In 1959, Pauker set out the lessons of the PSI's electoral isolation and Sumitro's abortive Outer Islands Rebellion in a widely read paper entitled "Southeast Asia as a Trouble Area in the Next Decade." Parties like the PSI were "unfit for vigorous competition" with communism, he wrote, "Communism is bound to win in Southeast Asia…unless effective countervailing power is found." The "best equipped" countervailing forces, he wrote, were "members of national officers corps as individuals and the national armies as organizational structures."
From his exile in Singapore, Sumitro concurred, arguing that his PSI na dMasjumi parties, which the Army had attacked, were really the Army's "natural allies." Without the, the Army would find itself politically isolated, he said. But to consummate their alliances "the Sukarno regime must be toppled." Until then, Sumitro warned, the generals should keep a "close and continuous watch" on the growing and powerful communist peasant organizations. Meanwhile, Sumitro's Ford scholar protégés in Jakarta began the necessary steps toward rapprochement.
Fortunately for Ford and its image, the Army had a school: SESKOAD (Army Staff and Command School). Situated 70 miles southeast of Jakarta in cosmopolitan Bandung, SESKOAD was the Indonesian Army nerve center. There, generals decided organizational and political matters, senior officers on regular rotation were "upgraded" with manuals and methods picked up at the US Command school back in Fort Leavenworth, Kansas.

When the Berkeley team phased itself out in 1962, Sadli, Widjojo, and others from the Faculty began regular trips to Bandung to teach at SESKOAD. Ford's Frank Miller-who replaced Harris in Jakarta and who, like Harris, had worked under Ford President Hoffman in Germany-says that they "taught economic aspects of defense."

Pauker tells a different story. Since the mid '50s, he had come to know the Army General Staff rather well, first on the MIT team, then on trips for RAND. One good friend was Colonel Suwarto (not to be confused with General Suharto), the deputy commander of SESKOAD and a 1959 Fort Leavenworth graduate. In 1962, Pauker brought him to RAND.

Besides learning "all sorts of things about international affairs" while at RAND, Suwarto also saw how RAND "organizes the academic resources of the country was consultants," Pauker says. According to Pauker, Suwarto had "a new idea" when he returned to Bandung. "The four of five top economists became 'cleared' social scientists lecturing and studying the future political problems of Indonesia in SESKOAD."

In effect, this group became the Army's high-level civilian advisors. They were joined at SESKOAD by other PSI and Masjumi alumni of the university programs-Miriam Budihardjo from Pauker's MIT study group, and Selosoemardjan from Kahin's program at Cornell, as well as senior faculty from the nearby Bandung Institute of Technology, where the University of Kentucky had been "institution-building" for AID since 1957.

These economists were quickly caught up in the general's anti-communist conspiracy. Lieutenant General Achmad Yani, Army commander-in-chief had drawn around him a "brain trust" of generals. It was an "open secret," says Pauker, that Yani and his brain trust were discussing "contingency plans" which were to "prevent chaos should Sukarno die suddenly." The contribution of Suwarto's mini-RAND, according to Colonel Willis G. Ethel, US defense attache in Jakarta at the time, was that the professors "would run a course in this contingency planning." Col. Ethel was a close confidant of Commander-in-chief Yani and others of the Army high command. He even introduced them to golf.

Of course, it wasn't "chaos" of the Army planners were worry about, but the PKI. "They weren't about to let the Communists take over the country," Col. Ethel says. Moreover, any but the most dense officer or advisor knew that since there was immense popular support for Sukarno and the PKI, a lot of blood would flow when the showdown came.

Other institutions joined the Ford economists in preparing the military. High-ranking Indonesian officers had begun US training programs in the mid '50s. By 1965 some 4000 officers had been taught big-scale army command at Fort Leavenworth and counter-insurgency at Fort Bragg. Beginning in 1962, hundreds of visiting officers at Harvard and Syracuse were provided with the skills for maintaining a huge economic, as well as military, establishment, with training in everything from business administration and personnel management to air photography and shipping. AID's "Public Safety Program" in the Philippines and Malaya trained and equipped the Mobile Brigade of Indonesian military's fourth arm, the police.

While the Army developed expertise and perspective (courtesy of the generous American aid), it also increased its political and economic influence. Under the martial law declared by Sukarno at the time of the Outer Islands Rebellion, the Army had become the predominant power in Indonesia. Regional commanders took over provincial governments-depriving the Communist PKI of its plurality victories in 1957 local elections. Fearful of a PKI sweep in the planned 1959 national elections, the generals prevailed on Sukarno to cancel them for six years. Then they moved quickly into the upper reach of Sukarno's "guided democracy," increasing the number of ministries under their control right up to the time of the coup. Puzzled by the Army's reluctance to take complete power, journalists called it a 'creeping coup d'etat." General Nasution termed it the "Middle Way."

