BIOGRAFI

Dr. Mochtar Riady

Who Is Mochtar Riady?

The Wall Street Journal 03/01/96

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This series of articles, quotes, excerpts and letters was contributed by Missy Kelly, a regular poster to Prodigy's Whitewater Bulletin Board and a follower of Banking scandals.
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Mr. Chertoff: I guess the question is really this, it is whether, in connection with this representation, you received a large amount of money and that may have had an impact on the degree of your cooperation with the Independent Counsel or with us?

Mr. Hubbell: That's pretty rotten.

Shortly after this exchange, Senator Alfonse D'Amato intervened to cut short questioning of Webster Hubbell by Whitewater Committee counsel Michael Chertoff. A New Republic writer described the exchange as "Chertoff's first major gaffe." Perhaps, but as the transcript printed nearby shows, the questioning did establish something: Between the time Mr. Hubbell resigned as associate attorney general and went to jail he was paid to represent the Lippo Group.

Lippo, in case you're wondering, is a huge conglomerate based in Indonesia. Its assets are estimated at $6 billion, and it concentrates mainly on banking and real estate in Indonesia and Hong Kong. It also does infrastructure projects in China and owns Lippo Bank of California. It was founded by Mochtar Riady, who rose from poor circumstances in Jakarta to become a highly successful executive at the private Bank Central Asia before founding his own empire. The family interests are represented by his sons Stephen in Hong Kong and James in the United States.

The Riadys are members of predominantly Muslim Indonesia's tiny but fantastically successful ethnic Chinese minority. Last year Forbes magazine wrote that Indonesia had 10 billionaires, six of them new. Most, including Mochtar Riady and Liem Sioe Liong of the Salim Group, owner of the bank where Mr. Riady got his start, have close ties to Indonesia's President Suharto. In case you're wondering whether Mr. Hubbell is an expert on Javanese legal customs or perhaps Irian Jaya property claims, the Riadys are also old Arkansas hands.

One of Mr. Riady's early U.S. investments was Worthen Bank of Arkansas. In 1984, in a partnership with Arkansas financier Jackson Stephens, Lippo bought $16 million of Worthen stock and installed James Riady in Little Rock as a director of the bank. "Mochtar Riady and Jack Stephens owe their friendship to the troubles of another noted financier, Bert Lance," a 1985 story in this newspaper reported. At one point Mr. Riady had offered to buy Mr. Lance's 16% stake in the National Bank of Georgia, but later withdrew, and the shares were eventually sold to Ghaith Pharaon, front man for the corrupt Bank of Credit & Commerce International.

Curiously, Lippo brushed up against the BCCI scandal again in 1991, when its Hong Kong Chinese Bank offered to buy the Hong Kong Bank of Credit & Commerce after regulators seized it. The purchase fell through, but one BCCI executive ended up as a senior vice president of Lippo Group Marketing; he was among four Group former BCCI officials reprimanded by a Hong Kong judge in 1995 for laundering money for drug baron Law Kinman. The money-laundering did not involve Lippo, and a spokesman tells us the executive has since emigrated.

The Worthen purchase started a period of intense collaboration between Stephens and Lippo, with a wide variety of deals, including the purchase of Hong Kong Chinese Bank. A 1994 report by Hong Kong's Securities and Futures Commission criticized a Lippo acquisition in which it was assisted by Stephens Finance. An official of Stephens Inc. told us this week, however, that all business affairs between the Arkansas investment giant and Lippo ended in the late 1980s.

But a relationship seems to remain between the Riadys and President Clinton. The Lippo boardroom in Hong Kong is decorated with a portrait of Mochtar Riady with Bill and Hillary (as well as a photo of Stephen Riady and President Bush). The family patriarch was invited to the Clinton inauguration. James Riady attended the pre-inaugeral economic summit in Little Rock, the Asian-Pacific Economic Conference in Seattle in November 1993, a June 1994 salute to Vice President Al Gore in Washington, and was on hand for President Clinton's November 1994 visit to Indonesia. In connection with the Jakarta visit, Commerce Secretary Ron Brown staged an orgy of contract signings for U. S. business ventures in Indonesia.

Also on hand for these meetings was Maria Haley, a director of the Export-Import Bank and previously an Arkansas official in charge of international business development. She says that Governor Clinton's romancing of the Riadys was what any governor would do to encourage local growth. Mrs. Haley's former husband, lawyer John Haley, is co-defendant with Arkansas Governor Jim Guy Tucker in the case now under appeal after Clinton pal Judge Henry Woods ruled it was beyond the jurisdiction of Independent Counsel Kenneth Starr.

Given this history, Mr. Chertoff's line of inquiry certainly seems appropriate, and well worth pursuing in further private depositions of Mr. Hubbell. The explanation of Mr. Hubbell's work may be entirely innocent, though our inquiries with Lippo in Los Angeles and Hong Kong produced no comment. Mr. Hubbell's phone logs as associate attorney general show calls from James Riady, and clearly he did have a prior relationship with Lippo, presumably through the Rose Law Firm.

The fact remains, though, that while Mr. Hubbell was negotiating his plea bargain with Mr. Starr, he was being paid by a billionaire pal of the President. In the plea bargain, he admitted to mail fraud and tax evasion and agreed to cooperate in exchange for a reduced-sentence recommendation. When the time for sentencing came, Mr. Starr showed what he thought of Mr. Hubbell's cooperation; there was no recommendation for leniency. ►e-ti/tsl
 

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