INDONESIA: WAS THE 11/17/20 OFF-CALENDAR MEETING BETWEEN THEN-USA PRESIDENT DONALD TRUMP + THE INDONESIA “SMILING GENERAL” LUHUT BINSAR PANDJAITAN (Mr. Fixit for President Joko Widodo) regarding a conspiracy of interference in a private transaction?
11/17/20, PRESIDENT DONALD TRUMP HAD AN OFF-CALENDAR MEETING WITH INDONESIA MINISTER Luhut Binsar Pandjaitan (“Minister of Everything” because of his extensive portfolio + political clout)
WASHINGTON – President Donald Trump met with Indonesian Coordinating Minister for Maritime Affairs and Investment Luhut Binsar Pandjaitan on Tuesday, a meeting that the White House did not include on the president’s public schedule and did not provide comments on.
White House advisers Ivanka Trump and Jared Kushner, along with Adam Boehler, chief executive officer of the U.S. International Development Finance Corp. (DFC), were also present, according to a readout and photographs of the meeting provided by the Indonesian government.
The unannounced meeting drew scrutiny from Asia analysts, especially because it comes at a time when Trump has had few publicly announced meetings as he and his presidential campaign pursue lawsuits alleging ballot fraud in the 2020 vote.
“It is pretty extraordinary that at a time when the U.S. president is receiving few visitors that Luhut Pandjaitan would be received in the Oval Office,” said Aaron Connelly, a research fellow on Southeast Asian foreign policy at the International Institute for Strategic Studies.
DFC’s Boehler, a former college roommate of Kushner, met with Pandjaitan in Jakarta last month to further discuss investment opportunities in the country’s sovereign wealth fund, following an initial meeting in January with Widodo.
BACKGROUND: Report highlights secretive business dealings of Indonesian PEP Luhut Pandjaitan
Luhut Binsar Pandjaitan
- A new report links two of Indonesia’s most prominent political figures, one of them a vice presidential candidate, with mysterious offshore financial transactions related to coal companies they owned.
- The report, from the international anti-corruption NGO Global Witness, suggests that businessmen and politicians Sandiaga Uno and Luhut Pandjaitan both may have taken advantage of corporate secrecy techniques that obscured ownership of companies and flows of millions of dollars in cash.
- While there is no evidence that Luhut or Sandiaga have engaged in any illegal activity, the issues raised in the report are at the heart of a global financial system that has allowed the tools of corporate secrecy, which can facilitate corruption, tax dodging and conflicts of interest, to spread unchecked.
- Sandiaga is running for vice president in the April 17 election on a ticket led by former military general Prabowo Subianto. Luhut, himself a former general, is a senior minister and close adviser to the incumbent, President Joko Widodo.
JAKARTA — A new report links two of Indonesia’s most prominent political figures, including a vice presidential candidate, with mysterious offshore financial transactions related to coal companies they owned.
The report, from the international anti-corruption NGO Global Witness, suggests that businessmen and politicians Sandiaga Uno and Luhut Pandjaitan both may have taken advantage of corporate secrecy techniques that obscured ownership of companies and flows of millions of dollars in cash — techniques the Indonesian government has tried to stamp out as part of its effort to improve governance and tax collection in the country.
The allegations touch the highest levels of Indonesian politics as a two-horse race for the nation’s presidency enters its final phase. Sandiaga is running for vice president in the April 17 election on a ticket led by former military general Prabowo Subianto. Luhut, himself a former general, is the current maritime coordinating minister and one of President Joko Widodo’s closest advisers.
While there is no evidence that Luhut or Sandiaga have engaged in any illegal activity, the issues raised in the report are at the heart of a global financial system that has allowed the tools of corporate secrecy, which can facilitate corruption, tax dodging and conflicts of interest, to spread unchecked.
The Indonesian government has tried to crack down on the use of anonymous companies — those whose ownership has been disguised — through a March 2018 presidential order that gave domestic firms one year to disclose their true, or “beneficial,” owners to the state. But it’s unclear whether the policy is being enforced.
