Thursday, January 13, 2005


US corporations that have funded and lobbied for strong US ties to the Indonesian military (TNI) since the days of Suharto are now making plans to play a major role in Aceh’s reconstruction. The man leading the corporate relief effort, in Indonesia and more widely in Asia, will be Richard Holbrooke, who left behind a sordid record in the region when he served during the Carter administration as Assistant Secretary of State for East Asia and the Pacific.

Holbrooke, now a top executive with Perseus LLC, a private equity fund, is chairman of the Asia Society, a New York-based club funded by Asian-based corporations and former high-ranking diplomats. Last Friday, January 7, Holbrooke presided over a teleconference call with members of the Asia Society and the United States Indonesia Society (USINDO), a Washington group funded by the largest US investors in Indonesia. According to USINDO, which is sending out daily e-mails to its corporate members about the situation, the primary focus of the meeting was to prepare for the “phase II recovery” that will follow the immediate post-tsunami relief efforts. In addition, the Asia Society “is endeavoring to serve as a clearing-house for private sector and NGO initiatives aimed at the reconstruction effort, reconstitution of infrastructure in the disaster areas, and keeping awareness of the longer term challenges before the public.” One of those initiatives is likely to be a “private sector summit” in Washington this April to “generate long-term assistance” to Aceh. USINDO said it will play a leading role in these efforts.

Holbrooke will speak about tsunami aid today in Washington with Jan Egeland, the UN undersecretary-general for humanitarian affairs and emergency relief coordination.

To be sure, Aceh needs all the assistance it can get right now, and quibbling about its source may sound unseemly when the need is so great. But with the corporate-friendly TNI reasserting its control over Aceh, as reported yesterday, long-term development is likely to become a cover for even deeper corporate penetration into Aceh. Moreover, with Bush’s “rebuilding Iraq” project collapsing in the face of the massive insurgency, many of the same companies that made big bucks off the war in Iraq – the Halliburtons and Bechtels of the world – could see in Aceh another opportunity to contract their way to even greater wealth. Why worry about human rights when there’s so much to rebuild?

Let me answer that question by taking a closer look at Richard Holbrooke and the US Indonesia Society (I’ll leave the Asia Society alone for now).

Holbrooke was the country’s top diplomat in Asia in the late 1970s, just after President Suharto launched his vicious invasion of East Timor and during a time of considerable tumult in the Philippines and South Korea. During his term, the United States became the primary supplier of military hardware to Suharto as he suppressed the Timorese resistance and then starved the people into submission. Holbrooke’s role in Indonesia was summarized in a 1999 article in Z Magazine by Sunil Sharma.

In that article (, Sharma notes that, after Indonesia’s invasion, the United States imposed an arms ban on Indonesia, from December 1975 to June 1976 (Carter was elected that November). But the ban was a secret – “so secret that the Indonesians were unaware of it. The fraud was later exposed by Cornell University professor Benedict Anderson in his testimony before Congress in February 1978. Anderson cited a report, "confirmed from the Department of Defense printout", showing that there never was an arms ban, and that during the period of the alleged ban the US initiated new offers of military weaponry to the Indonesian.” Here’s what Anderson said:

If we are curious as to why the Indonesians never felt the force of the U.S. government’s "anguish," the answer is quite simple. In flat contradiction to express statements by (US officials) and Assistant Secretary of State for East Asian and Pacific Affairs Richard Holbrooke, at least four separate offers of military equipment were made to the Indonesian government during the January-June 1976 "administrative suspension." This equipment consisted mainly of supplies and parts for OV-10 Broncos, Vietnam War era planes designed for counterinsurgency operations against adversaries without effective anti-aircraft weapons, and wholly useless for defending Indonesia from a foreign enemy. The policy of supplying the Indonesian regime with Broncos, as well as other counterinsurgency-related equipment has continued without substantial change from the Ford through the present Carter administrations.

Sharma reported that by late 1977, well into Holbrooke’s term, “the Indonesians literally began to run out of weapons in its campaign to destroy the Timorese.” The Carter Administration even “stepped in and increased military aid and weapons sales to the Indonesians, which resulted in Indonesia’s stepped up campaigns of 1978 to 1980 when the level of killing reached genocidal levels.” Holbrooke was later asked by Australian reporters about those atrocities. He responded icily:

I want to stress I am not remotely interested in getting involved in an argument over the actual number of people killed. People were killed and that always is a tragedy but what is at issue is the actual situation in Timor today . . . [Asked about how many Timorese were killed in the past] . . . we are never going to know anyway.

So much for respect for human rights.

