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Progressive Magazine, May 1997

Editor's Note by Matthew Rothschild

When the Clinton fundraising scandal broke, rightwing pundits and party hacks shed crocodile tears for the people of Indonesia and East Timor. William Safire and Haley Barbour, who never had said word one about Suharto's repression before, made themselves out to be champions of the suffering people in that archipelago.

This hypocrisy is annoying enough. But more annoying still is the way the media have presented the Lippo Group in isolation from U.S. corporations.

The special issue of The Progressive this month is an effort to set the record straight.

Eyal Press not only skewers Satire and Barbour, he demolishes the claim that it was just the Lippo Group that was trying to distort U.S. policy toward Indonesia. Along with Jennifer Washburn and Ben Terrall, Press demonstrates that the real Suharto lobby consists in large part of powerful U.S. corporations that see Indonesia as a profit playground.

These corporations are worried that a handful of U.S. activists--led by the East Timor Action Network and investigative reporter Allan Nairn--will overturn the U.S. policy of constant support for Suharto. Nairn and Amy Goodman were brutally beaten by Indonesian soldiers in the November 1991 massacre in Dili, East Timor. This massacre, which cost 250 lives, sparked protests that led to a cut-off of U.S. military-training aid for Indonesia.

Indonesian and U.S. corporations were terrified of a change in policy. And so these corporations ponied up resources to buy insurance for their investments.

"They had to ensure U.S. support for Indonesia," Nairn says. "Lippo was important, but more important was the role of U.S. corporations" in making the Clinton Administration toe the Suharto line.

I'd like to thank the Fund for Investigative Journalism, Inc., for helping to underwrite the Indonesia stories in this issue.

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By Eyal Press

(Eyal Press is a freelance writer in New York. He wrote "Jim Bob's Indonesian Misadventure" in the June 1996 issue.)

On December 10, 1996, the day the Nobel Peace Prize was jointly awarded to Bishop Carlos Ximenes Belo and Jose Ramos-Horta of East Timor, the Indonesian government held a meeting at the National Press Club in Washington. There, standing before a podium in a room full of reporters, Arifin Siregar, the Indonesian ambassador to the United States, delivered a smoothly worded address downplaying Indonesia's human-rights abuses in East Timor and urging Americans not to judge the Suharto regime by its past actions. "We learn from our mistakes," he said.

Following the speech, an Australian reporter turned attention to the question of lobbying, asking Siregar what role was being played by a Washington-based group called the U.S.-Indonesia Society. There was a moment's pause. Then Siregar responded, "It is not a lobbying organization--not at all.... The primary purpose is to improve relations."

Not five minutes later, the focus shifted to the back of the room, where Paul Wolfowitz, a former U.S. ambassador to Indonesia and now a trustee of the U.S.-Indonesia Society, expounded on the importance of America's relationship to the Suharto regime and the sensitivity of the East Timor question. After Wolfowitz finished, the audience heard more of the same from Edward Masters, another former U.S. ambassador to Indonesia, and currently the president of the U.S.-Indonesia Society. "The best thing to do," Masters explained, "is to work with [the Indonesians], not confront them, and to try to find common ground."

As Siregar gazed contentedly at the audience, his message echoed by the prestigious diplomats, it was evident that the meeting had achieved its primary objective, which was to persuade American reporters to go easy on the Suharto regime.

Ever since the Clinton fundraising scandal broke, the U.S. media have flocked to uncover the details of Clinton's relationship to James and Mochtar Riady of the Lippo Group, and John Huang, the former Lippo executive, Commerce Department official, and Democratic Party fundraiser. The speculation is that Lippo, the Riadys, and Huang, through their massive donations and collections, altered U.S. policy toward Indonesia, helping to mute the Administration's concerns about human rights and labor abuses.

But Lippo, the Riadys, and Huang have hardly been acting alone. U.S. corporations, former senior government officials, and Suharto cronies have also played a role. One of their primary channels of influence has been the U.S.-Indonesia Society, a group founded in 1994 by a collection of political and corporate heavyweights. Sponsors of this Society include not only the Lippo Group, but U.S. companies with investments in Indonesia such as Freeport-McMoRan, Texaco, Mobil, Raytheon, Hughes Aircraft, and Merrill Lynch. In addition to former ambassadors Wolfowitz and Masters, the Society's membership list includes George Benson, who was once a U.S. military attache in Indonesia, and President Reagan's Secretary of State, George Shultz, who is the group's honorary co-chair. The U.S.-Indonesia Society also includes Indonesian business leaders and former ministers and generals with close ties to the Indonesian military and to Suharto himself James Riady, for instance, is a trustee.

This is the real Suharto lobby in Washington. It consists of major multinational corporations, Suharto insiders, Indonesian billionaires, and U.S. foreign-policy elites all working in harmony to achieve two shared objectives: downplaying human-rights abuses, and bolstering U.S. commercial, diplomatic, and military support for Suharto.

The U.S.-Indonesia Society describes itself as a nonprofit educational group. "We're here to educate Americans about Indonesia," says Charlie Zenzie, a spokesman for the group. "There is a glaring lack of understanding about the country." But the actual mission is to counteract Suharto's increasingly vocal human-rights critics in the United States. To Jakarta's alarm, these have grown in recent years to encompass major labor unions (including the AFL-CIO), church groups (both Protestant and Catholic denominations), and grassroots organizations. In March, Peace Action, the largest U.S. peace group, held a rousing demonstration at the Indonesian embassy in Washington, where students from around the country held white crosses and called out the names of individuals killed in East Timor with U.S. weapons. Thirty people were arrested.

To counteract these forces, the U.S.-Indonesia Society serves as a sort of P.R. organ for the Suharto regime. Congress is a particular target. The group tries to influence U.S. lawmakers by distributing materials to them, holding occasional briefing sessions on Capitol Hill, and taking Congressional staffers on trips to Indonesia.

