Brown scandal resurfacing?

Mar. 9, 2010

Sacramento Bee columnist Dan Walters has been covering California politics since 1975. No one writing about our beloved state government has more experience or authority.

But Walters did a curious thing in his March 3 column, titled “Brown’s back – with his baggage.” After spending the entire column talking about Attorney General/gubernatorial candidate Jerry Brown’s politics, personas and past tenure as California governor, he drops in this sentence near the end: “And then there’s the Brown family’s semi-secret financial ties to the military dictatorship of Indonesia, a book-length saga unto itself.”

Say what? Now I may still be relatively new to Sacramento, but others in the office who’ve been up here a few years were shaking their heads after reading that little line. Not really having a clue what Walters was talking about, I started digging though old newspaper articles for some kind of explanation. Though I didn’t find much, what I did locate made me reassess everything I knew about Jerry Brown and his father, the late Governor Edmund G. “Pat” Brown.

Much of what’s currently available about Brown and Indonesia comes from Walter’s reporting decades ago, though it’s clear the issue was hot in the late 1970s. A great source is this Walters story that ran in the Oct. 17, 1990 Lodi News-Sentinel, and forms much of the background for my own knowledge of the tale.

Back in the late 1960s, after Pat Brown ceded the governor’s mansion to Ronald Reagan, Brown went into private law practice. Among his clients was Pertamina, Indonesia’s state-owned oil and gas company.

Keep in mind that in the late 1960s, Indonesia was governed by the repressive Suharto regime, which had seized power in 1965 from the leftist Sukarno in a bloody coup that ultimately killed half a million people. To see Pat Brown’s name – inextricably wound up with California’s progressive politics – linked to Suharto’s is a shock indeed.

Anyway, Walters reported that Brown helped Pertamina’s boss Ibnu Sutowo get $13 billion in loans, which went into default after Sutowo got busted for corruption.

“Brown’s reward was a concession to market Pertamina’s oil in the United States,” Walters reported. “Brown’s law firm also represented Indonesia as a lobbyist in Washington.”

According to Walters’ reporting, the elder Brown insisted that his son, Jerry, rejected any financial interest in Brown’s Indonesian oil venture (though apparently daughter and former state treasurer Kathleen Brown did). But that doesn’t mean Gov. Jerry Brown didn’t have his own Indonesian troubles.

In the late 1970s, “A powerful coalition of business and labor interests began promoting a project to ship liquefied natural gas to California in huge tankers from Indonesia and Alaska and then-Gov. Jerry Brown launched an all-out drive to win approval of the LNG terminal,” Walters reported in the Mar. 15, 2001 Sacramento Bee. Pat Brown lobbied heavily for the terminal, which was to sit near Santa Barbara. Though approved, it was never built – concern over earthquakes and suddenly abundant LNG supplies brought about by industry deregulation ultimately killed the deal, reported Walters.

But that wasn’t the end of the story. Concurrent with the LNG terminal push, the California Air Resources Board (CARB) “adopted new requirements for the sulfur content of fuel oil,” Walters reported back in 1990. As a result, power plants had to buy their oil from Indonesian supplies, which had lower sulfur levels than that of, say, Alaska.

“Jerry Brown angrily denied suggestions that those actions were a conflict of interest, insisting that he had no personal involvement with Perta or Pertamina, although Perta and its executives had loaned or contributed some $70,000 to his 1974 campaign for governor,” Walters reported in 1990.

No one from the Brown campaign returned a call for comment on this story. Neither Brown’s recent Statements of Economic Interests nor his campaign finance reports suggest any contributions from sources like Perta, a marketing firm that dealt with Pat Brown’s own United States International Investment Corp., which handled his Indonesian concession.

Ironically, Indonesia today is a democracy, steadily emerging from its past military horrors. In many ways, its government is more stable than California’s, which is also a far cry from that which Brown left in 1983.

–Anthony Pignataro