Gifts

Two of Hasan's timber operations are enjoying favorable treatment by the U.S. government. Last April, the United States Initiative on Joint Implementation (USIJI), a Clinton administration project, announced a new partnership with the two logging concessions and honored Hasan's Kalimanis Group conglomerate at a White House ceremony. The partnership was one of 10 new projects announced by USIJI, which facilitates investment by U.S. companies into foreign-based industries working to reduce greenhouse gas emissions.

The Indonesia project, USIJI officials say, will implement "reduced impact logging" on 1,480 acres of Hasan's timber concessions to lower greenhouse gas emissions. Over the next 40 years, 56,400 tons of carbon will be "saved" as a result. So far, though, nothing's been saved -- a U.S. investor for the project has yet to be found. (Fifty-six thousand tons of carbon is a "miniscule amount," notes scientist Darren Goetze of the Union of Concerned Scientists. Each year, he says, the U.S. alone emits close to 5.5 billion tons of carbon.)

Asked about the environmentally unsound practices of Hasan's companies, USIJI Deputy Director Paul Schwengels says the USIJI isn't supposed to look at a company's track record -- it just evaluates the proposed project for its future environmental benefits.

Says Schwengels: "We don't necessarily say that this company -- everything it does -- benefits the environment.... We are asking companies to do something that benefits the environment that they wouldn't otherwise do."

That's pretty much Dean Tombaugh's explanation for bestowing an honorary professorship on Hasan at the opening of the Kiani Kertas pulp mill -- the largest in Southeast Asia. "I would be the last to proclaim to be an expert about Indonesia, but it has appeared to me... the environmental future of that country is in the hands of a few major industrialists. And Mr. Hasan is one of them," Tombaugh says.

He adds that Hasan, who made a "small gift" to North Carolina State University -- somewhere in the range of $100,000 to $150,000 -- is going to practice forestry no matter what, so he figured that a little award might open a dialog between the timber baron and the academic community in the West. Such a relationship might provide Hasan with an incentive to practice sustainable forestry, Tombaugh says.

In Oregon, meanwhile, Hasan's award for his extraordinary achievements in forest stewardship from the World Forestry Center can be explained in one sentence: He sits on the board of this timber industry front group.

Leslie Weiss is a freelance writer based in Oakland, California.




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