At the university level, the group arranges forums on Indonesia, with panels tailored to its ideological agenda, co-funds the prestigious Fulbright scholarship program, and sends college students from across America on summer internships to the country.

Meanwhile, the Society is involved in a massive corporate initiative--backed by Texaco, Freeport, Lippo Bank, and others--to distribute materials on Indonesia to U.S. teenagers (see page 24).

On the Indonesian excursions, Congressional aides get acquainted with high-ranking officials such as foreign minister Ali (who has ascribed the genocide in East Timor to "cultural differences") and minister of technology B.J. Habibi. Staff members also visit the town of Lippo Karawici--built by the Lippo Group. The U.S.-Indonesia Society hosts exclusive receptions, co-sponsored by U.S. corporations, which are attended by the likes of J. Stapleton Roy, current U.S. ambassador to Indonesia.

"We hope they come back with a favorable impression," former ambassador Masters says of the trips. "I feel it's very important that staffers who brief Congress see Indonesia first-hand." Masters says the agenda for such trips is completely open. In a recent Society newsletter, he even nods toward some of Indonesia's problems, noting that Congressional visitors may be exposed to "continued poverty, limited outlets for popular expression, East Timor."

But the pro-Suharto message of the trips is clear. Masters has long been an apologist for Suharto. Back in December of 1979, as then-U.S. ambassador to Indonesia, Masters informed a U.S. House Committee that the mass starvation in East Timor was a legacy of Portuguese rule, not Indonesian occupation, a line he repeated when interviewed.

"The people of East Timor were left in desperate poverty when the Portuguese left," he explained. "So Indonesia moved in.... Economically, I think they've done very well."

Asked about the 200,000 people who have been killed in the process, Masters replied sharply, "Nobody who knows anything about East Timor would accept that figure." According to Masters, the actual number is "perhaps 30,000, mostly from malnutrition and starvation."

In fact, the most careful demographic analysis, performed by James Dunn, former Australian consul general to Dili, concludes that the figure 200,000--one-third of the population--is in the right vicinity, though one Indonesian official told him it was too low.

Masters's relations to the Suharto regime--like those of many of the U.S.-Indonesia Society's members--go way back. In 1965, when Suharto came to power by massacring as many as 500,000 Indonesians ("one of the worst mass murders of the twentieth century," according to the CIA) Masters was serving as head of the political section at the U.S. embassy in Jakarta. He admitted in 1990 that the Embassy supplied the names of thousands of communist leaders to the Indonesian Army, which then hunted down and killed them. "Oh sure.... We knew where the names were going," he told journalist Kathy Kadane in an article that appeared in The Washington Post. Today, Masters recants the testimony he gave to Kadane. "She put two and two together to get sixteen," he says.

Other members of the U.S.-Indonesia Society have also lent Suharto a hand. One of the group's chief financial sustainers and trustees is Roy Huffington, a Texas oilman who made his fortune in natural gas by teaming up with Pertamina, the Indonesian state oil company, which is partially controlled by the Indonesian military.

Back in the early 1980s, Huffington's Texas oil company, Huffco, made eight separate shipments of torture equipment--shock batons, handcuffs, billy clubs, fingerprint kits--to the Suharto regime. The shipments were illegal, and the Commerce Department gave Huffco a $250,000 slap on the wrist.

On the board of trustees of the U.S.-Indonesia Society are numerous Suharto cronies, including Sumitro Djojohadikusumo. For years a minister in Suharto's cabinet, Sumitro is known as the "grand old man" of the Indonesian economic community--a senior architect of economic policy under Suharto who has, over the years, used his family to erect an influential power bloc within the ruling oligarchy. ("I have never met a person with so much natural intelligence," he has said of Suharto.) Recently, with pro-democracy riots spreading throughout Indonesia, Sumitro issued dire warnings of a "crisis of authority," which he believes "can be resolved with a strong show of political will."

Sumitro's own son, major general Prabowo Subianto, is well positioned to carry out such a task. Trained in the United States--he was first in his U.S. Special Forces officer class, according to a profile in Jane's Intelligence Review--Prabowo is married to one of Suharto's daughters and heads the Indonesian army's notoriously brutal special forces, Kopassus. His specialty has been putting down rebellions and directing combat units in Indonesia's so-called hot spots, meaning Aceh, East Timor, and Irian Jaya.

Another son of Sumitro, Hasim, is also a trustee of the U.S.-Indonesia Society. Hasim heads a $3 billion business conglomerate with interests in Indonesian energy, cement, petrochemicals, and banking. And Sumitro's daughter Bianti Djiwandono is a Society trustee; she is married to the governor of the bank of Indonesia.

The U.S.-Indonesia Society held its inaugural ball in Jakarta on November 1, 1995. The lavish affair was attended by 200 people, including former ambassador Wolfowitz, Sumitro, and representatives of numerous U.S. and Indonesian firms. "There was delicious food and boilerplate speeches about the importance of what was being started ... with assurances that this was not a P.R. operation," says one partygoer who wishes to remain anonymous.

The launching of the new group did not go unnoticed. The Jakarta Post, which frequently echoes the Indonesian government's line, printed a glowing editorial about the U.S.-Indonesia Society, noting the group's importance "in view of the absence of a strong Indonesia lobby in the United States."

The Clinton Administration has also welcomed the group. "The United States-Indonesia Society can play an important role in promoting the broad, informal mutual understanding that must underpin long-term cooperation," Ambassador Roy said about a year later at an exclusive Jakarta dinner in his honor. This one was sponsored by the Lippo Group, Freeport-McMoRan, Mobil, and GE. Lauding his hosts as "exceptionally knowledgeable and sympathetic," Roy explained that U.S. policy should "not become dominated by too narrow viewpoints." Roy went on to congratulate the group for having recently "sponsored its first Fulbright-USINDO scholar," saying he hoped "American and Indonesian companies will do the same."

