SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.

Litigation Release No.17127 / September 12, 2001

   Accounting and Auditing Enforcement Release No. 1446 / September 12,
   2001

   UNITED STATES OF AMERICA AND SECURITIES AND EXCHANGE COMMISSION v.
   KPMG SIDDHARTA SIDDHARTA & HARSONO AND SONNY HARSONO, Civil Action No.
   H-01-3105 (S.D. Tex.) (filed September 11, 2001)

      SEC AND DEPARTMENT OF JUSTICE FILE FIRST-EVER JOINT CIVIL ACTION
      AGAINST KPMG SIDDHARTA SIDDHARTA & HARSONO AND ITS PARTNER SONNY
        HARSONO FOR AUTHORIZING THE PAYMENT OF A BRIBE IN INDONESIA

   On September 11, 2001, the Securities and Exchange Commission and the
   United States Department of Justice filed a joint civil injunctive
   action in the United States District Court for the Southern District
   of Texas, Houston Division, against KPMG Siddharta Siddharta & Harsono
   ("KPMG-SSH"), a public accounting firm in Jakarta, Indonesia and Sonny
   Harsono ("Harsono"), a partner of KPMG-SSH. KPMG-SSH is an affiliate
   firm of KPMG International. This is the first time that the Commission
   and the Department of Justice, both of which have jurisdiction over
   the antibribery provisions of the Foreign Corrupt Practices Act
   ("FCPA"), have combined to file a joint civil action.

   The complaint alleges that in 1999, Harsono authorized KPMG-SSH
   personnel to bribe an Indonesian tax official on behalf of one of
   KPMG-SSH's clients, PT Eastman Christensen ("PTEC"), an Indonesian
   company beneficially owned by Baker Hughes Incorporated ("Baker
   Hughes"). KPMG-SSH agreed to make the illicit payment to influence the
   Indonesian tax official to reduce a tax assessment for PTEC from $3.2
   million to $270,000. Harsono advised KPMG-SSH personnel that if Baker
   Hughes represented directly to KPMG-SSH, not through PTEC, that it
   wanted KPMG-SSH to make the illicit payment, KPMG-SSH would be willing
   to pay the Indonesian tax official. To conceal the improper payment,
   Harsono agreed with KPMG-SSH personnel that KPMG-SSH should generate
   an invoice that would include money for the payment to the Indonesian
   tax official and for KPMG-SSH's fees for services rendered. The false
   invoice, although purporting to be for professional services rendered,
   in reality represented $75,000 to be paid to an Indonesian tax
   official, and the remainder for KPMG-SSH's actual fees and applicable
   taxes. After receiving the invoice, PTEC paid KPMG-SSH $143,000 and
   improperly entered the transaction on its books and records as payment
   for professional services rendered. On March 23, 1999, PTEC received a
   tax assessment of approximately $270,000 from the Indonesian
   government, almost $3 million lower than the original assessment.