CIA NAMES
CORRUPTION, COLLUSION AND NEPOTISM


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JOHN HUANG MEETS THE CIA

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EDISON CEO WRITES RON BROWN FOR A FAVOR

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COMMERCE DEPT. DOCUMENTS ON THE PAITON POWER PLANT



MORE COMMERCE DEPT. DOCUMENTS ON THE PAITON POWER PLANT



OVERSEAS PRIVATE INVESTMENT CORP. (OPIC) PAITON I DOCUMENTS



COMMERCE DOCUMENTS ON PAITON I AND "INCENTIVE" MONEY



MORE WHITE HOUSE DOCUMENTS & FIRST FAMILY DEALS


WARREN CHRISTOPHER & THE SUHARTO POWER SCAM

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EDISON CEO WRITES RON BROWN FOR A FAVOR




Power Corrupts
Edison Indonesian power deal blows financial fuse

By Charles R. Smith "SOFTWAR"

The residents of California are suffering from a blackout. Not one of electric power but of the news. The mainstream media, including Time/CNN, continue to maintain the recent spate of financial short-circuits inside California's energy grid are all due to state economic and environmental regulations. Nothing could be further from the truth.

In 1994, Edison Mission Energy landed a trade trip with Ron Brown to Indonesia. As a result of that trip, Edison also ended up with a contract to build the Paiton I coal fired power plant. Paiton I was billed as the first "private" electric plant in Indonesia. In 1994, "private" ownership in Indonesia equated into owned and operated by the Suharto "First Family."

The partners in the Paiton I consortium include Edison Mission Energy, Mitsui & Co., Ltd. of Japan, General Electric Capital Corporation, and P.T. Batu Hitam Perkasa. Just by co-incidence, of course, PT Batu was owned by Indonesian dictator Suharto's youngest daughter, Titek Prabowo and her brother-in-law, Hashim Djojohadikusumo.

According to the Commerce Dept., ".75%" of the Paiton project was reserved for Suharto's daughter Prabowo, or an instant $15 million in cash. Her share, along with a cut for "brother-in-law" Hashim and various other Suharto relatives, was to be provided up front, in cash, in the form of a $50 million loan. The $50 million loan was to be paid back by the profits or dividends from the power plant.

The documents show that Edison officials were aware of the $50 million destine for Suharto's daughter. Newly released documents also show that Edison Chairman John Bryson actually pressed the Secretary Ron Brown to support the $50 no-pay back loan.

Federal Election Commission records show that Mission Energy CEO John Bryson donated money to the Clinton/Gore campaign and contributed money to President Clinton's legal defense fund. In 1994, Bryson also wrote a personal letter to Brown, pressing for quick approval of the $50 million U.S. government backed loan.

Dear Ron," wrote John Bryson, then Chairman of Southern California Edison. "I am writing to request your support of the application of the Paiton Private Power Project in Indonesia for funding by the Asian Development Bank (ADB)."

"We have applied to the ADB for $50 million of funding as part of a $1.9 billion financing package. The bulk of the funds will come from a group of commercial banks, the U. S. Export Import Bank and Japan Ex-Im," noted Edison CEO Bryson.

"I would greatly appreciate it if you would indicate your support for ADB funding of this project. With that in mind, enclosed is a draft letter to Ambassador Linda Tsao Yang, U.S. Executive. Director of ADB, for your consideration."

The U.S. Commerce Department was not the only agency to take notice of Edison's special contract with Suharto's daughter. In 1994, agents from the Central Intelligence Agency met with China-Gate figure John Huang on the Paiton Power Plant. The 1994 meeting between the intelligence agency and Huang included detailed information about the $2.6 billion Paiton electric power plant for Indonesia.

According to the documents, CIA agents Bob Beamer, Chris Crosby, Lia Fidas and Nancy Goldcamp attended an August 1994 "TPCC" or "Trade Policy Coordinating Committee" meeting with John Huang. The subject of the CIA meeting was U.S. government financed trade deals that contained "first family involvement" or illegal payments made to relatives of then Indonesian dictator Suharto.