Ron Brown, former head of the Commerce Department, attended the opening of the U.S.-Indonesia Society in 1994 in Washington. He was joined by other American officials, including Winston Lord, who until recently was the State Department's leading voice on Asia.

The U.S.-Indonesia Society claims to distribute information that is "authoritative and nonpartisan." That's "outrageous," says Jeff Winters, an Indonesia specialist at Northwestern University. "They sent me the latest Indonesia Source Book produced by the NDIO [Indonesia's National Development Information Office]. NDIO was established back in the 1970s with [P.R. company] Hill & Knowlton, and they wrote all the speeches in English for Indonesian ministers to speak in front of people."

The 1996 NDIO Source Book contains a glowing overview of Indonesia's economic performance, cleansed of references to endemic corruption, inequality, and massive labor repression. A note on the cover included a U.S.-Indonesia Society order form and a message from Edward Masters, who said he was "pleased to forward" this "useful" guide.

The guide is, in fact, "useful" for one very particular reason: It bolsters the myth that Suharto has orchestrated an economic miracle in Indonesia, modernizing the country while lifting the masses out of poverty. This theme runs through the U.S.-Indonesia Society's newsletters, the talks it sponsors, and the publications it distributes.

One such booklet is called Economic Policy Under President Suharto: Indonesia's Twenty-Five Year Record. It paints a bright picture of the Indonesian economy, claiming that problems of corruption and military rule are "exaggerated," and not mentioning human-rights or labor abuses. In the preface, Masters comments on the regime's economic record: "This has been a very human endeavor--one that is almost as rare as a miracle."

To celebrate Indonesia's fiftieth year of independence, the group helped sponsor a dinner in October 1995 in Washington. The dinner was held at the CARE foundation, in honor of Suharto and in celebration of a half century of progress. At that dinner, Freeport CEO James ("Jim Bob") Moffett introduced Suharto. Masters published an op-ed timed for the occasion in the Journal of Commerce. Under Suharto's stewardship, wrote Masters, "the percentage of the [Indonesian] population living below the poverty line has been slashed from 60 percent thirty years ago to 14 percent today."

This assertion, repeated endlessly by the Suharto apologists and the World Bank, is highly misleading. As the Far Eastern Economic Review recently pointed out, "Jakarta's definition of poverty is questioned by economists. For city dwellers, the poverty line is fixed at a mere 930 rupiah [roughly forty cents] per capita per day; in the countryside, it's 608 rupiah [twenty-five cents]."

Faisal Basri, an Indonesian economist, calculates that 82 percent of Indonesians subsist on $30 per month or less. Professor Winters also questions the official figures, in part because, back in 1990, he was on hand when the Suharto regime handed them to the World Bank. "The World Bank lowered its own estimate of the number of Indonesian poor to 30 million (a number Suharto claimed in a speech) so that Suharto would not be offended. The World Bank's original figure was more than two times higher."

In 1994, Indonesia's industrial wages were the lowest in all of Asia, according to a report produced by the investment bank Morgan Stanley (though Vietnam may now lay claim to this distinction). Indonesia keeps wages low by cracking down on labor. It is these low wages, plus the country's abundant natural resources, that attract the corporate leaders of the U.S.-Indonesia Society.

In late 1995, David Johnson of the Center for Defense Information, a Washington-based research group, attended a forum on Indonesia at the Carnegie International Center in Washington that was co-sponsored by the U.S.-Indonesia Society. In attendance was Ambassador Roy and former ambassador to Indonesia (under Reagan) John Holdridge. Speakers included Karl Jackson, a former Defense Department official now at Johns Hopkins, and Masters.

"The main theme of all speakers," Johnson recorded in a memo on the event, "was that the U.S. government, the U.S. Congress, and the U.S. media were all anti-Indonesia and that the tremendous accomplishments of President Suharto had not been understood or appreciated." No one said a critical word about Suharto, Johnson noted. Former ambassador Holdridge did identify "one ray of hope: that American businesses involved in Indonesia might be able to help overcome the existing anti-Indonesia climate in the U.S."

They are doing their best. In March, a 100-strong delegation of U.S. business leaders, headed by former U.S. Secretary of State Alexander Haig, visited Jakarta to proclaim that the country's recent political riots are "not a problem." "I'm very optimistic," Haig said of Indonesia.

One week later, on March 23, the Indonesian military cracked down on peaceful protesters at the Mahkota Hotel in Dili, East Timor. According to Amnesty International, which issued an emergency alert, eleven youths were taken to a military hospital, and the security forces detained at least forty-eight others. Protesters allege that the military blocked their exits, beat them, and fired rubber bullets at them.


By Eyal Press

Never underestimate the power of partisanship to alter the consciousness of America's pundits and policymakers. In the final months of 1996, soon after the Clinton-Riady-Lippo scandal broke, rightwingers throughout the media and political establishment suddenly became champions of human rights for the people of East Timor, whose plight had until then gone unnoticed in both official Washington and among the punditocracy. For some, this meant breaking twenty years of silence on the subject; for others, it required a dose of amnesia to block out their own complicity.

Former Nixon speechwriter and New York Times columnist William Safire may have experienced the greatest epiphany. On October 7, 1996, in his first-ever Times column on the subject, Safire described East Timor as "a human-rights hellhole," this in the context of discussing Webster Hubbell's visit to the island and the Clinton Administration's financial ties to James and Mochtar Riady of the Lippo Group.

