PEACEKEEPER? A lone policeman patrols a ravaged Ambon market, following riots that seemed to be anything but spontaneous. Maya Vidon--AFP

Suharto in the Shadows
Behind Indonesia's economic and political chaos, a familiar figure is pulling some strings
By JOHN COLMEY and DAVID LIEBHOLD Jakarta

In the financial world they call it the poison pill, a labyrinth of cross-vested interests designed to protect a company from hostile takeover. In Indonesia, it was known as the New Order, or sometimes Suharto Inc. The principal ingredients: a military deeply enmeshed in politics and business, the rigorous indoctrination of schoolchildren to trust in the wisdom of the state, and a political structure based on enforced "consensus," designed to look democratic but to serve and approve the actions of a single leader. Backed by terror and a patronage system that guaranteed a lifetime of riches for every compliant minister, general and tycoon, the New Order ensured former President Suharto 32 years of uninterrupted power. The system made the most complicated American multinational look like a mom-and-pop store.

So it should come as no surprise that eight months after Suharto stepped down--or "stepped aside," as some local analysts prefer to call it--the Smiling General is back and pulling some strings. The power of his chosen successor, B.J. Habibie, is rapidly draining away as he proves incapable of stopping a nationwide wave of bloodletting that increasingly bears the marks of an orchestrated campaign. The investigation into allegations that Suharto and his family systematically stole and stashed away billions of dollars has ground to a halt. The reform movement that pushed the 77-year-old Suharto from power is leaderless and in disarray, as more than 100 parties prepare to compete in a national election in June that has voters confused. Much now depends on General Wiranto, the head of the Armed Forces. Wiranto, a former aide-de-camp to Suharto, must decide between his pledge to protect his former commander-in-chief and his loyalty to the nation. But as chaos reigns, Suharto has seized the moment to try to reassert his power, whatever the cost to Indonesia. "He's acting like a Javanese king," says Muslim leader Amien Rais. "In ancient times, if the king collapsed, the people had to go along with him. So he thinks if he's going to collapse, he'll bring the whole country down too."

The first to publicly accommodate Suharto's reemergence in the political arena was a man who knows him well--Abdurrahman Wahid, Indonesia's most influential Muslim leader and head of the 40-million-strong Nadhlatul Ulama Muslim organization. In December, Wahid shocked his followers when he suggested, following a meeting at Suharto's home, that the former President should be invited to join discussions over the nation's future, if only to stop him from intervening from behind the scenes. In the past two months, Wahid, whose National Awakening Party is expected to win 20% of the votes in June, has become a regular visitor to Suharto's home. While he says that, if elected, he would put the former strongman on trial, Wahid is now calling on Indonesia's students to stop their protests against Suharto and his family, whose Jakarta homes are guarded day and night by scores of troops. Wahid says the Suharto-bashing should be temporarily shelved, in the interest of national stability: "I'm trying to save them from the students for the sake of economic recovery." Even before Wahid adopted his conciliatory stance, it was already evident that the investigation into the former President's alleged abuses of power was more show than substance. In June, during the early euphoria of reformasi (the student-led movement against nepotism and corruption), then Attorney General Soedjono Atmonegoro asked for full independence--"just like in America"--to conduct a probe of Suharto. He was fired on June 15, five hours after he submitted to Habibie his first report, which alleged that Suharto had misused billions of dollars amassed by charitable foundations. Habibie replaced Soedjono with three-star general Andi Ghalib, a Suharto loyalist. Despite a marathon 12-hour questioning of the ex-President's businessman son Hutomo Mandala Putra ("Tommy") last week, Ghalib has so far declined to lay charges against Suharto, or even name him as suspect. "The investigation is not going anywhere," says Soedjono. Like many others, his early faith in reformasi is waning. "I must have been dreaming," he now says.

The crucial event in Suharto's rehabilitation came on Jan. 4 in the reshuffle of some 100 top military officials. The day before the reorganization, General Wiranto held a lengthy consultation with his former commander-in-chief. The shakeup was lauded for purging radical Islamic allies of Suharto's son-in-law Prabowo Subianto (who now spends part of his time in self-imposed exile in Boston). At the same time, however, the move shored up Suharto's influence within the army. Two of the military's most senior posts, including General Affairs Chief and Intelligence Chief, were filled by men who, like Wiranto, were former Suharto adjutants. "I don't trust Wiranto at all," says Muslim leader Rais, a leading presidential candidate. "He can't distinguish between his loyalty to Suharto and his loyalty to the people."

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