A 1994 Commerce Department report found in Huang's files noted that the Indonesian "Paiton" power plant had encountered difficulties with financing because the "Asian Development Bank (ADB)" knew it contained money for a Suharto family member.

"ADB had raised concern about first family involvement during its consideration of the $50 million financial portion," states the Paiton Project document found in Huang's files.

"Ambassador Barry stated that the project is facing two problems (i) the ADB financing may cave in and (ii) EXIM financing. Regarding ADB, technical questions have been satisfied, but ADB is skiddish about involvement of Indonesia's first family (a minority shareholder is married to Pres. Suharto's daughter)."

In addition, 1994 documents provided by the Overseas Private Investment Corporation (OPIC) noted that Suharto's daughter Prabowo and her brother-in-law, Hashim Djojohadikusumo, were given a total "2.5%" ownership in the U.S. sponsored power project, through their local company BHP.

"ADB is still considering this, b/c of very minimal involvement of Indo ruling family in the Mission project... ADB's delay revolves around concern for projects in Indonesia involving the first family. .75% ownership of the Mission project by daughter of Indo pres."

Directly after meeting with the CIA on the known Suharto "first family" involvement inside the Edison Paiton power project, Huang proceeded to place a three hour call to his former employer, the Lippo Group. In 1999, John Huang pled guilty to Federal charges of making illegal political contributions to the Clinton/Gore campaign. Huang took the Fifth Amendment more than two thousand times when asked by Judicial Watch if he had ties to Chinese intelligence.

In the end, the Asian Development Bank turned down Edison's $50 million loan deal, forcing the company to obtain the loan financing from commercial banks. Curiously, many secrets still surround the Edison coal fired power plant in east Java. The U.S. State Department maintains that some information on Paiton must remain classified.

"The information in the one document withheld in full and in the deleted portions of the sixteen other documents withheld in part is properly classified in accordance with Executive Order 12958 (National Security Information) despite the passage of time. Its release reasonably could be expected to cause damage to the national security of the United States," wrote Ambassador Francis McNamara in November 2000.

One partly blacked out cable from the State Department is titled "on power projects, corruption, draft laws." The December 1998 cable, a discussion between U.S. Ambassador Roy and an individual whose name was withheld, states that the individual "stressed that solutions to the problem must be simple to convince 'the people' that corruption, collusion and nepotism ('KKN') are being dealt with properly."

During the 1990s, U.S. government officials were keenly aware of the rampant corruption inside Indonesia's electric power producers. In October 1998, U.S. Ambassador J. Stapleton Roy wrote in a diplomatic cable that he had recently met with Indonesian Director General of Electricity Endro Utomo Notodisoerjo. Endro, according to the cable, was more than honest about criminal activity.

"Commenting on corruption, collusion and nepotism (KKN), Endro said that in the past there was no separation between 'power' (not electric but former first family power) and business. 'All the IPP's have a relation with power, and it is still going on,' added Endro."

However, the real key to the Paiton power project is the ultra-clean coal - then mined from only two places on earth, Indonesia and Utah. Toward that end, Brother-in-law Hashim received an exclusive, no bid, no-cut contract to supply the clean coal to the Paiton power plant.

According to State Department cables, Hashim's coal price also exceeded the price of the electricity produced at the Paiton power plant. Hashim's no-cut contract was characterized as the "Achilles heel", driving Paiton into debt with each kilowatt produced. Of course, no profits from the power plant also meant zero dividends. Suharto's daughter and Hashim never had to pay back the instant $50 million loan because Paiton was intended to fail even before it opened.

Hashim's financial backer in his Indonesian coal mining business is Moctar Riady and the Lippo Group. In 1996 President Clinton issued an executive order creating the 1.7 million-acre Grand Staircase-Escalante National Monument in Utah - making the only other known "low sulfur" deposit off limits for commercial mining. Thus, Lippo obtained control of the world's only low sulfur coal mine.