"The Riadys gained much face in Indonesia in 1993, helping the Clinton Administration lose interest in labor abuses in East Timor," Safire fumed. Having, like so many others, ignored the issue for more than two decades, the normally well-versed Safire got the facts wrong. The "labor abuses" condoned by the Clinton Administration had been taking place in Indonesia, not East Timor (the latter is a prison-island that barely has a labor market). Safire also referred to "Indonesia's East Timor"--an unfortunate use of the possessive by the master linguist and wordsmith, who may not be aware that Indonesia's annexation of the island is illegal and still not recognized by the United Nations.

In the weeks that followed, Safire turned again and again to the human-rights situation in Indonesia, penning columns on October 14, October 17, and November 28, and pointing once more to "labor abuses in East Timor."

For all his indignation, the pundit has yet to connect East Timor's deplorable condition to his friend and one-time colleague Henry Kissinger, who back in 1975 gave Indonesia U.S. permission to invade East Timor, and continues to nurture a relationship with the Suharto dictatorship, earning hundreds of thousands as a consultant to U.S. corporations with interests in the country. He also regularly visits Indonesia.

Another sudden convert to East Timor's cause was that consummate friend of democracy, Oliver North. On his own radio program and on a CNN panel hosted by Larry King, North scolded the Clinton Administration for arranging arms shipments to an abusive Third World junta behind the American public's back.

North told CNN it was wrong for Clinton to be "taking money from Indonesians, selling F-16 jets to a country that has human-rights abuses writ large all over their record." North neglected to mention that his hero and former employer, Ronald Reagan, supplied Suharto in the same manner when he was in office (not to mention a certain Ayatollah).

Even Crossfire co-host Robert Novak managed to work up some indignation over abuses by the Suharto regime in East Timor. Unlike North or Safire, though, Novak could not hide his distaste for the task: "Bill," he chortled to his liberal CNN counterpart, Bill Press, "as a good liberal I am sure you're very upset about this brutal Indonesian regime's slaughter of hundreds of thousands of people in East Timor."

No newspaper editorial board has taken up East Timor's cause more avidly since the Clinton scandal broke than the Moonie-run Washington Times. The paper has published nearly a dozen op-eds and unsigned editorials in recent months excoriating Clinton for taking Lippo's money and turning his back on human-rights abuses in East Timor. Things were not always this way.

In November of 1994, in an editorial on Clinton's foreign policy, the paper scoffed at the notion that, after Rwanda and Haiti, the President would "next week" be preoccupied with "East Timor, which may be a nasty place to live these days, but is not exactly a vital U.S. interest." (To its credit, however, the paper's news section did run an informative, detailed story on East Timor in the summer of 1996, months before the Clinton fundraising scandal erupted.)

On NBC's Meet the Press, meanwhile, East Timor's cause was embraced by Republican National Committee Chairman Haley Barbour. "Now that all these millions have gone through [from Lippo to Clinton]," Barbour railed, "Mickey Kantor stops the investigation on human-rights abuses in East Timor, which has been taken over, invaded, and captured by Indonesia, and a third of the population, 95 percent Roman Catholic ... has been exterminated." Not bad for a quick review of the demographics, only Barbour had evidently been reading Safire: Mickey Kantor halted an investigation of human-rights abuses in Indonesia, not East Timor. Barbour said, "There was a quid pro quo, and the quo is billions, F-16 fighters for Indonesia ... billion dollars of contracts for the cronies of all of these people ... genocide in East Timor." Barbour didn't add that it was a Republican President, Gerald Ford, along with Henry Kissinger, who gave the go-ahead to the invasion.

During the 1996 campaign, Bob Dole began discovering East Timor, too. Dole campaign manager Scott Reed even issued press releases instructing the media to scrutinize Clinton's "ties to the military junta that has slaughtered hundreds of thousands in East Timor." It was an act of true desperation, in that it begged the question of what Dole himself had ever done for the East Timorese.

In fact, quite a bit. In 1994, the Senator helped kill legislation barring the use of any U.S.-supplied weapons in East Timor. Senator Russell Feingold, Democrat of Wisconsin, had helped craft the provision Dole killed. "Senator Dole not only did nothing to help us, he actively weighed in against the people of East Timor when the votes were being counted," Feingold said. Undaunted, a Dole campaign official in Orange County picked up the phone and rang the East Timor Action Network to see if its members might want tickets to an upcoming Clinton event. The Dole campaign said it had good seats right in front of the cameras, ideal for signs and banners. The group turned down the offer.

Newt Gingrich, for his part, held a press conference and declared that "everything the Administration has said about ... Indonesia is now suspect." Gingrich duly called for a suspension of the planned sale of F-16 fighter planes to Indonesia, and, to his credit, invited Nobel Peace Prize recipients Jose Ramos-Horta and Bishop Belo to testify before Congress. But this marked a sudden change of heart for Gingrich, too. He was at the height of his power as House Speaker when Republicans pushed through a restoration of U.S. military-training assistance to the Indonesian regime.

On the left, Noam Chomsky and Edward Herman have been writing about East Timor for two decades. But in the mainstream media, with the exception of Anthony Lewis, there has been next to nothing.

Even today, more than six months into the Indonesian financing scandal, the media have neglected the story. Here are some of the issues they've missed: the Ford-Kissinger role in the atrocities in East Timor; the U.S. corporate connection to Suharto; the impact of U.S. arms sales to the regime; the role of U.S. companies extracting oil in the Timor Gap belonging to East Timor; the massive political crackdown being carried out by the Indonesian government; the jailing of independent labor leaders such as Muchtar Pakpahan; and the stepped-up repression in East Timor since the awarding of the Nobel Peace Prize to Bishop Belo and Jose Ramos-Horta.

Plenty of material for William Safire's next column.

