In 1996, Prabowo led a team to secure the release of environmental researchers taken hostage by West Papuan guerrillas. He aborted a planned Red Cross supervised release of the hostages to prevent his sister-in-law from getting credit. According to Ed McWilliams, a retired U.S. diplomat, “The aborted hostage transfer led to a brutal campaign of reprisal attacks by the Indonesian military (largely Kopassus) against highland villages.” This campaign began with an assault from “an Indonesian military helicopter disguised to look like the helicopter that ICRC mediators had been using” in violation of well-established international humanitarian law.

As the tumult associated with the East Asian economic crisis in 1997-98 threatened the political legitimacy of the Suharto regime, Prabowo spearheaded campaigns to kidnap, arrest, intimidate and torture student activists. Protesting students at Trisakti University were killed and wounded by military snipers. Prabowo has acknowledged his role in the kidnappings, but has said his “conscience is clear.” Convicted by a court of honor for “exceeding orders,” Prabowo was forced to retire.

He is also accused of having a central role in sparking the May 14, 1998 anti-Chinese riots in Jakarta and other major urban areas. At the time, Prabowo was head of the Kostrad (the Army Strategic Reserve) based in the capital. In 2003, the National Commission on Human Rights (Komnas HAM) accused Prabowo of responsibility “for gross human rights violations that occurred during the extensive rioting in Jakarta in 1998.” The Komnas HAM report said that “security authorities at that time failed to curb the widespread riots that took place simultaneously.” The spread of the riots was a result of a specific policy based on the “similar pattern at almost all places where the riots took place, which began with provocation, followed by an attack on civilians.”

Shortly before Suharto resigned, Prabowo, backed by armed men, confronted the Army Chief of Staff Gen. Subagio at his home. The next morning Prabowo was removed as Kostrad commander. Later that day, B.J. Habibie succeeded Suharto as president, and Prabowo demanded command of the military. On May 22, he deployed troops around the presidential palace. Prabowo reportedly, “took his demotion badly – at one point strapping on a sidearm, summoning several truckloads of troops and confronting guards at the presidential palace as he tried to win an audience” with Habibie. Soon after he was forced to resign from the military. In a speech in late 2012 he said, "I am a retired lieutenant general who once attempted to overthrow a president. But I failed to do it, and I regret that I failed."  Recently, while campaigning in Aceh, Prabowo offered a vague apology for unnamed actions his troops took there.

After leaving the military Prabowo went into business and has tried to remake himself as a populist, becoming president of the Indonesian Farmers’ Association (HKTI) in 2004, while often arguing that Indonesia needed a strong, guiding hand - his. The same year, he tried unsuccessfully to become the Golkar (Suharto’s New Order party) nominee for President. In 2009 he was Megawati Sukarnoputri’s vice-presidential candidate (a PDI-P/Gerindra split ticket).

Until recently, Prabowo led most opinion polls of declared candidates for President. Jakarta Governor Joko Widodo (Jokowi), who officially entered the race in mid-March as the PDI-P candidate, is the current favorite.