The Army also moved into the economy, first taking "supervisory control," then key directorship of the Dutch properties that the PKI unionists had seized "for the people" during the confrontation over West Irian in late 1957. As a result, the generals controlled plantations, small industry, state-owned oil and tin, and the state-run export-import companies, which by 965 monopolized government purchasing and had branched out into sugar milling, shipping and distribution.

Those high-ranking officers not born into Indonesian aristocracy quickly married in, and in the countryside they firmed up alliances-often through family ties-with the santri Moslem landowners who were the backbone of the Masjumi Party. "The Army and the civil police," wrote Robert Shaplen of the New York Times, "virtually controlled the whole state apparatus." American University's Willard Hanna called it "a new form of government-military-private enterprise."

The economists "economic aspects of defense" thus became a wide-rangin subject. To make it even broader, the professors undertook preparing post-Sukarno economic policy at SESKOAD, too.

Deprived of their victory at the polls and unwilling to break with Sukarno, the Communist PKI tried to make a poor best of this "guided democracy," participating with the Army in coalition cabinets. Pauker has described the PKI strategy as "attempting to keep the parliamentary road open," while seeking to come to power by "acclamation." That meant building up PKI prestige as "the only solid, purposeful, disciplined, well-organized, capable political force in the country," to which Indonesians would turn "when all other possible have failed."

By 1963, three million Indonesians, most of them in heavily populated Java, were members of PKI, and an estimated 17 million were members of its associated organizations in 1963-making it the world's largest Communist Party outside Russia and China. At Independence the party had numbered only 8000.

In December 1963, PKI Chairman D.N. Aidit gave official sanction to "unilateral action" which had been undertaken by the peasants to put into effect a land reform and crop-sharing law already on the books. Though landlords' holdings were not large, less than half of Indonesian farmers owned the land they worked, and of these, the majority had less than an acre. As the peasants' "unilateral action" gathered momentum, Sukarno, seeing his coalition endangered, tried to check his force by establishing land reform courts which included peasant representatives. But in the countryside, police continued to clash with peasants and made mass arrests. In some areas, santri youth groups began murderous attack on peasants.
Since the Army held state power in most areas, the peasants' "unilateral action" was directed against its authority. Pauker calls it "class struggle in the countryside" and suggests that the PKI had put itself "on a collision course with the Army." But unlike Mao's Communists in pre-revolutionary China, the PKI had no Red Army. Having chosen the parliamentary road, the PKI was stuck with it. In early 1965, PKI leaders demanded that the Sukarno government (in which they were cabinet ministers) create a people's militia-five million armed workers, ten million armed peasants. But Sukarno's power was hollow. The Army had become a state within a state. It was they-and not Sukarno or the PKI-who held the guns.

The test of the strength came in September 1965. On the night of the 30th, troops under the command of dissident lower-level Army officers, in alliance with officers of the small Indonesian Air Force, assassinated General Yani and five members of his SESKOAD "brain trust." Led by Lt. Colonel Untung, the rebels seized Jakarta radio station and next morning broadcast that their September 30th Movement was directed against the "Council of Generals," which they declared was CIA-sponsored and had itself planned a coup d'etat for Armed Forces Day, four days later.

Untung's preventive coup quickly collapsed. Though he did not denounce it, Sukarno, hoping to restore the pre-coup balance forces, gave it no support; on the other hand, the PKI had prepared no street demonstration, no strikes, no coordinated uprising in the countryside. For their part, their dissidents missed assassinating General Nasution and apparently left General Suharto off their list; Suharto rallied the elite paracommandos and units of the West Java division, the Siliwangi, against Untung's colonels. Untung's trrops unsure of themselves, their mission and their loyalties, made no stand as Suharto drove them from their strong-points. It was all over in a day.