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By Eyal Press

Check your kids' curriculum. For the past two years, students in classrooms across America, grades seven through twelve, have been learning about the wonders of Indonesia, courtesy of the Lippo Bank, the U.S.-Indonesia Society, the Indonesian government, Mobil, Texaco, and a host of prominent U.S. and foreign corporations with intimate ties to the Suharto regime.

Introducing Indonesia is a bright, glossy teachers' guide produced by these interests and distributed by Scholastic Incorporated, one of the world's largest education publishers.

It has been sent to more than 77,000 social-studies teachers and their more than ten million students.

The guide is replete with multicolored charts, maps, and suggested lesson plans. It also comes with a full-size, fold-out poster depicting Indonesia as a land of exotic animals, lush rainforests, and modern satellites and industry. Both the poster and the teachers' booklet are adorned with the corporate logos of Mobil, Texaco, Chevron, and the Lippo Bank.

The Indonesian government describes the booklet as an important "step toward international understanding."

Wayne Forrest, president of the American-Indonesian Chamber of Commerce, says the guide will "increase understanding of a country that has long been a solid friend of the United States and a nation that offers a great number of opportunities for American business."

The guide offers teachers handy advice. "Point out to students that some people fear the establishment of open trade between the U.S. and Asia, where labor is so much cheaper than it is here. But a recent Business Week editorial has said: 'Already some three million Americans are employed as a result of U.S. exports to countries of Asia and the Pacific Rim.' "

Teachers are next instructed to have students "look at household and personal items (and inside their sneakers) for a MADE IN INDONESIA label." Sneakers are produced in Indonesia, the booklet explains, not because workers there are paid next to nothing, but on account of another often overlooked comparative advantage--namely, that a "crucial raw material used in manufacturing sneakers [i.e., rubber] is found in Indonesia."

Students also receive geography lessons. On page seven, a map of Indonesia is situated directly above a map of the United States, with all of Indonesia's provinces shaded one color. East Timor is shown in the same color. The map gives no indication that the territory is a separate country that has been illegally occupied for more than two decades.

Another lesson focuses on Indonesia's "natural wonders," including "the world's second largest concentration of rainforests ... [that] host over 500 mammal species." The guidebook fails to mention that one of its corporate sponsors, Freeport-McMoRan, a U.S. mining company, recently had its U.S. government insurance revoked because it "has degraded a large area of lowland rainforest" in the Indonesian province of Irian Jaya, posing "unreasonable or major environmental, health, or safety hazards with respect to ... the surrounding terrestrial ecosystem, and the local inhabitants."

On the inside cover of the teachers' guide is an exuberant thank-you note from Indonesia's minister for industry and trade, Hartarto. He salutes "American and Indonesian private businesses" for their much appreciated "gift to American students and their teachers."

In small letters on page five, the guide expresses further gratitude for advice, counsel, and sponsorship to Mobil, Hughes, Freeport, Lippo, and various Indonesian ministers, including Arifin Siregar, the current Indonesian ambassador to the United States. l

In a recent newsletter, the U.S.-Indonesia Society proudly highlights a touching letter it received from Alex Bowe, a third-grader in Maryland, who requested a copy of its materials. He'll be getting a map in the mail, depicting Indonesia and East Timor as one happily united territory, governed by a "just and civilized humanity" that, as the teachers" guide promises, guarantees "social justice for all."

Ernest Fleishman, a senior vice president for education at Scholastic, says the company has recently decided to stop distributing the material. "Our editorial standard requires us to produce and present information which is factual, accurate, and appropriate.... When you're trying to do sponsored materials, the country's interest and our own conflict."

Maybe Scholastic should point that out to 77,000 classrooms full of American kids.


By Jennifer Washburn

[Jennifer Washburn is a freelance journalist and a research associate at the World Policy Institute in New York City Her article draws from a recent Institute report she co-authored with senior fellow William D. Hartung called "U.S. Arms Transfers to Indonesia 1975-1997: Who's Influencing Whom?"]

The U.S. arms industry, which has sold an estimated $1.1 billion worth of weaponry to Indonesia's military since 1975, has far more influence on U.S. policy toward the Suharto regime than John Huang, the Riadys, and the Lippo Group. But their interests are identical: maintain warm economic and military relations between Washington and Jakarta.

The complicity of the U.S. government and the American weapons industry in Indonesia's illegal occupation of East Timor has persisted through Democratic and Republican Administrations alike.

Two days prior to Indonesia's invasion of East Timor, in December 1975, President Gerald Ford and Secretary of State Henry Kissinger gave the green light to Suharto while attending a state dinner in Jakarta with the dictator. During that same visit, the United States pledged a substantial increase in military aid to Indonesia. U.S. military aid from 1974 to 1976 more than doubled, rising from $17 million to $40 million. U.S. weapons sales to Indonesia from 1974 to 1975 jumped from $12 million to $65 million.

In approving these sales, Kissinger knew he was violating a 1958 treaty between the United States and Indonesia, which stated that imported American weapons must be used strictly for Indonesian "self-defense." But that didn't trouble him. "We can't construe [prevention of] a Communist government in the middle of Indonesia as self-defense?" Kissinger cynically asked State Department officials in internal memoranda, which have since been made public.

Despite its professed concern for human rights, the Carter Administration approved a record $112 million in new U.S. arms sales to Indonesia in 1978. These exports enabled the Suharto regime to consolidate its military occupation of East Timor after its arsenal had been largely depleted in the initial invasion.

That year, Nobel Peace Prize Laureate Jose Ramos-Horta lost three family members at the hands of Indonesian forces armed with U.S. weapons. "My sister Maria Ortensia was killed by a U.S.-made Bronco aircraft that was being used ... for counterinsurgency operations," says Ramos-Horta. "The same year I lost two brothers, Nunu and Guilherme, the first killed by fire from a U.S.-designed M-16 automatic rifle made under license in Indonesia, and the second during a rocket and strafing attack by a U.S.-supplied helicopter."

