Things seemed to be looking up for Indonesia in July, when President Abdurrahman Wahid, widely viewed as corrupt and incompetent, finally was voted out of office--and Vice President Megawati Sukarnoputri assumed leadership. Megawati, the daughter of Indonesia's founding father, Sukarno, is seen by many as a clean break from the legacy of General Suharto, who ruled the vast archipelago with an iron fist for more than 30 years.

But to write a new chapter of Indonesian history, Megawati must first subordinate the powerful military to civilian control and resolve the conflicts in Aceh and Irian Jaya, where separatist movements have battled with Indonesian forces for decades. Claiming to assist this worthy task, the Pentagon, White House and a consortium of corporations want to renew weapons sales and military training.

Washington applauded Megawati's choice of a stable of advisers with close ties to

Megawati greets east Timor independence leader Xanana Gusmâo. ADEK BERRY/AFP

international lending institutions and U.S. corporations. Finance Minister Boediono is the former director of the World Bank's Indonesia office and worked for Bank of America in Jakarta. Laksamana Sukardi, the new minister of state-owned enterprises, is a former Citibank executive. These choices demonstrate Megawati's commitment to creating a favorable climate for investment.

Throughout Indonesia, U.S. corporations doing business there benefit from a cowed and cheap work force, nonexistent labor and environmental protections and generous tax breaks. But as she flings open the door to businesses, Megawati slams the door on negotiated solutions to the bloody conflicts in Aceh and Irian Jaya.

While Defense Minister Matori Abdul Djalil is a civilian, other military advisers include Lt. Gen. Agum Gumelar, whose ties to the notorious Kopassus counter-insurgency units are well known, and Lt. Gen. Hari Sabarno, who adamantly opposes autonomy in Aceh and Irian Jaya.

These two provinces are the sites of massive operations by oil giant ExxonMobil and mining company Freeport-McMoRan, respectively. ExxonMobil pays the Indonesian military millions of dollars to protect its oil fields and operations in Aceh, an arrangement that led to a recent lawsuit by Acehnese villagers, who charge that soldiers on the company's payroll were responsible for rape, torture and murder.

Historically, the United States has consistently armed Indonesia's military with everything from F-16 fighter planes to M-16 combat rifles. Since Indonesia's invasion of East Timor in 1975, in which 200,000 people were killed, the United States has transferred more than $1 billion in weaponry to Jakarta.

Congress stanched the flow of weapons following the 1991 Santa Cruz massacre in East Timor, where soldiers wielding M-16s mowed down 270 unarmed people. Congress strengthened the ban in response to military and paramilitary violence after East Timor's vote for independence in 1999. Central to this legislation are criteria for the resumption of military ties, including the return of East Timorese refugees and prosecution of soldiers involved in human rights violations.

Two years after the violence, a newly independent East Timor is still struggling to recover, and Indonesia has failed to meet the congressional criteria. Violence in Aceh and Irian Jaya continues to escalate. Despite these grim realities, officials in Washington are bending over backward to re-engage with the military. Defense Secretary Donald Rumsfeld recently said he is "anxious to re-establish the military-to-military relationship with Indonesia."

While Bush himself is not well briefed on the region--his one remark on the conflict in East Timor during his campaign was an awkward reference to the "East Timorians"--his backers in the oil, gas and other industries are urging that the ban be lifted. The U.S.-ASEAN Business Council, a private body made up of the heads of corporations with interests in Southeast Asia--including ExxonMobil, Freeport-McMoRan, Boeing and Coca-Cola--released a report in February urging the new administration to "lift the embargo on military equipment and training while re-establishing direct military-to-military contacts."

The Council on Foreign Relations also argues in a July report that the ban on military sales and training is "heavy-handed" and "short-sighted." Their report concludes that "the United States must cease hectoring Jakarta and re-engage Indonesia's army." Nearly one-third of the report's 27-member panel is made up of corporate representatives, including ExxonMobil and baked-goods giant Sara Lee, both of which have extensive investments in Indonesia.

Given the report's pro-weapons-sales position, it is not surprising that Dov Zakheim, a former Reagan official who just signed on as the comptroller in Bush's Pentagon, drafted the report. Between working for Reagan and Bush II, Zakheim was a lobbyist for weapons manufacturers like McDonnell Douglas (now part of Boeing), promoting arms sales to Saudi Arabia, Israel and elsewhere.

Despite the push coming from the Pentagon, White House and big business, many in Congress oppose re-establishing military ties. Most prominent among them is Sen. Tom Harkin (D-Iowa). He visited a church in East Timor just days before the 1999 vote, where hundreds sought refuge from the military violence. Everyone he met was later killed. In memory of that horror and because no one has been prosecuted for that crime, he pledges opposition to the resumption of military aid: "I'll do everything I can to stop it."

Frida Berrigan is a research associate with the Arms Trade Resource Center.