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24 Jul 2017 0:35
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  •   Home > News > International

    Donald Trump's business dealings in Indonesia unearthed

    While running for president, Donald Trump personally raised with senior Indonesian politicians the need to have a toll road completed in Indonesia to benefit a massive new resort development in which he later invested.

    Donald Trump was running for the US presidency when he personally raised with senior Indonesian politicians the need to have a toll road completed in Indonesia to benefit a massive new resort development in which he later invested.

    A senior Indonesian politician who met Mr Trump in New York in 2015 has revealed to Four Corners that he made clear the project would only go ahead if the toll road was completed.

    "He was saying that it's impossible without the toll road," Fadli Zon, the deputy speaker of Indonesia's Parliament, said.

    Mr Zon, together with the speaker of the Indonesian House of Representatives, Setya Novanto, met with then presidential-hopeful Mr Trump in September 2015 during the presidential primary campaign at Trump Tower in New York.

    The meeting, unauthorised by the Indonesian Government, was held with the direct assistance of Mr Trump's new Indonesian business partner, Hary Tanoesoedibjo, known as Hary Tanoe.

    At the time, Mr Trump and Mr Tanoe were in negotiations over the development of a mega-resort and an associated theme park, sky train, and Formula One racing track on a 3,000-hectare site on the island of Java, south of the capital Jakarta.

    "He [Trump] said he really understood well about the situation. For example, this theme park in Bogor area that needs some highway … because sometimes it's impossible to go there," Mr Zon said.

    Congested roads in the region can turn the 70-kilometre car ride from Jakarta into a nightmarish two-or-three-hour journey.

    One week after the New York meeting, Mr Trump signed the deal to develop the Trump International Hotel and Tower Lido.

    The construction of the toll road, which had been started then delayed in June 2015, resumed in November.

    The Government took over the construction in June 2016 and the first section is due for completion by the end of the year.

    Mr Zon said he estimated that with the impending completion of the toll road, Mr Trump and Mr Tanoe had already tripled their value of the resort land.

    "Yeah. I think the price increase like three times," he said.

    The President's latest financial disclosure, released on June 14, stated that the management fees from the Indonesian companies tied to the Bali and Lido resorts had more than doubled.

    The latest disclosure puts the fees at $US380,000, up from the $US167,000 he reported in 2016.

    'This is a marriage between politicians and business people'

    The head of Human Right Watch Indonesia, Andreas Harsono, said he thought the meeting between the Indonesian politicians and Mr Trump was unethical.

    "It is not appropriate for any business to ask the Government to pay for an access toll road into their property," he told Four Corners.

    "Unfortunately, it is common in Indonesia. You can change a road direction as you can extend a toll road or bridges or whatever to benefit people who have money, who have interest.

    "This is a marriage between politician and business people.

    "It is common, it is very common in Indonesia."

    Mr Zon and Mr Novanto were both investigated by a parliamentary ethics committee over whether the meeting with Mr Trump violated strict Indonesian government codes.

    The result of that investigation has never been made public, but both walked away with only a warning.

    In November, two months after the New York meeting, Mr Novanto was embroiled in a massive corruption scandal, accused of attempting to extort a $US4 billion paymentfrom American mining giant Freeport-McMoRan.

    Mr Novanto denied the accusation, claiming he was "just joking".

    He was never formally charged.

    Donald Trump's land in Bali

    Mr Trump and Mr Tanoe's first controversial Indonesian venture was in Bali.

    The resort, planned as the largest on the island, will overlook one of the most iconic and sacred sites — the temple of Tanah Lot.

    The existing low-scale Bali Nirwana golf course and resort will close at the end of the month.

    Hundreds of local workers will be laid off and demolition is due to start next month.

    MNC Group bought the Bali Nirwana resort in 2013 from the Bakrie Group, owned by one of the Suharto family's business associates.

    The Trump Organisation signed up in August 2015 to the redevelopment of the site.

    Not a lot of detail is known about the plans for the second Tanoe/Trump development, Trump International Hotel and Tower Bali.

    "It's a big complex, more than 100 hectares, to build a hotel, villas, condominiums, also to build a country club — that is also with Mr Trump," Mr Tanoe told the ABC in January.

    The Trump Organisation will manage the hotel, country clubs and golf courses with the Trump family heavily involved in the project.

    Mr Tanoe outlined the project to the ABC in March and said each of the family members had a different role.

    "Donald Jr is responsible for the overall project. Eric is more on the design and golf, and Ivanka is more on the detail, like the fit-out of the hotel," he said.

    Mr Harsono has warned that doing business in Indonesia may come at a cost for Mr Trump.

    "I'm not going to say Donald Trump is unethical man, but he is dealing with the worse of Indonesia past, and he is going to deal with the worst of Indonesia future," he said.

    "I think Donald Trump is going to get his businesses messier and also Indonesia messier.

    "This is going to be a messier place."

    EDITOR'S NOTE (July 17, 2017): This story has been amended to remove a reference to the bupati of Tabanan region in Bali, who was incorrectly identified.

    © 2017 ABC Australian Broadcasting Corporation. All rights reserved

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