They Army high command quickly blamed the Communist for the coup, a line the Western press had followed ever since. Yet the utter lack of activity in the street and the countryside makes PKI involvement unlikely, and many Indonesia specialists believe, with Dutch scholar W. F. Wirtheim, that "the Untung coup was what its leader…claimed it to be-an internal army affair reflecting serious tensions between officers of the Central Java Diponegoro Division, and the Supreme Commander of the Army in Jakarta…"

Leftists, on the other hand, assumed after the ensuing massacres and Sukarno's overthrow that the CIA had a heavy hand in the affair. Indeed, embassy officials had long wined and dined the student apparatchiks who rose to lead the demonstrations that brought Sukarno down. And old Indonesia hands casually mention the CIA's connections with the Army, especially with Intelligence Chief Achmed Sukendro, who retrained his agents after 1958 with U.S. help and studied at the University of Pittsburgh in the early '60s. But Sukendro and most other members of the Indonesian high command were equally close to the embassy's military attaches, who seem to have made Washington's chief contracts with the Army both before and after the attempted coup. And considering the make-up and history of the generals and their "modernist" allies and advisors, it is clear that at this point neither the CIA nor the Pentagon needed to play any more than a subordinate role.

The professors may have helped lay out the Army's contingency plans, but no one was going to ask them to take the streets and make the generals' "revolution". Fortunately, they could leave that to their students. Lacking a mass organization, the Army depended on the students to give authenticity and "popular" leadership in the events that followed. It was the students who demanded-and got-Sukarno's head; and it was the students-as propagandists-who carried the cry of jihad (religious war) to the villages.

In late October, Brigadier General Sjarif Thajeb-the Harvard-trained Minister of Higher Education-brought student leaders together in his living room to create the Indonesian Student Action Command (KAMI). Many of the KAMI leaders were the older student apparatchiks who had been courted by the U.S. Embassy. Some had traveled to the U.S. as American Field Service exchange students, or on year-long jaunts in a "Foreign Student Leadership Project" sponsored by the U.S. National Student Association in its CIA-fed salad years.

Only months before the coup, U.S. Ambassador Marshall Green had arrived in Jakarta, bringing with him the reputation of having masterminded the student overthrow over Syngman Rhee in Korea and sparking rumors that his purpose in Jakarta was to do the same there. Manuals on student organizing in Korean and English were supplied by the embassy to KAMI's top leadership soon after the coup.

But KAMI's most militant leadership came from Bandung, where the University of Kentucky had mounted ten-year "institution-building" program at Bandung Institute of Technology, sending nearly 500 hundred of their students to the U.S. for training. Students in all Indonesia's elite universities had been given paramilitary training by the Army in a program for a time advised by an ROTC colonel on leave from Berkeley. Their training was "in anticipation of a Communist attempt to seize the government,": writes Harsja Bachtiar, an Indonesian sociologist (alumnus of Cornell and Harvard).

In Bandung, headquarters of the aristocratic Siliwangin Division, student paramilitary training was beefed up in the months preceding the coup, and santri student leaders were boasting to the Kentucky friends that they were developing organization contacts with extremist Moslem youth groups in villages. It was this group that spearheaded the massacre of PKI followers and peasants.

At the funeral of General Nasution's daughter, mistakenly slain in the Untung coup, Navy chief Eddy Martadinata told santri students to "sweep." This message was "that they could go out and clean up the Communist without any hindrance from the military," wrote Christian Science Monitor Asian Correspondent John Hughes. "With relish they called out their followers, stuck their knives and pistols in their waistbands, swung their clubs over their shoulders, and embarked on the assignment for which they had long been hoping." For starters, they burnt the PKI headquarters. Thousands of PKI and Sukarno supporters were arrested and imprisoned in Jakarta; cabinet members and parliamentarians were permanently "suspended"; and a purge of the ministries was begun.

On October 17, Col. Sarwo Edhy took his elite paratroops (known as the "red berets") into the PKI's Central Java stronghold in Bojolali-Klaten-Solo triangle. His assignment, Hushes says, was "the extermination by whatever means might be necessary, of the core of the Communist Party there." He found he had too few troops. "We decided to encourage the anti-communist civilians to help with the job," he told Monitor correspondent Hughes. "In Solo we gathered together the youth, the nationalist groups, the religious (Moslem) organizations. We gave them two or three days training, then sent them to kill Communists."

The Bandung engineering students, who had learned from the Kentucky team how to build and operate radio transmitter were tapped by Col. Edhy's elite corps to set up a multitude of small broadcasting units throughout strongly-PKI East and Central Java, some of which exhorted local fanatics to rise up against the Communist in Jihad. Providing necessary spare parts for these radios was one of the ways the U.S. Embassy found of helping the general's anti-communist pogrom that followed.

Time magazine described the slaughter in Java in mid September 1965: "Communists, Red sympathizers and their families are being massacred by the thousands. Backlands army units are reported to have executed thousands of Communists after interrogation in remote rails…Armed with wide-blade knives called parangs, Moslem bands crept at night into the home of Communists, killing the entire families and burying the bodies in shallow graves…The murder campaign became so brazen in pasts of rural East Java and Northern Sumatra, where the humid air bears the reek of decaying flesh. Travelers from these areas tell of small rivers and streams that have been literally clogged with bodies; river transportation has at places been seriously impeded."