The Reagan Administration averaged $71 million per year in arms sales to Jakarta, including a 1986 blockbuster deal to provide twelve F-16 fighters at a cost of more than $300 million. During the Bush Administration, sales dropped to roughly $28 million per year.

Now, despite international condemnation of Indonesia for human-rights violations and a political storm brewing in Congress over Indonesian donations to his campaign, President Clinton continues to advocate the sale of up to eleven F-16 fighter planes to Indonesia. This would be the first U.S. sale of major combat aircraft to Indonesia in more than a decade.

If the President has his way-which is looking increasingly unlikely due to Congressional and grassroots opposition-the Clinton Administration will have approved roughly $270 million in arms sales to Jakarta in just over four years. This would represent more than twice the arms sales concluded during the Bush Administration, and, allowing for inflation, would amount to the highest level of U.S. sales since the second Reagan term.

Yet the President has tried to turn his arms-sales record into an asset, arguing that his Administration's decision-following Congressional pressure-to ban small-arms sales to Indonesia proves that there was no foreign influence on his policies. "Indeed, look at the difference in my policy and that of my predecessor," Clinton remarked at a news conference held just after his election on November 8. "We changed our policy on arms sales because of East Timor, not to sell small arms. And we co-sponsored a resolution in the United Nations in favor of greater human rights in East Timor. And I'm proud that we did that. So I can tell you categorically that there was no influence."

But the Administration has flatly contradicted the principle behind its small-arms ban by approving other major weapons exports, which signal continued U.S. support for the Suharto dictatorship.

The U.S. arms industry has been actively seeking greater subsidies to increase weapons exports overseas. Many of these exports will directly benefit countries like Indonesia, which is dependent on massive arms imports. In 1995, according to a recent report by William D. Hartung of the World Policy Institute, the arms industry gobbled up $7.6 billion in federal subsidies to promote and finance U.S. arms exports. This makes corporate subsidies for arms-exporting companies the second largest corporate-welfare expenditure (the first being agricultural price-supports).

The $7.6 billion in federal subsidies for arms exports paid out in 1995 represents more than half the total value of U.S. arms exports in that year. This means that U.S. taxpayers, not foreign governments, are paying for more than half of all U.S. weapons exports.

In October 1994, the arms industry successfully persuaded Congress to allow the Export-Import Bank to provide guaranteed loans for foreign countries to purchase so-called dual-use equipment, amenable to both military and civilian uses. The amendment to the bank's charter-which was drafted by the Aerospace Industries Association, a powerful arms industry trade group-marks the reversal of a longstanding legislative prohibition on Export-Import Bank support for military deals. In late 1995, Indonesia became a major beneficiary of this change when it received a $22 million loan guarantee from the Export-Import Bank to refurbish seven of its U.S.-made C-130 and L-100 transport aircraft, currently manufactured by Lockheed Martin.

In the 1995-1996 election cycle, arms exporters poured more than $10.7 million in PAC donations and soft money into campaign coffers, winning themselves an even bigger prize: a $15 billion loan-guarantee fund. The fund, which Clinton approved will provide extremely favorable loans to any of thirty-seven foreign governments (including human-rights violators like Indonesia and Turkey) to finance the purchase of U.S. weapons systems. If the guaranteed loans are not repaid, U.S. taxpayers will almost certainly be left to foot the bill. The close ties between the arms industry and the U.S. government were starkly manifest at an airshow held in Jakarta in June 1996. During the exhibition, U.S. Navy and Air Force personnel showed off U.S. military versions of the same weapons that American firms were offering to sell including McDonnell Douglas F-15 and Lockheed Martin F-16 fighter jets, a Boeing KC-135 mid-air refueling tanker, and a P-3C naval aircraft. From a carrier wing of the USS Carl Vinson stationed just off the coast, ten planes manned by U.S. personnel flew demonstration flights over the show.

"Participation in the air show demonstrates our commitment to the Pacific region," the Pentagon said, "and enhances military-to-military contacts."

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By Ben Terrall

[Ben Terrall is a San Francisco-based writer and researcher. He reviewed "Surviving Indonesia's Gulag: A Western Woman Tells Her Story" and "East Timor's Unfinished Struggle: Inside the Timorese Resistance" in the February 1997 issue of The Progressive.]

On May 26, 1994, Robert Barry, then-U.S. Ambassador to Indonesia, sent a letter to Christopher Dorval, the vice president for public affairs at the U.S. Export-Import Bank. In the letter, obtained by The Progressive, Barry praises Dorval for "the missionary work you are doing on APEC [the Asia-Pacific Economic Conference]." He then thanks "you all for giving a positive spin not just to U.S. exports, but also to the entire relationship."

Barry expressed the hope that the spinners at the Export-Import Bank could undo the damage of the "blast the Obey Subcommittee of the House Appropriations Committee has leveled at Indonesia over East Timor, which will sting deeply here." (The Obey Subcommittee was dealing with the battle on International Military Education and Training funding -- a U.S.-taxpayer-supported military-training program for Indonesia's troops, which Congress voted to discontinue in the fall of 1992.)

"You can see what a public-relations problem the Indonesians face, and how, if mishandled, this can affect the atmosphere of APEC, bilateral relations-and U.S. business," Barry wrote.

Barry, by the way, sent a copy of his letter along to Mark Middleton, a lawyer who formed CommerceCorp International Inc., and a Little Rock friend of Bill Clinton who worked in the White House. Middleton has been implicated in the campaign-finance scandal for raising money in Asia and for trading on his Clinton credentials.

Middleton twice brought Suharto's daughter to the White House.

Barry was also not shy about enlisting the aid of Suharto's inner circle. "I'll be in touch with Bob Hasan . . . to pass on some ideas."

