also: JP: Weapons purchaser claims order was for TNI

The Jakarta Post
Thursday, April 20, 2006

Editorial

War Business

The ongoing legal process of two Indonesian nationals in Hawaii accused of illegal arms purchase is not only a slap in the face for the nation, but also an indication of a long-standing illicit arms business involving individuals and groups at home.

The fact that Hadiyanto Joko Djuliarso and Ignatius Ferdinand Suharli are certified Indonesian Military (TNI) arms brokers and were on a mission to procure defense equipment when the United States federal authorities arrested them on April 9 has quickly dragged the Indonesian government into the case.

A statement by Hadiyanto's lawyer Alvin Nishimura in the opening session of his client's hearing Monday that all of the weapons -- with a total value of about US$1 million -- were "for Indonesian interests" looks to support the suspicion, although Defense Minister Juwono Sudarsono denies it.

The U.S. authorities also questioned two Indonesian Air Force officers who had accompanied the brokers to Hawaii, but found no evidence that they had any role in the transaction which Juwono said was outside the government's knowledge.

What transpires in the scandal is that arms procurement remains prone to fraudulent practices due to what has been the secret nature of the business. Open tenders are absent, restricting the business mainly to cronies of the ruling regime and of course military circles.

Still fresh in our mind is the media fanfare in December 2004 over alleged bribes paid by British tank manufacturer Alvis Vehicle Ltd. amounting to US$31 million in the mid-1990s to president Soeharto's eldest daughter Siti Hardijanti Rukmana to secure the purchase of 100 armored cars, including tanks, to Indonesia.

Investigation into the case reached a dead end after both the Defense Ministry and the Corruption Eradication Commission (KPK) said they found no evidence of irregularities in the deal, although Indonesia had to pay two and a half times the amount that Singapore paid for each of the tanks.

KPK is now shifting its focus to an alleged case of fraud in the purchase of two Russian-made Mi-17 helicopters by the Army, which may implicate the force's former chief Gen. Ryamizard Ryacudu, whose nomination as TNI chief was overruled by President Susilo Bambang Yudhoyono.

Arms business as a source of military income could be detected from the Indonesian Corruption Watch (ICW) data, which revealed that most of the military's shopping sprees in the period when the U.S. slapped an arms embargo on Indonesia due to its poor human rights record in East Timor were littered with highly irregular transactions. This has continued despite the reform movement, according to the report.

Such a concern surfaced prior to the visit of U.S. State Secretary Condoleezza Rice to Indonesia last month. Human rights groups demanded that Washington delay any assistance to the TNI as it had yet to deliver on its reform pledges, which included its exit from businesses and an end to corrupt practices like inflating the price of weapons' purchases.

Juwono has admitted that the military is badly in need of extra income due to limited defense budget, which covers only one-third of the actual military spending. As the practice has lasted for decades, however, he said efforts to minimize it was the most realistic objective.

The minister has introduced a government-to-government arrangement that will cut the role of brokers down to size as the only sanctioned arms procurement scheme, but it apparently needs time to come into effect fully.

However, we fear the new policy, if enacted, will not stop the unscrupulous business, which has definitely wasted public money, unless a thorough investigation is conducted and justice is upheld against whoever has been involved. The probe into who ordered Sidewinder missiles, handguns and sniper rifles through Hadiyanto and Suharli could mark a starting point in law enforcement.

The fact that Sidewinder is the most widely used air-to-air missile in the West and Indonesia alike, should lead investigators to the orderer.

It may be a coincidence that the two brokers work for the Air Force, which is now taking its turn in holding the TNI chief post.

The Indonesian government will be perceived as feigning ignorance of the illegal arms purchase, which perhaps is only the tip of the iceberg, if it waits for the American court to unveil the truth or adopts a defensive attitude.

