Sun, 18 Oct 2009
Indonesia's Corruption Eradication Commission appears to have wandered too close to the country's power centers, kicking off an ugly squabble in which a top police official is accusing anticorruption officials of abuse of power and bribery, and lawyers for the officials are accusing a top cop of the same thing.

While abuse of power charges are being hurled by both sides, the beleaguered anti-corruption agency is being threatened not only by the country's law enforcement system, which is widely regarded as corrupt, but by lawmakers who want to defang the commission, known by its Indonesian initials KPK. In addition, 10 members of the previous House of Representatives, whose terms ended last week, are in jail as a result of commission investigations and nearly 150 other officials, businessmen, bankers and cops also have been convicted– including a former central bank official who is an in-law of President Susilo Bambang Yudhoyono.

The many twists and turns of the commission's current problems are dizzying. But the end result seems certain to leave the body, often cited as a success story for Indonesia, badly damaged and perhaps mortally wounded.

With a reputation as one of the most corrupt countries in Asia, there are plenty more KPK targets, of course. But the commission's travails raise questions about Indonesia's ability to sustain its battle against graft, an issue that could harm efforts to attract foreign investors, who have long been wary of the country's dodgy legal system. Yudhoyono came into office in 2004 promising a crusade to cut back on corruption and his reelection last July to a second five-year term was won at least partly on his reputation as a reformer.

Like other new democracies, Indonesia is also seeing corruption become more decentralized, say some. The US Agency for International Development (USAID), in a recent report, found that "Although corruption has long been endemic in Indonesia, investors find it more unpredictable now than it was during the Suharto years. A single bribe to a senior official might or might not suffice. Other demands can surface at any time. Such uncertainty is a business risk and makes Indonesia a costlier place to do business than several of its regional competitors."

The legal system, the report found, "is corrupt and unpredictable, so investors do not count on justice or even timely resolution of commercial disputes." Development of a culture of corporate governance that protects the rights of minority investors "is still in its infancy in Indonesia. Some businesses cite weaknesses in this area as an impediment to rapid growth in FDI."

The country is tied for 126th of 180 countries on Transparency International's annual corruption index, along with Eritrea, Ethiopia, Guyana, Honduras, Libya, Mozambique and Uganda.

The KPK is supposed to be fixing all that. With powers of investigation and prosecution plus its own court. The commission, established in 2002 but becoming more prominent under Yudhoyono, has had real teeth and a stunning 100 percent conviction rate. But perhaps as a result of the commission's zeal, last Tuesday the House of Representatives pushed through last-minute legislation just before leaving office that takes away the agency's ability to determine the admissibility of wiretaps and passes that authority to 33 newly formed district anti-corruption courts whose members are viewed as likely to be more malleable (and bribable) than the current centralized court. The legislation also gives the notorious Attorney General's Office, several of whose prosecutor are in jail as a result of KPK investigations, greater oversight over prosecutions brought by the KPK.

The current controversy revolves around Anggoro Widjojo, the director of a company called PT Mararo Radiokom, who allegedly bribed at least four lawmakers and several forestry ministry officials in connection with an Rp180 billion (US$12.7 million) radio communication system procurement project for the Forestry Ministry. One of the four lawmakers, Yusuf Erwin Faishal, is already in prison and the other three have been named as suspects in the case. Anggoro fled the country and has been spotted in Singapore.

In an apparently unrelated case, the commission's chairman, Antasari Azhar is also awaiting trial on murder charges in the gangland style assassination of a businessman. Antasari and the victim had both been sleeping with the same woman, a golf caddy, police say. Since his arrest, however, Antasari has accused members of the commission of seeking bribes from Anggoro, an accusation that led to the current action against the KPK.

Allegedly, Susno Duaji, the National Police Head of Detectives, met with Anggoro in Singapore on July 10, three days after the KPK named him a suspect in the bribery case. The KPK reportedly tapped Susno's phone and was busily gathering evidence to charge him with corruption. Susno publicly expressed his anger over the wiretap, that also reportedly linked him to bribery in the collapse due to fraud of Bank Century late last year. Talk of bribery over the phone, he said, was simply a "counterintelligence measure."

Susno responded by charging two KPK deputy chairmen, Chandra Hamzah and Bibit Samad Rianto, with abuse of power. Taufik Basari, a lawyer for the two, then filed a new complaint against Susno on Monday, claiming he had abused his authority by meeting with the fugitive businessman.

"The KPK placed Anggoro on its wanted list as of July 7, so when Susno and police investigators met Anggoro in Singapore, it could be considered a breach of the police's code of ethics," Taufik told reporters after filing the complaint.

The lawyers for Chandra and Bibit also reported Susno to the police's Internal Affairs Division for suspected abuse of authority for accusing the two commissioners of taking bribes in connection with the earlier lifting of a travel ban on Anggoro.

"We hope [National Police Chief] Gen. Bambag Hendarso Danuri takes firm action against Susno and handles this case professionally," Ahmad Rifai, another lawyer for the two, told reporters. "Susno admitted to the KPK's commissioners on July 15 that he met with Anggoro in Singapore."

Susno has also been accused by the KPK of sending threatening text messages to anti-corruption agency officials including the heads of the graft investigation and prosecution units as well as two deputy chairmen over a case involving Bank Century, which was a smallish bank with powerful political and business connections. Bank Century nearly failed last November but was saved when Central Bank officials poured hundreds of millions of dollars into keeping it afloat. Susno is believed to be involved in that case as well.

Boediono, then the central bank head and now Yudhoyono's vice president-elect, and Sri Mulyani Indrawati, the finance minister, have been unofficially accused of improperly pouring in a series of short-term liquidity injections amounting to Rp6.7 trillion - five times the amount of liquidity authorized by the legislature - in the process of taking over the bank. Their defenders say they were doing no more than what the world's other finance officials were doing at the time, and that accusations against them are diminishing the sway of two of Yudhoyono's most important financial system reformers. Neither is said to be seriously threatened.

Tantular and owners of major accounts at Bank Century were accused of making massive withdrawals even during the period government officials were attempting to stabilize the bank and after allegations of fraud had been made.

Among those major account holders were said to be Putra Sampoerna, the patriarch of the Sampoerna tobacco concern and one of Indonesia's richest men. (Sampoerna sold the tobacco interests to Philip Morris for US$5.4 billion some years ago.) The KPK was said to be investigating whether Boedi Sampoerna, Putra's son, was able to illegally withdraw US$18 million of the $200 million he had deposited at the bank The state-owned PT TimahTbk tin mining concern and the state pension fund PT Jamsostek also reportedly were involved in seeking the bailout money, among others.
Tantular was given what critics called a slap on the wrist, sentenced to four years in jail and fined Rp50 billion (US$5 million) after being convicted on only one of three counts against him. Prosecutors failed to prove that he had called the shots at the bank, or was responsible for issuing fraudulent loans and misusing customers' money, which almost caused the bank to collapse. Last Friday, the bank changed its name in an attempt to escape its troubled past.

KPK officials said they would take the abuse of authority complaint against Susno to Yudhoyono himself and demand the detective chief's suspension. A number of NGOs and legislators have also called for Susno's suspension.

The Indonesian Anti-Corruption Society, or Maki as it is known, in the meantime filed a pretrial motion asking the South Jakarta District Court to throw out the charges against Chandra and Bibit, and to order the National Police to revoke their status as bribery suspects.

"The police had no preliminary evidence to support their accusations against the two," said Bonyamin Saiman, the chairman of the reform organization. The National Police in turn argued that the case could not be challenged through a pretrial motion, and even if it could Maki did not have the authority to file such a motion.



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