Suharto crony Hasan, estimated to be worth more than $1 billion, controls plywood, pulp and paper, aviation, shipping, banking, and publishing interests in the country. An Indonesian executive remarks, "If Hasan wants something, he gets it, but he always makes sure the First Family gets its share."

Asked about Hasan's role, Barry told me that he was considering enlisting Hasan's P.R. firm in the effort.

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The Progressive Interview: JOSE RAMOS-HORTA

'Suharto, like most dictators, is inflexible, and doesn't accept dialogue with his own people.'

By Amy Goodman

[Amy Goodman is host of Pacifica Radio's "Democracy Now," a nationally syndicated daily newsmagazine available to public-radio stations around the country. Her radio documentary, "Massacre: The Story of East Timor " is available through the Pacifica Archives at 1-800-735-0230.]

Jose Ramos-Horta is a man without a home, though not without a homeland. He was born in East Timor, a Portuguese colony until 1974, when a coup in Portugal led to the disbanding of its empire. On December 7, 1975, the Indonesian armed forces invaded the newly independent East Timor. The United States supplied 90 percent of the weapons used in that attack.

Chosen by the East Timorese leadership to leave the country just before the invasion, Ramos-Horta headed to the United Nations at the age of twenty-five. He represented his people there for more than a decade. Soon after the invasion, the Security Council responded to the blatant illegality of the occupation by passing resolutions calling on Indonesia to withdraw from East Timor without delay. The United States helped block their implementation, as Daniel Patrick Moynihan, then the U.S. ambassador to the United Nations, would later boast.

During the first week of the invasion, in the East Timorese capital of Dili, Indonesian troops shot thousands of Timorese into the harbor. The victims' loved ones were forced to count them off one by one.

For more than a decade, Indonesia closed East Timor to the outside world, killing one-third of the population, proportionately larger than the Cambodian genocide. Many of those who have survived have been imprisoned and tortured by a military armed and trained by the United States.

East Timor has now been occupied for twenty-two years. For all of this time, Jose Ramos-Horta has traveled the world, talking about the plight of his people. He speaks for CNRM, the National Council of Maubere [translation: People's] Resistance, the umbrella of Timorese groups, which includes the guerrillas and underground resistance inside East Timor, and the diplomatic front outside. Ramos-Horta is the personal representative of Xanana Gusmao, the rebel leader of East Timor who fought in the mountains for eighteen years until the Indonesian armed forces captured him in 1992.

The following year, Ramos-Horta formally presented the CNRM peace plan to the European parliament. The plan calls for a phased resolution of the occupation, beginning with the withdrawal of Indonesian troops, release of political prisoners, respect for human rights, and, finally, a period of autonomy leading to a U.N-supervised referendum in which the East Timorese vote for independence or integration into Indonesia.

This past December. Jose Ramos-Horta was awarded the 1996 Nobel Peace Prize along with East Timor's Bishop Carlos Ximenes Belo. At a White House briefing, I questioned White House press secretary Mike McCurry as to why the President has invited Indonesian mogul James Riady to the White House more than a dozen times but has yet to invite Belo and Ramos-Horta. I asked if it was because they had not made a campaign contribution or because those that have don't want them there. He said there are no plans to invite them.

President Clinton has been attempting to sell a group of F-16 fighter planes to Indonesia and restore full IMET (International Military Education and Training) aid, which Congress cut after the massacre, but his efforts have been thwarted so far by human-rights activists around the country. The F-16s are currently collecting dust at the Davis-Monthan Air Force Base in Tucson, Arizona.

I have visited East Timor three times since 1990. On my third trip in 1994, during President Clinton's trip to Jakarta, I was arrested entering East Timor. Over the years I have come to know Jose well.

Q: Can you talk about the United States' relationship to the occupation of East Timor?

Ramos-Horta: What I know about the United States is that American weapons are used in East Timor against our people, my own relatives. Three brothers, one sister were killed by American weapons. Many other Timorese were wiped out by American weapons.

Q: How were your brothers and sister killed?

Ramos-Horta: One of my sisters-her name was Maria Ortensia-was twenty-one years old at the time in 1977 when two Bronco aircraft attacked a village. There were several hundred kids there, women, children. My sister was a schoolteacher at the time, in an area that was controlled by the resistance. So two Bronco aircraft attacked. They dropped bombs. They fired machine guns. My sister and twenty other kids were killed. These Bronco aircraft were supplied during the Carter Administration. Within a few days of their delivery to Indonesia and their arrival in East Timor, my sister was killed.

A brother of mine, Guilherme, was killed during a helicopter assault with Bell helicopters. Many other people were killed as well. And another brother, Nunu, was captured and shot, killed by the Indonesians using M-16s.

If the United States talks about itself as the exemplar of democracy- well, maybe for Americans. For the rest of the world, in particular East Timor, I don't think it can talk about democracy.

Almost half of my brothers and sisters died. We are a large family, eleven. It is a weird feeling when sometimes I look around and four are missing. Recently I was in Australia for a family reunion. We took some pictures. I looked around and I thought to myself, "Where are the other four? The other four died."

Q: You recently said Suharto is the only one standing in the way of peace. What did you mean?

Ramos-Horta: Well, Suharto, like most dictators, is inflexible, intolerant, and doesn't accept dialogue with his own people. There are many people in Indonesia today who want changes within the military. So I say Suharto is an impediment to peace, to democracy.

Q: Do you think there is anything that would cause him to change?

Ramos-Horta: I hope only that Suharto can be inspired by divine grace and do the unexpected. It has happened in the past, with Gorbachev, with DeKlerk. It could happen also with Suharto.

Q: When Suharto came to the United States, he met with President Clinton. The New York Times did a piece quoting the senior official in the Clinton Administration saying, "Suharto, he's our kind of guy."

