EDITOR’S UPDATE 12 November: The image accompanying this article has been changed from the original. This is because Indonesian authorities and media have misinterpreted the facts outlined below, claiming that $80,000 was paid to secure a meeting between Jokowi and Obama. This is not what the article says or claims.
Why did a Singaporean consultant pay $80,000 to a Las Vegas PR company to lobby for the Indonesian government?
Indonesian President Joko Widodo’s visit to the United States last week yielded mediocre benefits by most measures – trade, defense, bilateral friendship.
Now news has surfaced that Jakarta paid a Las Vegas lobbying firm to get Widodo access to Washington insiders, spending taxpayer money for work the Indonesian embassy could have done. The backroom relationships and lack of official coordination behind this lobbying contract might explain why the diplomatic mission was such a disappointment.
First, some context. On all sides, the response to Widodo’s trip was lukewarm at best. At home, opposition forces immediately attacked Widodo for not diversifying Indonesia’s foreign investment portfolio after it became clear that US$13 billion out of the $20 billion in pledged investments would flow to extractive industries, a sector on which Indonesia’s economy is excessively dependent.
Widodo also took flak for his surprise announcement that Indonesia will join the Trans-Pacific Partnership. Political forces on the right attacked the statement as lacking “careful consideration” for Indonesia’s national interests, while critics on the left were quick to point out joining the trade pact flies in the face of almost every protectionist policy Widodo has adopted in the past year.
The reception Widodo received in the US was equally tepid. Despite this marking the first official visit of an Indonesian president to the US in 10 years, President Obama granted Widodo a mere 80 minutes to discuss bilateral ties between the second and third largest democracies in the world. The results of the high-level meeting were meagre: three non-legally binding Memoranda of Understanding, and a Joint Statement on Comprehensive Defense Cooperation.
What accounts for such a disappointing outcome of the first official US-Indonesian talks on American soil in a decade? In preparatory meetings leading up to the visit, US diplomats had apparently struggled to identify Indonesia’s demands, as no coherent and substantive foreign policy agenda was proposed. Instead, the Indonesian envoys allegedly obsessed over protocol.
The seemingly ill-conceived and poorly-executed visit reflects the Indonesian government’s lack of coordination on a foreign policy agenda. At the heart of this foreign policy confusion is a deep rift between foreign minister Retno Marsudi and Luhut Panjaitan, Widodo’s ambitious presidential chief of staff. While presidential visits to foreign countries clearly fall under the Ministry of Foreign Affairs, Luhut Panjaitan traveled to the US in March to “prepare” Widodo’s trip. Politicians close to Retno Marsudi quickly criticised Luhut Panjaitan in the Indonesian press.
It is against this backdrop that a mysterious payment to a lobbying company in Las Vegas raises new questions about turf wars in Widodo’s government and about the president’s ability to control his staff. A Services Agreement dated 8 June and filed with the US-Department of Justice under the Foreign Agents Registration Act (FARA) on 17 June shows that a Singaporean company called Pereira International PTE LTD contracted the services of Las Vegas-based R&R Partners, Inc.
Per the public document, R&R Partners sold its lobbying services for $80,000, to be paid in four installments between 15 June and 1 September. Concretely, the foreign principal (ie Pereira) was “retained as a consultant by the executive branch of the Indonesian government.” The contract further lists the services provided by R&R partners:
- “Arranging and attending meetings with key policymakers and members of Congress and the executive branch including the Department of State;”
- “Attempt to secure opportunity to address joint sessions of Congress during Indonesian President Widodo’s visit to the US;” and,
- “Identify and work with influential individuals, media, public and private organisations and affiliates in the US to support efforts of President Widodo.”
A consultant “will communicate the importance of the Republic of Indonesia to the United States focusing on the areas of security, commerce, and the economy,” according to the agreement. The contract identifies the consultant as Morgan Baumgartner, R&R Partner’s Executive Vice President and General Counsel. It is signed by Sean Tonner, President, on behalf of R&R Partners, and Derwin Pereira on behalf of Pereira International.
The short biographies on R&R Partner’s website don’t suggest the consultants have any knowledge of Indonesian politics or work experience in the country to help them “communicate the importance of the Republic of Indonesia to the United States.” In fact, Baumgartner emphasises her expertise in the field of “gaming law,” among others. Likewise, Tonner’s biography only mentions past activities for a “Denver-based global consulting firm” and Houston-based Noble Energy, in addition to his “desert and jungle warfare training.”
By contrast, Derwin Pereira, the Singaporean consultant who paid $80,000 to R&R Partners for the Indonesian government, has offered his services to Indonesia’s rich and powerful for quite some time. After a bachelor’s degree at the London School of Economics and Political Science in the early 1990s, he worked for the Singaporean newspaper The Straits Times in Indonesia during the fall of Suharto and became Indonesia Bureau Chief.
After a post in Washington for the Times, Pereira started his own consultancy, Pereira International. Today, he prides himself for “his ability to build contacts in the highest places” and his “deep access … [to the]…political and business elite in Jakarta [providing] him with exclusive access to vital information.”
Besides lobbying, Pereira has ties to think tanks and academic outlets in the US. Pereira, who holds a master’s from Harvard’s Kennedy School of Government, maintains close contact with his alma mater. He not only is an International Council Member at the Kennedy School’s Belfer Center for Science and International Affairs, but funded the Derwin Pereira Graduate Fellowship to “support an Edward S. Mason Program student from Indonesia.”
The program offers policy training to “leaders from developing, newly industrialized and transitional economy countries.” Pereira also selected Indonesian fellows for the program through the Ancora Foundation, an outlet set up by Gita Wirjawan, Indonesia’s trade minister under President Susilo Bambang Yudhoyono. One of the first Indonesians who passed the “competitive selection process” for a place in the Mason Program was Agus Yudhoyono, the president’s son.
Pereira has also sponsored the Derwin Pereira Indonesia Initiative (DPII), a speaker series that has featured prominent Indonesian politicians at the Center for Strategic and International Studies (CSIS) in Washington, since 2012.
While Pereira has a track record of lobbying for Indonesian elites, the contract filed with the US justice department does not name anyone in the government who hired Pereira and R&R Partners. But Pereira has clear links with Luhut Panjaitan. He wrote several stories about the statesman while at The Straits Times in Indonesia and interviewed him in Singapore, where Luhut Panjaitan was ambassador from 1999-2000.
The website of Pereira International prominently features the same photograph of Luhut Panjaitan used on the website of Toba Sejahtra, a company active in the mining and plantation sector and owned by Luhut Panjaitan. This suggests that Pereira and Luhut Panjaitan know each other and have met previously.
There’s no evidence Luhut Panjaitan instructed Pereira to pay R&R Partners $80,000 for its lobbying services, but the contract raises a few questions.
Who within Widodo’s government ordered Pereira to make the payment? Was Indonesian taxpayer money used to hire a Las Vegas lobbying firm to deliver services that Indonesia’s US embassy could have easily put together? Was this done in coordination with foreign affairs minister Retno Marsudi, or was this an attempt to bypass the ministry? If the latter, is Widodo in control of his government, or are there too many competing interests in the president’s inner circle to devise a coherent foreign policy agenda?
It’s unlikely Indonesians will receive answers to these questions and to the question of why their government bungled Widodo’s visit to the US. Not only is the world of lobbyists and political elites extremely opaque, but as is well known, what happens in Vegas stays in Vegas.
Dr Michael Buehler teaches Southeast Asian politics at the School of Oriental and African Studies in London. His writings are available at www.michaelbuehler.asia
UPDATE: Download the full contract between Pereira International PTE LTD and Las Vegas-based R&R Partners, Inc filed with the US Department of Justice by clicking on the front page below.