Graduate students from Bandung and Jakarta were dragooned by the Army to research the number dead. Their report, never made public, but leaked by correspondent Frank Palmos-something of an insider-estimated a million victims. "In the PKI 'triangle stronghold' of Bojolali, Klaten, and Solo," Palmos said they reported, "nearly one third of the population is dead or missing." Most observers thinks their estimate high, positing a death toll of 3-500,000.
The KAMI students' most important task was bringing life in Jakarta to a standstill with anti-communist, anti-Sukarno demonstrations whenever necessary. By January, with Col. Edhy back in Jakarta addressing KAMI rallies, his elite corps providing KAMI with trucks, loudspeakers, and protection, KAMI demonstrators could tie up the city at will.

"The ideas that Communism was public enemy number one, that Communist China was no longer a close friend but a menace to the security of the state, and that there was corruption and inefficiency in the upper level of the national government were introduced on the streets of Jakarta," says Bachtiar, whose scholarly output includes recording these activities.
The old PSI and Masjumi leaders nurtured by Ford and its professors were at home at last. They gave the students advice and money, while the PSI-oriented professors maintained "close advisory relationshi" with the students, later forming their own Indonesian Scholars Action Command (KASI). One of the economists, Emil Salim, recently returned with a Berkeley PhD, was counted among the KAMI leadership. Salim's father had purged the Communist wing of the major pre-war nationalist organization, and then served in the pre-Independence Masjumi cabinets.

In January, the economists made Jakarta headlines with a week-long Economic and Financial Seminar at the Faculty. "Principally…a demonstration of solidarity among the members of KAMI, the anti-communist intellectuals, and the leadership of the Army," Bachtiar says, the seminar heard papers from General Nasution, Adam Malik, and others who "presented themselves as a counter-elite challenging the competence and legitimacy of the elite led by Presiden Sukarno."

It was Jakarta's post-coup introduction to Ford's economic policies.

In March Suharto stripped Sukarno of formal power and had himself named Acting President, tapping old political warhorse Adam Malik and the Sultan of Jogjakarta to join him in a ruling triumvirate. The generals whom the economists had known best at SESKOAD,--Yani and his brain trust-had all been killed. But with the help of Kahin's protégé, Selosoemardjan, they first caught Sultan's and then Suharto's ears, persuading them that the Americans would demand a strong attack on inflation and swift return to a "market economy." On April 12, the Sultan issued a major policy statement outlining the economic program of the new regime-in effect announcing Indonesia's return to the imperialist fold. It was written by Widjojo and Sadli.

In working out the subsequent details of the Sultans' program, the economists got aid from the expected source. When Widjojo got stuck in drawing up a stabilization plan, AID brought in Harvard economist Dave Cole, fresh from writing South Korea's banking regulations, to provide him with a draft. Sadli, too, required some post-doctoral tutoring. According to an American official, Sadli "really didn't know how to write an investment law. He had to have a lot of help from the embassy." It was a team effort. "We were all working together at the time-the 'economists', the American economists, AID," remembers Calvin Cowles, the first AID man on the scene.

By early September the economists had their plans drafted and the generals convinced of their usefulness. After a series of crash seminars at SESKOAD, Suharto named the Faculty's five top men (the "Berkeley Mafia") his team of Experts for Economic and Financial Affairs, an idea Ford man Frank Miller claims as his own.

Armed with Sadli's January 10, 1967 investment law, the economists could put on their old school ties and play host to the lords of the great American corporations. In August the Stanford Research Institute-a spin-off of the university-military-industrial complex-brought 170 "senior executives" to Jakarta for a three-day parley and look-see. "The Indonesians have cut out the cancer that were destroying their economy," an SRI executive later reported approvingly. Then, urging that big business invest heavily in Suharto's future, he warned that "military solutions are infinitely more costly."

In November, Malik, Sadli, Salim, Selosoemardjan, and the Sultan met in Geneva with a select list of American and European businessmen flown in by Time-Life. Surrounded by his economic advisors, the Sultan ticked off the selling point of the New Indonesia-"political stability…abundance of cheap labor…vast potential market…treasurehouse of resources." The universities, he added, have produced a "large number of trained individuals who will be happy to serve in new economic enterprises."

David Rockefeller, chairman of the Chase Manhattan Bank, thanked Time-Life for the chance to get acquainted with "Indonesia's top economic team." He was impressed, he said, by their "high quality of education."