Posted by: mel | January 5, 2010

How the disgraced James Riady, barred from travel to the U.S., made it back

Last year, however, the Indonesian mogul finally made it to Arkansas. He traveled there during the first of two previously unreported trips he made in 2009 to the United States. He was allowed in only after receiving a waiver from a rule that forbids entry to foreigners guilty of “a crime involving moral turpitude,” a term that government lawyers generally interpret to include fraud.

Riady’s return to the United States poses a prickly question for Hillary Clinton’s State Department: How and why did a foreign billionaire stained by Clinton-era scandals get a U.S. visa after being kept out for so long under the Bush administration?

The ethnic Chinese magnate’s ties to the Clintons have been a source of heated controversy since the late 1990s, when Riady became embroiled in one of the murkiest episodes of the Clinton presidency — a campaign fundraising scandal that caused a big political ruckus in Washington amid Republican Party allegations, never proved, of meddling by China’sintelligence services in American politics.

The saga brought Riady and his family-run conglomerate, Lippo Group, an $8.6 million fine, the biggest penalty in the history of U.S. campaign finance violations.

A close look at Riady’s quiet American comeback, along with dramas back home in Indonesia that preceded it, reveals how one of Asia’s best-known and most complicated businessmen has deployed a potent mix of faith, chutzpah and charity in a long quest for rehabilitation. It also reveals a man beset by contradictions — a dedicated student of the Bible who has a reputation in Indonesia for showing scant forgiveness to those who cross him; a generous philanthropist whose Lippo Group is notorious in Jakarta business circles for its raw pursuit of profit; a proud man who was humiliated by his entanglement with the Clintons but who has now sought to reenter their world.

Riady, 52, declined to be interviewed but, in an e-mailed response to written questions, he said the teachings of Christ “inform all that I do.” He said he hadn’t seen the Clintons during his 2009 trips to America but did pay $20,000 to become a member of the Clinton Global Initiative, an annual gathering of prominent figures in politics, business and philanthropy sponsored by Bill Clinton.

A senior State Department official said Hillary Clinton had no knowledge of the decision to let Riady enter the United States. The tycoon’s visa, he said, was issued by the U.S. Embassy in Jakarta after the Indonesian asked to travel to America so that he could attend family graduation ceremonies. Riady, added the official, was granted entry for a “very narrow purpose.”

On his first visit in May, Riady watched his son, John, graduate from the University of Pennsylvania’s Wharton School and his daughter, Stephanie, graduate from Wheaton College, a Christian school in Illinois. He also traveled to Arkansas to see Ouachita Baptist University’s president, Rex Horne, the former pastor of the Clintons’ Little Rock church. Riady, who has an educational foundation in Indonesia, said he visited about 15 American universities and schools and said he had made clear in his application to enter the United States that this was the main purpose of his travels. “I have a well documented passion for education,” Riady said in his e-mail.

On his second visit, however, he reached out beyond American campuses. In September he went to a business forum in Boston of Indonesian and American executives. He also registered for a meeting in New York of the Clinton Global Initiative, along with a galaxy of big-name guests such as President Obama and Secretary of State Clinton. Riady, in his e-mail, said he wanted to attend because “educational issues were on the agenda” but, in the end, didn’t “because I was unable to fit it into my schedule.”

Riady’s wide range of activities in America didn’t violate the terms of his visa, American officials say, but they nonetheless caused consternation in the upper reaches of the State Department. The tycoon, one State Department official said, is free to apply to visit again but “the reality of his past remains a significant obstacle for future travel to the United States.”

The Clinton connection

Riady, who trained as an investment banker in New York, met Bill Clinton in 1978 when the Indonesian spent four months in Little Rock, where Lippo bought a local bank, according to court documents. Returning to the United States in 1984, Riady stayed in Arkansas for two years before moving to California, and had frequent contacts with then-governor Clinton.

The relationship ended in disaster for Riady, who, before a Los Angeles court in 2001, pleaded guilty to a felony charge arising from his use of “dishonest and deceitful means” to funnel funds from Lippo companies overseas into the campaign coffers of Clinton and others. The money was not given directly by Riady or Lippo, but was used instead to reimburse other donors.

