Clinton ties to Riady problematic:

As Hillary Clinton's appointment as the next U.S. secretary of state solidifies, analysts say Obama's administration should keep a close tab on her relationship with a prominent Indonesian businessman, James Riyadi.

Ties between the Indonesian mogul James Riady -- whose family has substantial interests in real estate, retailing and media in Asia -- and the Clintons, should be scruitinized because of Riady's previous involvement in U.S. politics.

In 2001, Riady paid a record $8.6 million in fines to the United States government for having provided illegal funds during Bill Clinton's election campaign in the 1990s.

Chicago's Northwestern University political economy professor, Jeffrey Winters, told Reuters in an email that the relationship "requires the utmost vigilance on both sides of the Pacific now that Hillary Clinton is slated to become the next Secretary of State".

"The fact that the Riadys were involved in a corruption scandal in the U.S. involving the Clintons is unimportant compared to the leverage the Clinton connection gives the Riadys in Jakarta business and government circles," Winters said.

Barack Obama should place the Riadys high on the Clinton Watch List of sordid relationships and potential political land mines, so as to avoid any potentially devastating future scandals, he added.

An Australian scholar also warned Obama that Clinton's ties to Riady may pose a risk to the two countries' trade and investment relations.

"Clearly, both Indonesian and U.S. business interests will be exploring every potential point of leverage to gain advantage in trade and investment dealings, both at the policy level and privately," said Richard Robison, emeritus professor at Murdoch University, Perth. (amr)

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