While the Global Witness report doesn’t suggest that Sandiaga or Luhut broke the law, the offshore dealings by both men have raised questions about a lack of transparency in their business practices. When questioned, both men declined to shed any further light on the subject.
“As a man running for one of the highest public offices in Indonesia, [Sandiaga] should be gravely concerned with addressing these matters,” Global Witness climate campaign leader Stuart McWilliam said. “Yet, he has not provided a credible account of his part” in a series of mysterious payments laid out in the report, “and when given the opportunity to comment, he did not do so.”
The first part of the report focuses on payments made by a coal company of which Sandiaga was a controlling owner, to an anonymous firm in the Seychelles, a small country in the Indian Ocean and one of the world’s most notorious secrecy jurisdictions.
The payments, totaling at least $43 million, went from Indonesia’s Berau Coal to Velodrome International in the Seychelles. They took place from 2010 to 2012, at a time when Berau was hemorrhaging money; it later went belly up. The purpose of the payments has never been made clear. Officially, they were for advice on “key strategic, business and operational aspects,” though the specific services to be provided were never explained. After Sandiaga’s firm sold most of its shares in Berau Coal to London-listed Bumi plc, a joint venture between British investor Nathaniel Rothschild and Indonesia’s Bakrie family, the new owners began to raise questions about the payments, which they were now invested in. A year later, they managed to terminate the agreement with Velodrome, as the partnership between Sandiaga’s side and the new owners broke down over allegations of financial and other irregularities.
For years, Velodrome’s ownership remained unclear, even as Bumi plc hired a law firm to investigate who had benefited from the payments and other alleged improprieties. Then, in 2016, the Panama Papers leak revealed that Velodrome had been set up and run by none other than Sandiaga Uno himself. He was the sole shareholder and director of Velodrome until May 2009, a few months before the payments started to be made. At that time, control of Velodrome passed from Sandiaga to a Singaporean lawyer named Ng Soon Kai.
Now, the Global Witness report delivers another piece of the puzzle: Ng Soon Kai and Sandiaga Uno are “long-time business partners,” fueling suspicions, raised by Bumi plc and others, that the payments to Velodrome may have been “related party transactions,” or ones in which the two parties held a pre-existing connection. In some cases, related-party transactions are legitimate activities, but in others they can be used to facilitate tax dodging or to benefit some shareholders at the expense of others.
Based on the available information, it can’t be said with certainty who controlled Velodrome during the period in which the payments were made. The Panama Papers revealed that Ng Soon Kai was the shareholder as of mid-2009, but they didn’t disclose whether he held on to the Seychelles company after that. Still, as the last known shareholder, he would seem to be the likeliest person to have owned Velodrome when it received the money from Berau Coal.
Neither Sandiaga nor Ng Soon Kai responded to Global Witness’ inquiries on the matter, the report says, leading the NGO to “conclude that Uno had a hand in the payments from Berau Coal to Velodrome, and that he may have benefited from them personally in some way.”
Neither Sandiaga nor the lawyer replied to Mongabay’s inquiries. Sandiaga has yet to address the matter publicly.
Aryanto Nugroho, advocacy manager for the Indonesian chapter of extractive-industry watchdog Publish What You Pay (PWYP), the payments may be indicative of a tax-avoidance strategy known as “base erosion and profit shifting,” defined by the OECD as the exploitation of “gaps and mismatches in tax rules to artificially shift profits to low or no-tax locations.”
The strategy is not necessarily illegal, but Aryanto said it was unjust all the same. In general, he said, “wealthy people [are able to] avoid taxes while ordinary people are forced to obey the rules and pay tax.”
Since tax avoidance may indicate that illegal strategies for evading tax have also been employed, Aryanto called on the Indonesian government to investigate the Berau Coal case.