After the 2001 court appearance, Riady returned to Jakarta to run Lippo Group, a sprawling corporate empire founded by his father, Mochtar, with interests ranging from property and health care to finance and media. He since has mostly avoided talking about the scandal, but, in an interview posted in October on the Wharton School’s Web site, he discussed it briefly, saying he has tried “to be wiser and remind myself that money and power are both a blessing and a curse.” He said he “had to face the reality that business and politics do not mix.”

But Riady still clearly relishes mixing with the rich and politically powerful. He has become a regular at events organized by the World Economic Forum, a Swiss-based club of global power brokers to which Lippo pays more than $40,000 per year in corporate membership fees.

The question of whether Riady would be able to return to the United States was first raised in 2000 during plea bargain negotiations. As part of the plea agreement, Riady agreed not to seek entry for two years. Riady, in his e-mail, said the lead prosecutor in the case, Daniel O’Brien, wrote a letter that “specifically stated that my crime was NOT moral turpitude.” A copy of the letter on file with the Los Angeles court, however, includes no such statement by O’Brien. It notes only that the businessman might need a waiver if “the appropriate authorities determine that Riady has committed a crime of moral turpitude.” The letter records that Riady had informed the U.S. government that he might seek to visit America in the future “for business or personal reasons” and says the businessman could use the letter to support an application for a waiver if he complies with the terms of the plea agreement.

The 2001 plea agreement, which Riady signed on Jan. 10, 2001 — 10 days before George W. Bush became president — infuriated many Republicans, who complained that the deal prevented a full accounting of Riady’s fundraising activities for Clinton and other Democrats. The tycoon’s already dim prospects of getting back into the United States under a Republican administration darkened further with the Sept. 11 attacks, which led to a general tightening of visa procedures.

Riady, in his e-mail, said the 2009 trips — made on a six-month, multiple-entry visitor’s visa issued in May — were his first to this country since his 2001 guilty plea. He said the U.S. Embassy in Jakarta “recommended” that he be given a waiver from the Department of Homeland Security, which signs off on such matters. Riady said the department “concurred” at the end of October 2008. The department declined to comment.

A free spender

Riady has worked hard — and spent lavishly — to put the Clinton-era scandals behind him. He has donated large sums to charity, nurtured close ties with U.S. Christian groups and befriended U.S. diplomats and business people in Indonesia.

Ouachita Baptist University, which gave Riady the 2004 honorary degree, won’t say how much he donates to a scholarship fund, or comment on whether he’s provided other money. Biola University, a Christian school in Southern California visited by Riady in October, has also received money but won’t say how much.

The businessman has also donated to Christian causes in Indonesia, a mostly Muslim nation with a small but influential community of Christians. A massive new church, seminary and concert hall complex in Jakarta was built with Riady’s help, said its chief pastor, Stephen Tong. Riady also supports a Christian university and a high school. Forbes magazine last year named him a “hero of philanthropy.”

“It is incumbent upon all businessmen who are Christians to try to seed the teachings of Christ in all that we do,” Riady said in his e-mail.

All along, though, Riady’s religiosity, generosity and elite networking have coexisted uneasily with what critics and admirers alike describe as a peculiarly unforgiving approach to those who challenge him in business or cast doubt on his oft-stated high moral standards.

“He is Jekyll and Hyde,” said Bambang Harymurti, a friend of Riady and director of Tempo, a leading Indonesian magazine. He praised the mogul as a man of broad culture and sincere faith but also likened him to American robber barons such as John D. Rockefeller. “They were also good, God-fearing Christians,” Harymurti said.

Riady’s companies have a long record of disputes with business rivals and also partners, most recently with a Malaysian billionaire and the French hypermarket operator Carrefour. In February a Jakarta court jailed a close associate of Riady, Billy Sindoro, also a Christian, for trying to bribe a government antitrust regulator whose agency had issued a ruling that helped Lippo in a row with its estranged Malaysian partner.

Lippo’s general counsel, responding to written questions, said Sindoro, the former director of a Lippo company called First Media, was no longer a Lippo executive when he handed a bag full of cash to the antitrust official. Lippo, said the lawyer, had no prior knowledge of Sindoro’s “lone personal acts.”

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s


%d bloggers like this: