The Sydney Morning Herald from Sydney, New South Wales, Australia • Page 147

THE SYDNEY MORNING HERALD SATURDAY, MARCH 30, 1996 SPECTRUM 5s A A Yf The owner of Australia's most successful casino is an Indonesian businessman who built a fortune on the back of army-sponsored ventures in East Timor. Drawing on a series of exclusive interviews, DAVID JENKINS traces Robby Sumampow's controversial involvement in Timor and the shadow this has cast over his Christmas Island casino. Ml cv lite Benny Moerdani. paid? "They want us to make a payment to them? Let them negotiate with the Government" When asked about the forced acquisition of smallholder plots, Moerdani said that at the time of the takeover the Portuguese not completed a survey of land ownership; legally speaking, no individual Timorese had any plot of land at that time. While it is true that the Portuguese had not issued proper land registration documents outside Dili, it hardly seemed an ideal way for the Indonesians to win the hearts and minds of their "brothers" in East Timor.

Robby Sumampow, who says he has never once set foot in East Timor, leaving business there to his younger brother Hendro, did not fare as well as he had hoped. East Timor was poor and underdeveloped. Security could not be guaranteed. Two of the company's trucks were ambushed and robbed, the drivers killed. As the war dragged on, coffee production fell to a quarter of the pre-1975 level.

"After a year," Sumampow said, "we wanted to pull out of East Timor." In the event, he was persuaded to stay on. As well as coffee, he now has interests there in sandalwood, marble production, real estate, civil engineering, retailing and warehouses. It is unfair, Sumampow says, for critics to claim that he was handed East Timor's major export industry on a platter. Unlike some Indonesian entrepreneurs, who simply rake off commissions, he worked long and hard in East Timor, rehabilitating neglected plantations, opening shops, establishing shipping links with the outside world. Two years after the invasion, the Indonesian army called again on Robby Sumampow.

Tens of thousands of Vietnamese boat people were washing up on Indonesian shores. Jakarta was not pleased but it treated them humanely, unlike some of its ASEAN neighbours. Moerdani was put in charge of building a huge camp on Galang Island, 80 kilometres south-east of Singapore. By 1980, more than 50,000 Vietnamese had passed through the camp on their way to resettlement in third countries. In Jakarta, officials of the United Nations High Commissioner for Refugees complained that they were obliged to deal exclusively with Robby Sumampow "for security According to the officials, the UN could have saved SUS1 million in the first year alone had they been allowed to put construction and food supply contracts out to tender.

Be that as it may, Sumampow completed the camp in the required three months, flying in carpenters from Java. He won a UN commendation for his efforts. Like a number of other cukongs, Robby Sumampow has achieved much in New Order Indonesia. Australia, he implies, is another matter altogether. "I'm not very interested to continue with my Christmas Island proposals," he said.

"My spirit is gone. I've been waiting too long. Maybe the Australian system and I don't cocokare not compatible." That gloomy talk notwithstanding, it seems too early to deal Robby Sumampow out of the action. lation in Canberra that Gerry Hand may no longer be much use as a lobbyist "Let's say the money is from Timtim," said Sumampow, using the Indonesian abbreviation for East Timor. "Before we are in charge of the casino, the Australian Government checked my background.

They checked not only my financial position but my character. They sent the police to check. Why change now? That's not fair. I put in my money, not a small amount. To my mind, it's not fair." Hand, who signed on as a consultant to Sumampow 18 months ago and who is now his partner in a number of business ventures, echoes that view.

"If you are going to own a casino, you come under intense scrutiny," he said. "He has cleared all that. I can understand his frustration. He's put forward a range of ideas but it's two years now and he hasn't been able to lay a single brick." Nor is that all. In his nine-year association with Christmas Island, Sumampow has been caught up in a series of wrangles with contractors, architects and lawyers.

His dispute, with Casinos Austria, which centres not on the operation of the casino itself but on casino marketing and the management of the adjoining five-star hotel, is now before the West Australian Supreme Court. Sis Photograph by DAVID JENKINS operation," Moerdani said. "The whole Timor operation was prepared in less than one year. And you know our budgeting system. You have to plan five years in So if you start something In the middle of Repelita, you don't have money for it "ABRI was squeezing everything.

It's unthinkable for a Westerner to understand. If you tell this to the US Staff College they won't understand; the Australian Staff College, they won't understand. How can you mount an operation without money? But we did it. Because we had to." There was, of course, one catch. Under the Portuguese, 30 per cent of East Timor's coffee was grown by the Sociedade Agricola Patria Trabilito (SAPT), a government-sponsored co-operative.

Another 60 per cent was grown by Timorese smallholders. The coffee was exported by SAPT and two or three family-owned Chinese trading companies, including Sang Thai Ho and Lay Kiang Fu. The coffee in the Dili godowns did not belong to ABRI or Robby Sumampow. Nor did the 1 SAPT coffee plantation at Fatu-besse, which, after more than four years of neglect, was transferred to Sumampow under a 20-year management contract. No compensation has been paid.