Ramos-Horta: Well, sure, Suharto is the U.S. kind of guy. Saddam Hussein at one point was. As Pinochet was, Somoza, Ferdinand Marcos- well, you name it, every dictator in the world has been the American kind of guy.

Q: Do you work at all with the Indonesian democracy movement?

Ramos-Horta: Our fates-the East Timorese and the Indonesian-are intertwined. We share the same experience; we experience the same dictatorship. Indonesians have suffered much longer than ourselves at the hands of oppression, at the hands of dictatorship, so, inevitably, we tend to grow closer.

Q: Do you have any indication that if Suharto were no longer the leader of Indonesia that there would be a change in policy toward East Timor?

Ramos-Horta: Yes, I believe so. Whoever comes after Suharto will have an ample opportunity to change course.

Q: Why would they?

Ramos-Horta: Because they'll be free from the responsibilities of the invasion. They cannot be blamed for what happened in 1975 and the following years. They will have ample opportunity to say, "It is not our fault, it is Suharto's fault." They can blame everything on Suharto, so they can initiate serious dialogue with the Resistance and the East Timorese and change course.

Q: What is the situation in East Timor today?

Ramos-Horta: The brutal occupation remains. Torture has increased. Oppression throughout the country has increased. There has been an enormous crackdown since December; hundreds of people have been arrested. There has been no relaxation on the part of the military.

Q: Has Bishop Belo-your co-winner of the Nobel Peace Prize-suffered any repercussions since winning?

Ramos-Horta: He has had a lot of threats on his life over the years. He has been under a lot of pressure. He's in a most difficult situation. He's a man of extraordinary courage, serenity. He's loved by the people there, and trusted. The Indonesians know that if anything happened to him, the whole country would go into the streets. So maybe that is a warning to the military not to do any physical harm to him.

Q: Speaking of leaders, you're the representative of Xanana Gusmao, who is in prison in Indonesia after being captured five years ago. Do you have any word from him, and what is his condition?

Ramos-Horta: All I can say is that we have some contact regularly. He's in good health and good spirits. He has a lot of visits by other prisoners. Everybody looks up to him as a model of inspiration.

Q: Jose, you've been traveling the world for twenty-two years since Indonesia occupied East Timor in December 1975. You worked for more than a decade at the United Nations. How has winning the Nobel Peace Prize changed your life and your ability to get out the message about East Timor?

Ramos-Horta: First, physically and emotionally, it has been even more strenuous. I'm stressed out, physically. But there's some inner strength, a voice, that pushes me ahead. I have met wonderful individuals over the years. This is the wonderful side of our struggle. And myself and others, we survive. We go along because of the support and friendship of so many people.

Q: You and Bishop Belo won $1 million-you split that prize. What will you do with your portion of the money?

Ramos-Horta: It has gone already to a foundation in Lisbon in tribute to the late bishop of East Timor, who was a man of courage, integrity. And that will provide scholarships to students in Timor, Indonesia, and in Portugal, to promote the struggle abroad.

Q: Why aren't there more women in leadership positions in the Timorese movement?

Ramos-Horta: One reason is that men are the ones who have been able to escape the country. It would be far more difficult for a woman to escape the country. And males in East Timor have had a dominating role for thousands of years. The resistance itself has struggled to change it. Yes, we have extraordinary women underground, in the mountains, and their work is far more important than the job of traveling around the world. And there are some women in Australia and Portugal who have been key.

Q: I've been asking at the White House if they will extend an invitation to you. President Clinton we know has met with corporate executives, arms merchants, and many others. Have you received an invitation to the White House?

Ramos-Horta: No, I have not received any invitation of this sort. I hope only that one day soon enough I will have a chance to meet the President of the United States. I have no ambitions other than an opportunity to talk face-to-face with the President.

I believe he is a good man. If he listens to me, listens to Bishop Belo, he will have a different picture of East Timor. I have met some very good people in the Administration and it's a pity that this dialogue with such good people hasn't taken place before. It should have taken place five years ago. But it has taken place now and I'm grateful for the opportunity. I hope to see the President one day, or Madeleine Albright, the Secretary of State.

Q: What would you tell the President?

Ramos-Horta: I would say that the United States can bring peace to East Timor. It is a golden opportunity. We are not asking the U.S. to intervene militarily to save these people, but rather to use its diplomatic leverage and strong influence to prod Indonesia into withdrawing from East Timor.

Q: Do you think U.S. pressure would make a difference?

Ramos-Horta: It would make an enormous difference.

Q: President Clinton has been continuing attempts to sell F-16s to Indonesia and to resume IMET. What do you make of these efforts?

Ramos-Horta: I don't think it serves any purpose. From the moral point of view, it is objectionable to send weapons of this nature to a military dictatorship. It sends the wrong signal. From a strategic point of view for U.S. interests, I think it is wrong to introduce these weapons into a country that is in turmoil, that is threatening to deteriorate in the next few years.

Q: What do you think activists in this country should do?

Ramos-Horta: Well, I hope that they campaign to increase awareness about East Timor; it is extremely important, vital. There have been some initiatives in Congress by various courageous people, and that must be supported by grassroots work. There have to be more initiatives to keep pressure on the Administration and Indonesia.

Q: Do you think activism in this country has had any effect?

Ramos-Horta: It has had some limited effect. Now it seems like it's going to develop into a full-fledged movement. At least that's my experience in traveling around the country. That would make a lot of difference.

Q: When I first interviewed you five years ago, you said that you expected that East Timor would be free in five years. What do you say today?

Ramos-Horta: Well, maybe I was too optimistic then, but I'm not too far off I believe by the end of the century things will change and East Timor will find peace, freedom. We are calling for self-determination, and for U.N supervision over a process by which the people of East Timor can decide their future. That is a very modest, a very fair request. We are not asking for the moon.




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