Identifier
Created
Classification
Origin
06JAKARTA13521
2006-12-19 05:54:00
CONFIDENTIAL
Embassy Jakarta
Cable title:  

FORMER MINISTER DETAINED ON CORRUPTION CHARGES

Tags:  ECON KCOR ID 
pdf how-to read a cable
VZCZCXYZ0001
PP RUEHWEB

DE RUEHJA #3521/01 3530554
ZNY CCCCC ZZH
P 190554Z DEC 06
FM AMEMBASSY JAKARTA
TO SECSTATE WASHDC PRIORITY 2517
C O N F I D E N T I A L JAKARTA 013521 

SIPDIS

SIPDIS

E.O. 12958: DECL: 12/19/2016
TAGS: ECON KCOR ID
SUBJECT: FORMER MINISTER DETAINED ON CORRUPTION CHARGES

REF: A. JAKARTA 12254


B. JAKARTA 4520

C. JAKARTA 3490

D. JAKARTA 1652

Classified By: POLITICAL OFFICER KEITH BEAN FOR REASONS 1.4 (b) and (d)
.

C O N F I D E N T I A L JAKARTA 013521

SIPDIS

SIPDIS

E.O. 12958: DECL: 12/19/2016
TAGS: ECON KCOR ID
SUBJECT: FORMER MINISTER DETAINED ON CORRUPTION CHARGES

REF: A. JAKARTA 12254


B. JAKARTA 4520

C. JAKARTA 3490

D. JAKARTA 1652

Classified By: POLITICAL OFFICER KEITH BEAN FOR REASONS 1.4 (b) and (d)
.


1. (U) Former Minister of Oceans and Fisheries Rokhmin
Dahuri was detained on November 30 in conjunction with a
Commission for the Eradication of Corruption (KPK)
investigation into his administration of an off-budget fund
of nearly IDR 32 billion (approximately USD 3.5 million). The
fund allegedly was used in part for his own benefit,
according to press reports. In addition to this on-going
case, four high level corruption cases in Indonesia this year
resulted in convictions. Dahuri's arrest comes amid
indications that public confidence in the KPK may be waning
even as Vice President Kalla and other GOI officials accuse
the KPK of going too far. End Summary.


2. (C) Former Minister Dahuri's arrest follows the arrest of
the former Secretary General of the Oceans and Fisheries
Ministry, Andin H. Taryoto, after the KPK found evidence that
Dahuri had ordered Taryoto to collect the off-budget funds.
According to media accounts of the investigations, the slush
fund was allegedly created between April 2002 and March 2005
and was partially financed by diverting one percent of the
ministry's budget for implementing projects in Indonesia's
provinces. The fund was allegedly topped off with donations
from external sources. Press reports name Tomy Winata, a
wealthy crony of former President Soeharto with ties to a
number of illicit businesses, as one source of external
funding. The KPK reportedly questioned him about
contributions he allegedly made to secure licensing for a
fishing company. Winata publicly denied any involvement,
saying his fishing company did not exist at the time of the
alleged contributions.


3. (U) In February, former Minister of Religion Said Agil
Hussein Al Munawar and former Director General for Islamic
Guidance and Hajj Affairs Taufiq Kamil were convicted of
embezzling nearly USD 71 million in funds earmarked for
Indonesians performing the Hajj. (Ref A). In August, the
Anti-corruption Court sentenced former Investment
Coordinating Board Chairman Theo F. Toemion to six years'

imprisonment, fined him, and ordered him to pay USD 2.5
million in restitution for misappropriating state funds
earmarked for investment campaigns. (Ref B). In September,
former KPU Commissioner Daan Dimara was convicted of
corruption and sentenced to four years in prison for his role
in rigging procurement contracts for the 2004 general
elections. Of these high-profile cases, only the Daan Dimara
case was prosecuted by the KPK. The others were brought
forward by the Attorney General's Office and the Inter-Agency
Corruption Eradication Team.


4. (U) While Dahuri claims that the off-budget fund was
administered for the benefit of the ministry and its
personnel, he is accused of tapping the funds for his
personal benefit. Press reports allege that the fund was
used to pay Dahuri an IDR 356 million (USD 40,000) honorarium
for delivering a lecture at the Agricultural Institute of
Bogor (AIB),despite the fact that AIB reportedly only
provides an IDR 3 million (USD 330) honorarium for such
speeches.


5. (C) The Dahuri case targets the widespread, but illegal,
practice of co-mingling state and private funds to create
off-budget slush funds for use by ministers and other high
government officials. Off-budget funds were common until
recently, but the 2002 State Treasury Law outlawed the
practice by requiring all state funds to pass through the
Treasury. Despite this, Ministry of Finance implementation
of this law has proceeded slowly, and off-budget funds
continue to exist and have been tolerated. Because the
Dahuri case targets this widespread form of corruption, a
prosecution and conviction could reinvigorate the KPK drive
to tackle official corruption and serve notice that his
aspect of business as usual will no longer be tolerated.


6. (C) Opponents from the Indonesian Democratic Party
Struggle (PDI-P) have criticized the KPK for pursuing a
political agenda, noting that all of the investigations have
targeted former ministers from PDI-P, while ignoring allies
of President Yudhoyono. The KPK denies these accusations,
citing as evidence to the contrary its prosecution of
provincial governors in East Kalimantan and Sulawesi Tenggara
who are members of the Golkar party, a partner in SBY's
coalition government. Vice President Jusuf Kalla, also the
Golkar party chairman, publicly denied that the KPK is
targeting former ministers from President Megawati's
government.

7. (SBU) To counter a perception of waning relevance, the
KPK launched a campaign to focus public attention on its
anti-corruption fight, using the slogan, "Look Fight, and
Report." The goal of the campaign is not clear. According
to the KPK, the public has referred over 16,000 cases of
suspected corruption to the KPK since 2003. According to
media accounts, KPK Deputy Chairman Erry Riyana Hadjapemekas
admitted that the campaign has no quantitative goals to
increase public referrals.


8. (C) Indonesian Corruption Watch's Teten Masduki told us
that the KPK's record of 14 convictions and a number of other
current prosecutions is commendable. He noted that each
conviction has resulted in a heavy sentence , and observed
that appeals have been met with even heavier sentences.
Still, Masduki told us he believed the KPK has chosen easy,
high profile targets in which third parties have handed the
KPK well-substantiated cases on a silver platter. In
Masduki's opinion, the KPK has had little deterrent effect
and has not taken on any difficult of highly sensitive cases.
The lack of aggressive action in rooting out corruption
prompted noted Indonesian human rights lawyer Todung Mulya
Lubis to observe that "time is running out for the KPK to
take a more aggressive approach or risk becoming irrelevant
in the public mind."


9. (SBU) Though many anti-corruption campaigners accuse the
KPK of not doing enough, the KPK has at the same time been
compelled to allay concerns on the part of Vice President
Kalla and others that the anti-corruption drive may be going
too far. Kalla said the anti-corruption drive has interfered
with normal government business, alleging that many
government officials are deterred from making once-routine
financial decisions for fear of being charged with corruption
if the contracts prove damaging to the state budget. Kalla
has called for greater oversight.


COMMENT
--------------


10. (C) The KPK has been cautious in using its mandate to
root out corruption. As a new institution, its deliberate
approach is not surprising. The KPK must navigate between
doing too little or too much. End Comment.
HEFFERN