No estates have been returned, except for those belonging to the family of Mario Carrascalo, the third in a series of Jakarta-appointed governors. Are the Portuguese entitled to complain that the Indonesians simply carried off their coffee? "That could be right," Moerdani acknowledged. "As far as I know, Dading and the governor didn't have time to think about that." Should compensation be WAS the aroma of coffee that drew Robby Sumampow to East Timor and set him up for life. It was the prospect of an even greater jackpot that persuaded him to invest $90 million in a casino on Christmas Island, a tiny speck of Australia only 350 kilometres south of Jakarta. Now, as he seeks to pump another $50 million into Christmas Island, the Indonesian entrepreneur known as "Mr Robby" is forging even closer ties with Australia.

He has managed to get Gerry Hand, one of the Labor Party's leading critics of Indonesia's East Timor occupation, on his payroll. He has been approached by Kerry Packer, who would like to take over the management of his casino. Robby Sumampow is a gambler. He likes a challenge. He likes to back long shots.

He likes to place big bets. So far, his bets have paid off, handsomely. Robby Sumampow (Sung Fung Liang), the son of an Indonesian Chinese trader who arrived, almost penniless, from China's coastal province of Fujian in the prewar Dutch East Indies, is one of Indonesia's leading tycoons. A man with the Midas touch, he presides over a company with interests in textiles, paging systems, hotels, hospitals, casinos and canned food. He buys and sells, especially aromatic products: coffee, cloves, sandalwood.

He is reported to have assets of more than $210 million. The Christmas Island Casino, in which he has a 90 per cent stake, made a gross gaming profit of $140 million in its first 15 months. Out of that it paid $25 million in Australian gaming tax and $1.5 million to the local community. The secret of all this success is excellent connections. Robby Sumampow is close to General Benny Moerdani, a former Indonesian Defence Minister.

He is close to Tommy Soeharto, the businessman son of the Indonesian president, and in 1990 helped Tommy establish a lucrative clove-marketing monopoly. He is close to Gerry Hand, who lobbied successfully for Indonesian high-rollers to have visa-free access to Christmas Island. He is close to Air Marshal Teddy Rusdy, who is associated with Moerdani's unrealised dream of setting up a pilot-training school north of Perth. Kerry Packer, who missed out on his bid for the Sydney casino, has expressed interest in operating the Christmas Island casino should Sumampow succeed in his efforts to oust the current operator, Casinos Austria. Robby.

Benny. Tommy. IN Indonesian parlance, Robby Sumampow is a cukong, an ethnic Chinese businessman 4 Moerdani had to fund his own invasion In effect, the people of East Timor were asked to underwrite their own subjugation. 9 9 to assume command of all Indonesian operations in East Timor, and Arnaldo dos Reis Araujo, whom the Indonesians installed as the first East Timorese governor of the territory. "The governor was happy with what he was doing," Moerdani said, "and a few months later he issued a letter authorising Robby to sell coffee from Timor and provide general supplies for the armed forces.

It became routine. This was a decision made by the governor and the military commander." Sumampow was awarded a 20-year contract. THE face of it, Sumampow was on I to a good thing. East Timor pro duced 5,600 tonnes of coffee a year, 75 per cent of it the much-sought-after caffea arabica, the rest a good quality caffea robusta. In a good year, the coffee crop grossed about SUS8 million to SUS9 million ($10.3 million to Si 1.6 million), in 1975 prices.

Moerdani was also on to a good thing. Indonesia had not planned to invade East Timor when Repelita II, the 1974-79 Five-Year Plan, was drawn up and there was no money to spare in the military budget. Nor could any be expected. Unlike the former civilian government of President Sukarno, which had lavished funds on the armed forces, the military-backed Soeharto Government had cut military spending to the bone. Moerdani had to fund his own invasion.

He did it partly with the proceeds from the coffee. In effect, the people of East Timor were asked to underwrite their own subjugation. "This was a bloody expensive Teddy. Gerry. Kerry.

A world where business aptitude meets political clout. A world where a portly, publicity-shy Chinese trader is referred to in respectful, quasi-royal terms: The King of East Timor. The King of Cloves. The King of Christmas Island. But wait.

Something is amiss. The king has been having a rotten run of luck. His Australian operation, the jewel in the Sumampow crown, has lost some of its lustre. In February 1994, Robby Sumampow submitted proposals for a string of additional developments on Christmas Island. He wanted to build 400 luxury houses and an 18-hole international-standard golf course on a site known as Phosphate Hill.

He wanted to build a specialist private hospital to service South-East Asia, staffed with gynaecologists, eye specialists, tumour specialists and heart specialists. He wanted to build a school alongside the golf course where wealthy Asians could study English. He envisaged a duty-free boutique and a tote agency where gamblers could bet on the Australian races. He was willing to write a number of large cheques to make it all come true. Two years have passed and Robby Sumampow is no closer to realising his dream.