And what about USINDO? Behind a thin veneer of cultural exchange, it has been a cover for private, informal lobbying by US companies eager to keep US aid flowing to the Indonesian military despite its long history of repressing its own people. It was chaired during the 1990s by Paul Wolfowitz, who was US ambassador to Indonesia during the 1980s after taking Holbrooke’s job at State following the election of Ronald Reagan in 1980. At the time Wolfowitz was affiliated with USINDO, several representatives of Indonesia’s intelligence and military forces also sat on USINDO’s board (if you’re still with me, you might want to read a piece I wrote just before Wolfowitz came to office that described the similarities between “Wolfowitz of Arabia” and Holbrooke -

Here is how I described USINDO in a front-page article in the Journal of Commerce in 1996:

The society does no lobbying. But it is funded by major U.S. oil, mining, financial services and pharmaceutical companies with strong economic and political connections to Indonesia. "Our long-range goal is a better understanding of the U.S.-Indonesian relationship," said Edward Masters, the society's president and U.S. ambassador to Jakarta during the Carter administration. It was founded in 1994, when "all you heard about was problems over East Timor and labor rights," he said.

The companies represented by the society share a deep interest in maintaining smooth ties with the (then) Suharto government in Jakarta. They include Mobil (now Exxon-Mobil), the lead contractor in a $40 billion natural gas project in Sumatra; Freeport-McMoRan Inc., which owns the world’s largest gold mine on the island of Irian Jaya; and General Electric Co., which heads a $2.2 billion consortium building a huge coal-fired power plant in East Java. (I’ll post the entire article here tomorrow).

Masters is now the co-chairman of USINDO. Sharma’s article in Z-Net contains a masterful description of how Masters responded to the horrors that occurred in East Timor during Indonesia’s reign of terror:

In September 1978, US Ambassador to Indonesia Edward Masters went to East Timor accompanied by an entourage of Indonesian diplomats. While there, Masters visited refugee camps -- really concentration camps -- that the Timorese had been herded into by the Indonesians and then subjected to a forced starvation policy. According to one US reporter who was there, Masters "came away so shocked by the conditions of the refugees that they immediately contacted the governor of East Timor . . . to explore the possibilities for providing foreign humanitarian assistance." However, it would not be until a full nine months had passed that Masters (in June 1979) would urge the US to provide humanitarian assistance. The timing of Masters’ silence coincided with Indonesia being bolstered by a huge shipment of US military aid and weapons described above.

Sharma quotes again from Ben Anderson’s testimony before Congress in 1980:

In other words, for nine long months, from September 1978 to June 1979, while "in ever increasing numbers the starving and the ailing, wearing rags at best, drifted onto the coastal plain" (according to the New York Times) Ambassador Masters deliberately refrained, even within the walls of the State Department, from proposing humanitarian aid to East Timor. Until the generals in Jakarta gave him the green light, Mr. Masters did nothing to help the East Timorese, although Mr. Holbrooke insists that "the welfare of the Timorese people is the major objective of our policy towards East Timor.”

A recent issue of USINDO’s newsletter lists several new members, including Newmont Mining, which recently admitted to releasing mercury into the environment at one of its Indonesian gold mines but denied any health impact – see One of its most influential members is Freeport McMoran, which operates the world’s largest copper mine in Papua, Indonesia, and has paid the TNI millions of dollars to guard its property. As I reported last year in Mother Jones, even the murder of two Freeport employees, allegedly at the hands of the military, hasn’t kept Freeport from deepening its ties with the TNI.

Companies like Freeport have two purposes in Indonesia: exploiting Indonesian resources and labor, and maintaining smooth relations with the TNI and the government so they can continue that exploitation. Their sudden concern for the welfare of the people of Aceh has money written all over it.


All of this comes on the heels of announcements from two major corporations of their donations to tsunami relief. USINDO member Exxon Mobil, which operates a huge oil and gas facility on Aceh that is guarded by the TNI, said last week it will donate $5 million. And on January 11, the California oil giant Unocal said it will provide an additional $3 million. Unocal, readers will remember, agreed last month to settle a lawsuit brought by the International Labor Rights Fund on behalf of 15 Burmese villagers who claim Unocal was responsible for forced labor, rapes and a murder committed by soldiers along the route of a natural gas pipeline built by Unocal with assistance from Halliburton.

The Fund is now involved in a similar suit against Exxon Mobil concerning its Aceh operations (see news of the lawsuits at In a remarkable study published in 1999 by the Inventory of Conflict and Environment Group at American University, researcher Jeremy Schanck explained how the oil giant, despite its “good deeds,” is so disliked by the people of Aceh:

Exxon Mobil has built mosques, schools, hospitals in Aceh,
and has also contributed to several local charities. However, these good deeds
were significantly undermined in November 1998 when a mass grave containing
Acehnese rebels was discovered within the grounds of the PT Arun liquefied
natural gas (LNG) refinery site. Exxon Mobil, Pertamina (The Indonesian national
oil company), and a Japanese firm jointly own PT Arun. The discovery of the
grave not only incensed the Acehnese, but also focused intense scrutiny on the
Exxon Mobil's operations by international human rights watchdogs. (Read the
study here:

As the real Mother Jones told us: “Let’s pray for the dead and fight like hell for the living.”