“If companies continue to dodge taxes, it could promote habits that lead to corruption,” he said.
The second part of the Global Witness report details how, in 2016, coordinating maritime minister Luhut Pandjaitan sold a controlling stake in coal miner PT Toba Bara Sejahtra to hidden owners via an anonymous company based in Singapore.
While Luhut did not respond to the NGO’s inquiries, he dismissed the significance of the findings in a media scrum outside his office last week.
The Singapore company, Highland Strategic Holdings, did not respond to Mongabay’s inquiries on the matter. Neither did Watiga Trust, which holds the shares in Toba Bara on behalf of Highland.
The opaque corporate structure means the identities of the true owners of Toba Bara’s coal mines in Kalimantan, the Indonesian part of Borneo, and the coal-fired power plants it’s building on the neighboring island of Sulawesi remain a mystery.
“It’s impossible to know whether the new controlling owners of Toba Bara Sejahtra might also be politically connected people, such as government officials, other politicians, their family members, or business associates,” the report says.
Maryati Abdullah, PWYP’s national coordinator for Indonesia, called on the government to enforce the regulation on disclosing beneficial ownership so that the true owners of these assets could come to light.
“Why do companies have to publish and the public have to know about the beneficial owners of companies? So that they can identify which companies have conflicts of interests with public officials,” Maryati told Mongabay.
“The opening up of beneficial owners’ data could also be useful to find indications of tax evasion and tax avoidance,” she added, “for example, whether a service payment to other parties makes sense or not and whether a payment is made in a transparent manner or not.”
Aryanto called on the government to move quickly on enforcing the disclosure regulation.
“It’s already April,” he said. “So the public is looking whether the government is truly serious in implementing the regulation or not. The system should have been prepared early this year through an implementing regulation by the Ministry of Law and Human Rights. But we haven’t heard [whether the regulation has been issued]. Hopefully the government is aware of the deadline, especially considering the release of the Global Witness report.”
and more BACKGROUND: The smiling ex-general (Luhut Pandjaitan) who has become Indonesia’s ‘Mr Fixit’
Luhut Pandjaitan has emerged as President Joko Widodo’s right-hand man
Luhut Binsar Pandjaitan (born 28 September 1947) is an Indonesian politician, businessman and retired four-star Army general, serving as Coordinating Minister for Maritime Affairs and Investment since October 2019. He previously served as Coordinating Minister for Maritime Affairs from July 2016 to October 2019, Coordinating Minister for Political, Legal, and Security Affairs from August 2015 to July 2016 and Chief of Staff to President Joko Widodo. He was also Minister of Trade and Industry in President Abdurrahman Wahid‘s cabinet and Indonesian Ambassador to Singapore from 1999 to 2000.
Luhut’s military positions included Commander of the Army’s elite Special Forces (Kopassus) Group 3, Commander of the Infantry Weaponry Center (Pussenif) and head of the Army Education and Training Command (Kodiklat). He was the founding commander of Detachment 81 (now Sat-81/Gultor), the counter-terrorism unit of Kopassus, where his deputy was Prabowo Subianto.
After retiring from the military, in 2004 he founded Toba Sejahtra Group, which has interests in natural resources (oil, gas and mining), electricity generation (coal, gas and geothermal) and agriculture (palm oil).