Canberra decided belatedly that its own "expression of interest" process was flawed and put the development out to tender minus the key Phosphate Hill site that he favoured. "I have done business in Indonesia, in Singapore, in Malaysia, in Thailand, in Vietnam," Sumampow said in an exclusive interview. "This is the first time I have had any problems like this." What has gone wrong? The problem may simply be the decision-making process. Christmas Island is administered by the Commonwealth Government, using West Australian law. Developers have to run the gauntlet of the shire council, the local administrator and a raft of Federal departments, including the Department of Environment, Sport and Territories (DEST).

There have been delays caused by red tape, by survey work and by the renegotiation of mining leases. According to DEST, the Phosphate Hill site is subject to a mining lease that runs for another six years. But it may also be political. Robby Sumampow suspects that the Keating Government got cold feet after reports in the Australian media that he made his fortune "on the back of Indonesia's invasion of East Timor in He is concerned that the Howard Government may not be any more sympathetic. There is specu Plus .11 HN 12970 4 i ST i 4 YCH0035NSW 4 4 is- The Chiswell up some exclusively craftsmen.

of $1,000 JST Chiswell I Available Robby Sumampow, left, and dismissal of the Whitlam Government, an extraordinary deal was sealed. Sumampow said he had been told the Indonesian army needed supplies. Moerdani said that was correct and asked what Sumampow could do. According to Moerdani, who also spoke exclusively to the Herald, Sumampow said that he and four or five other Indonesian Chinese businessmen were prepared to send a ship with $US1 million ($1.3 million) worth of merchandise to East Timor. The ship would carry flour, rice, sugar, Christmas trees, bunting, motor cycles and Land-Rovers.

Moerdani recalled: "I 'What! One million dollars! You know how much that is? He said, 'Yes, I I didn't believe it" As it happened, the businessmen had done their homework. "They knew there was coffee in East Timor and that a lot of it was stored and couldn't be sent out because of the war," said Moerdani. "I said, 'I won't have one million dollars to pay No, they don't mind! 'We know there is a lot of coffee in East Timor, maybe 5,000 or 6,000 tonnes Well, we send one ship with all these goodies before Christmas. And then after it is off-loaded we load coffee, as much as the ship can take. And we sail to Singapore and sell it If the proceeds come to more than one million dollars, we'll take only one million to pay for the goods.

If it comes to less than one million, you don't have to pay us I said, 'Very generous! What do I owe you for 'No, we just want to do something for the I said OK. So, it started." When Moerdani asked how long it would take the shipment to arrive, he was told seven days. As it happened, there was a slight delay. The ship arrived in Dili on December 23, 1975. In addition to the civilian merchandise, it unloaded non-lethal military material: food, bicycles, tyres, jeeps.

Moerdani was impressed. He introduced Sumampow to Colonel Dading Kalbuadi, a red beret colleague who was about Iron 7 AST 5TONE The king and the general 1972, he established Indonesia's first telephone paging system, gaining Indonesia-wide rights from Motorola. The company prospered. Robby Sumampow diversified. He established a textile factory in Solo.

He built a private hospital. It began with 40 beds. It now has 180. In December 1975, "Mr Robby" got his big break. Lieutenant Colonel Agus Her-noto, a former red beret communications officer who had lost a leg in the 1962 West New Guinea campaign, asked him if he would be interested in doing business in East Timor.

Indonesia had just invaded the Portuguese colony. The war was going badly. The Indonesian armed forces (ABRI) were badly led and badly equipped. One Indonesian unit Battalion 502 of the Army Strategic Reserve behaved with such brutality that it had to be pulled out in disgrace after only 10 days. Nor had Jakarta budgeted for a major military operation.

The army was short of" rice, flour, sugar and tinned food. The shops in Dili were empty. Wlien Sumampow expressed interest, he was taken to meet Major General Benny Moerdani, 43, a highly decorated parachute officer whom he already knew socially. They met in a Jakarta nightclub. Like Sumampow, Moerdani came from Solo.

Sumampow was barely 31. But he was moving in important circles. Moerdani was not only the head of army intelligence; he was the de facto commander of the Indonesian invasion of East Timor. At the meeting, which took place on December 11, 1975, four days after the Indonesian invasion and a month after the 11 $2000 chance to pick a fantastic $2,000. Galleries', feAr fnrps.

X. if Infers who receives protection and business favours from a powerful pribumi (indigenous) patron in exchange for a share of the profits. Like most cukongs, Robby started out as a small-time trader. Born in the Central Java city of Solo in 1944, he joined his father's trading business at the age of 18. The family bought textiles in Jakarta and trucked them to Solo.

The year was 1962. Indonesia's economy was on the ropes. Margins were slim. After two years, Robby went into business for himself. At first, he kept afloat by buying and selling textiles.

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