Edison is also partner of Indonesia's Lippo group; a consortium part-owned by Indonesian billionaire Moctar Riady and a front company for Chinese military intelligence, CRE or China Resource Enterprises. The son of Lippo founder Moctar Riady, James Riady recently pled guilty for passing illegal donations to the Clinton/Gore political campaigns.

In 1999, PLN acquired the documents cited here that stated Clinton administration officials were aware of "corruption, collusion and nepotism" inside the electric power trade deals made with Indonesia. PLN used the documents to win a lawsuit against the Clinton administration, charging that U.S. officials knew the Paiton power plant contract was "corrupt from the beginning."

In December 1999, an Indonesian court ruled that the entire $2.6 billion dollar Edison Paiton power plant contract was illegal. The Indonesian Courts ruled, based on the documented evidence presented here, that the multi-billion dollar electric deal with Edison was corrupt from the beginning. The state Indonesian Power Company PLN estimated that it had lost over $18 billion in total from Suharto corruption inside U.S. government sponsored power plant contracts.

If Californians are going to be stockholders in Edison International, perhaps they should know why the company is currently short several hundred million dollars. An Indonesian government audit recently revealed that the Edison Paiton power plant had accumulated unexplained losses of over $280 million.

Yet, Edison was not the only U.S. company to suffer the corrupt Suharto/Clinton connection. According to State Department documents, Unocal, Calenergy and El Paso Energy were all subject to "corruption, collusion and nepotism" in other billion dollar power plant deals with Indonesia.

"Unocal executives told resources officer that the firm is close to reaching a deal with its partner, PT Nusamba (controlled by former President Soeharto crony Bob Hasan) to sever ties in two production sharing contracts (PSC) in East Kalimantan and East Java," noted a State Department cable.

"According to Unocal, Nusamba put USD 20 million into Gunung Salak, and it would be difficult, due to the financial structuring of the deal, to undo the partnership."

Nor was the corruption simply limited to simple power plants. According to documents found in John Huang's office, Exxon's $34 billion dollar Natuna sea gas deal with Indonesia was laced with "first family involvement".

Two recent Freedom of Information responses from the Central Intelligence Agency and the U.S. Commerce Department, both noted that documents detailing the exact amount of Exxon monies paid to the Suharto regime remains a secret. Exxon also contributed millions of dollars to the successful 2000 Bush campaign.

The unanswered question for America is how much of our energy costs is actually "corruption, collusion and nepotism."


JOHN HUANG MEETS THE CIA















EXPORT-IMPORT BANK DOCUMENTS

DOCUMENTS WITHHELD IN PART BY THE EXPORT-IMPORT BANK




United States Department of State


Washington, D. C 20520

Case Control No. 199902013

AUG 19 1999

Mr. Charles R. Smith
SOFTWAR

Dear Mr. Smith:

I refer to your letter of February 25, 1999 to the Department of Commerce, requesting the release of certain material under the Freedom of Information Act (Title 5 USC Section 552). Twenty-nine of the relevant documents retrieved in response to your request originated wiLh the Department of State and have been referred to us for appropriate action.

We have determined that 11 may be released, 15 may be released with excisions, and three may net be released.

The material in the excised portions of the 13 documents released in part and in the three documents withheld in full is currently and properly classified under Executive Order 12958 in the interest of national defense or foreign relations. As such, it is exempt from release under subsection (b)(1) of the Freedom of Information Act.

The material in the excised portions of one of the documents released in part and in two of the documents withheld in full also constitutes trade secrets or commercial or financial information obtained from a person and is privileged or confidential. As such, it is exempt from release under subsection (b)(4) of the Freedom of Information Act.

In the case of a document released in part, all non-exempt material that is reasonably segregable from the exempt material has been released.

With respect to material we have withheld under the Freedom of Information Act, you have the right to appeal our determination within 60 days. Appeals should be addressed to the Assistant Secretary for Public Affairs, c/o Appeals Office, IPS/PP/IA, Room 6001, SA-2, Department of State, Washington, D. C. 20522-6001. The letter of appeal should refer to the case control number shown above.

Sincerely,

Margaret P. Grafeld
Director
Office of IRM Programs and Services

Enclosures:
As stated.


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