Luhut Binsar Pandjaitan rose to general in the military and became a minister after Indonesia started its transition to democracy in 1998 © Anton Raharjo/Anadolu Agency/Getty Share on Twitter (opens new window) Share on Facebook (opens new window) Share on LinkedIn (opens new window) Save Stefania Palma in Singapore JANUARY 24 2021 21 Print this page When Donald Trump was furiously contesting his election defeat in the courts, the then US president still found time for at least one foreign visitor to the Oval Office. Luhut Binsar Pandjaitan, Indonesia’s minister for maritime affairs and investment, was given the red carpet treatment by the Trump family late last year, extracting what he claimed was a promise of $2bn in funding for Indonesia’s first sovereign wealth fund. The apparent financial backing might be moot, following Mr Trump’s departure from office last week. But for Indonesians, the episode underlined the remarkable networking ability of one of south-east Asia’s leading political dealmakers, who has become Indonesian President Joko Widodo’s “minister of everything”. From raising funds for the sovereign wealth fund to coordinating one of the world’s biggest vaccination programmes, the mustachioed former general has become the government’s Mr Fixit. “President Jokowi remains the main political figure in terms of palace politics and cabinet day-to-day activities,” said Philips Vermonte, executive director at CSIS Indonesia, a think-tank. “But Pak [Mr] Luhut is a fixer, a doer. Whatever task is given to him, he seems to be able to deliver.” Mr Pandjaitan, centre, at the close of the IMF and World Bank annual meetings in Bali in October 2018 © Goh Chai Hin/AFP/Getty A Christian born on the island of Sumatra, he saw combat as a young officer during the 1975 invasion of the former Portuguese colony of East Timor by the late Indonesian dictator Suharto. Now 73, he once described how some of his men had soiled their trousers as they prepared to parachute into the capital, Dili, kicking off a war that cost an estimated 100,000 lives. Mr Pandjaitan rose to general and became a minister after Indonesia started its transition to democracy in 1998, before leaving politics to set up his own business. His interests include timber, property, palm oil, coal mining and energy. In 2008, he met Mr Widodo, then a city mayor, and helped finance his victorious presidential election campaign in 2014. Two years later, while he was briefly minister of mines and energy, he sold a controlling stake in his coal unit, Toba Bara, for an undisclosed amount to a Singapore-based company whose ultimate buyers remain unidentified. The lack of details on the sale “has left unanswered questions which are an important matter of public interest”, said Global Witness, a campaign group. The ministry of maritime affairs and investment said the buyers are “a non-related party to Mr Pandjaitan and/or Toba”. Mr Widodo, who came to power promising to tackle Indonesia’s endemic corruption, has continued to load Mr Pandjaitan with new responsibilities throughout. Not only is the ex-general involved in the vaccine drive and the sovereign wealth fund, he is also courting investors for a planned $31bn new capital city. Speaking with China’s premier Li Keqiang, right, in Beijing in April 2018 © Naohiko Hatta/Kyodo News/Getty On the international stage, Mr Pandjaitan was pictured in October tapping elbows with Wang Yi, China’s foreign affairs minister, as Jakarta sought Chinese vaccines. Only a year earlier, he had led Indonesia’s response to the incursion of Chinese fishing boats in waters claimed by Jakarta near the South China Sea. Fluent in English after studying in the US, the former general’s connection with the Trump administration is through Jared Kushner, Mr Trump’s son-in-law, whom he met at the White House at least two years ago. “We maintained this [relationship] so we can talk over the phone or maybe [on] WhatsApp,” Mr Pandjaitan told the Financial Times last year. The dialogue between the pair became “the main bilateral relationship between DC and Jakarta”, said Aaron Connelly, a research fellow at the International Institute for Strategic Studies, a think-tank. Mr Trump’s family also has business interests in Indonesia. Donald Trump Jr, the former president’s son and executive vice-president of the Trump Organization, last year launched two Trump-branded resorts in the south-east Asian country. It remains to be seen, however, whether Mr Pandjaitan will be able to replicate these close ties with the White House under Joe Biden, the US’s new president. And for all Mr Pandjaitan’s rising status, analysts say he probably will never be president of Indonesia. The Muslim majority country would be unlikely to vote for a Christian leader. But as long as Mr Widodo is in power, he is expected to be the president’s de facto prime minister, with cameo roles in defence, foreign affairs and international investment. “I think for him it’s just a power thing,” said an Indonesian politician who is familiar with Mr Pandjaitan. “Right now he can have a lot of power without really playing the politics of it . . . That’s where he wants to be.”
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