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The Jakarta Post Thursday, April 20, 2006

Weapons purchaser claims order was for TNI

Tiarma Siboro, The Jakarta Post, Jakarta

The Indonesian Military (TNI) continues to maintain its weapons purchases have been completely legitimate, despite claims of one of the parties under investigation in a massive arms smuggling operation that it filled orders exclusively for the military.

Indonesian Military Chief Air Chief Marshal Djoko Suyanto told Antara newswire Wednesday that there were no plans to buy Sidewinder missiles last year.

An order for the missiles "would not be from the TNI," he was quoted as saying, adding that such purchases were only done on a government-to-government basis.

However, in a signed written statement, a businessman from Singapore-based PT Ataru Indonesia, a company acknowledged by the government as an Air Force supplier, said he dealt with supplying and purchasing spare parts for U.S.-made military aircraft, including only days after the U.S. restored full military ties last November.

Washington slapped a partial embargo on military cooperation following the 1992 massacre in Dili, East Timor. Joint training officially resumed last year; selling of spare parts for Hercules helicopters was permitted following the 2004 tsunami. Last November's official lifting of the 14-year embargo included allowing sales of lethal military hardware, although the U.S. said it would depend on Indonesia's human rights record.

Hoedaifah Koeddah, a relative of one of the detained Indonesians who are accused by U.S. investigators of plotting an illegal arms purchase, on Wednesday denied allegations the company's activities were illegal.

Hoedaifah took issue with the statement Monday by Defense Ministry secretary-general Lt. Gen. Sjafrie Sjamsoeddin that there was no order from the military. He countered that PT Ataru Indonesia's only customer for its business transactions was the TNI.

In the statement, also signed by his lawyer Tommy Sihotang, he said Ataru purchased military equipment compatible for U.S.-made military aircraft, such as F-5 and F-16 jet fighters as well as Hercules transport carriers, from "a third party".

He cited documents that one of Ataru's business partners was Detroit-based Orchard Logistic Service (OLS), and said the company took steps to facilitate payment through local banks. Due to the embargo, he said Ataru set up two Singaporean-based companies, Indodial Pte. Ltd and Eastar Logistic Pte Ltd.

"Such transactions are labeled black market activities because they have never been officially published," Hoedaifah told The Jakarta Post and Kompas daily at his office in South Jakarta.

Indonesians Hadiyanto Joko Djuliarso, who is a relative of Hoedaifah, and Ignatius Ferdinand Suherli, co-partners of Ataru, Singaporean Ibrahim bin Amran and Briton David Beecroft, were detained on April 9 by U.S. investigators in Honolulu for allegedly trying to purchase 245 Sidewinder missiles, 882 Heckler & Koch (HK) MP5 guns, 880 HK 9mm handguns, 16 HK sniper rifles and 5,000 rounds of ammunition.

The alleged illegal transactions took place when the company was involved in a US$600,000 contract with the Indonesian Air Force for the purchase of an aviation radar.

Defense Minister Juwono Sudarsono said Monday the partnership with Ataru, who he characterized as a "recalcitrant" business partner, would be reviewed.

The contract on the procurement of the radar shows it was approved on Nov. 30, 2005, when the embargo for lethal military hardware had been lifted for a week. A copy of the document shows the contract involved then top-ranking TNI officials and Ataru's subsidiary company Indodial.

Two middle-ranking Air Force officers -- identified by Air Chief Marshal Herman Prayitno as Lt. Col. Hadi Suwito and Lt. Col. Edi Supriyanto -- accompanied Hadiyanto for final rechecking of the aviation radar at its storehouse in Honolulu, but the U.S. investigators have released the two officers without questioning.

Herman said the two officers were invited during the display of HK MP5 guns at its storehouse, "but my officers were the passive parties at that time".

He acknowledged the Air Force had proposed the procurement of Sidewinder missiles in 2004, but the project had been dropped because of the U.S. embargo.

Prior to their arrest, Djuliarso and Amran had already transferred more than $455,000 from Asia to the United States, U.S. investigators say.

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Joyo Indonesia News Service
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