NEW ATTORNEY GENERAL MAKING THE RIGHT MOVES ON

C O N F I D E N T I A L SECTION 01 OF 02 JAKARTA 002229 SIPDIS SIPDIS DEPT FOR EAP, EAP/MTS, INR/EAP, INL FOR BOULDIN DEPT FOR EEB/IFD/OMA DOJ FOR CRIM AAG SWARTZ, OPDAT FOR LEHMANN/ALEXANDRE/JOHNSON SINGAPORE FOR BAKER TREASURY FOR IA-BAUKOL DEPT PASS FEDERAL RESERVE SAN FRANCISCO FOR FINEMAN DEPT PASS EXIM BANK E.O. 12958: DECL: 10/10/2016 TAGS: PGOV EFIN KJUS PINR KCOR ID SUBJECT: NEW ATTORNEY GENERAL MAKING THE RIGHT MOVES ON ANTI-CORRUPTION FRONT REF: A. JAKARTA 1993 ¶B. JAKARTA 1920 Classified By: POL/C Joseph Legend Novak, for reasons 1.4(b) and (d). ¶1. (C) Summary: Since his appointment in May 2007, Attorney General Hendarman Supandji has made prosecuting anti- corruption cases his top priority. A career prosecutor with a well-deserved reputation for integrity and effectiveness, Supandji has added top-level staff to the Special Crimes Division, which handles corruption cases. He has also initiated new investigations into cases linked to former president Suharto and his family. Through his leadership, the Attorney General's Office (AGO) is now back at the center of the GOI's anti-corruption effort. End Summary. ¶2. (C) BUILDING ON A SOLID REPUTATION: Supandji was appointed Attorney General by President Yudhoyono as part of the May Cabinet reshuffle. Observers have repeatedly cited Supandji's reputation for personal integrity and his significant past experience prosecuting corruption cases as key factors in his appointment. In his previous positions as both Deputy Attorney General for Special Crimes and as chief of the Interagency Corruption Eradication Team (ICET),he oversaw successful prosecutions in several major corruption cases, including against a former Minister of Religious Affairs, the director of a state-owned insurance firm and a district court judge in Jakarta. Moreover, ICET pioneered a new model of interagency coordination among the AGO, police and financial regulators. This, according to contacts at the AGO, is becoming the standard model for handling all major investigations. ¶3. (C) Police contacts have privately praised the ICET approach, telling us that they are steadily getting better cooperation from the AGO. For example, a renewed emphasis on interagency coordination has been exhibited in counterterrorism investigations. (Note: The ICET program mandate expired in May. GOI officials are confident that the approach has already taken root in the interagency process and does not need to be formally revived. End Note.) ¶4. (C) A STRONG TEAM: Since taking over as AG, Supandji has made personnel moves to strengthen the capabilities of the Special Crimes Division, which now handles all corruption cases within the AGO. For example, the new Deputy for Special Crimes, Kemas Yahya Rachman, is an experienced prosecutor and former AGO spokesperson. In addition, Supandji selected Salman Maryadi as the Division's Director of Prosecutions. Maryadi is a highly respected prosecutor who led successful prosecutions against Jemaah Islamiyah (JI) co-founder Abu Bakar Ba'asyir and several suspects involved in the 2005 Bali bombings. (Note: Embassy contacts report that Maryadi may also be tapped to lead the upcoming prosecution of Abu Dujana, head of JI's military wing, who was apprehended earlier this year - see ref a. End Note.) ¶5. (C) Maryadi complements the appointment last December of another top-ranked prosecutor, Salim Muhammad, as Director of Investigations for Special Crimes. Muhammad has won convictions against a dozen JI-linked terrorists, including the perpetrators of the 2002 Bali bombings. Both Maryadi and Muhammad are long-time Mission contacts. ¶6. (C) RECOVERING STATE ASSETS: Publicly and privately, Supandji has identified corruption as a top priority and, in particular, the recovery of stolen state assets. Supandji has also taken clear aim at assets that are controlled by former president Suharto and his family. Some of his key steps in this area include: -- Last month, the AGO initiated a civil suit against the Suharto-linked Supersemar Foundation for alleged funding discrepancies resulting in $420 million in losses to the state (ref b). In a court session on August 8, the judge ordered the case into mediation and named Sulthoni, a senior South Jakarta judge, to serve as mediator. According to the JAKARTA 00002229 002 OF 002 court, proceedings will continue if the parties fail to reach a resolution after one month. Supersemar was represented by a high-powered defense team led by long-time Suharto associate Muhammad Assegaf. (Note: A member of the Muslim Defense Team, or "TPM," Assegaf has also served as defense counsel for Abu Bakar Ba'asyir.) -- The new AG has opened a formal investigation into the nefarious activities of Tommy Suharto, the former president's son. On August 8, Tommy ignored a request by the AGO to appear for questioning, claiming, like his father before him, to be too ill to attend. The AGO has named Tommy as a suspect in a corruption case involving the Clove Support and Marketing Board (BPPC),an infamous monopoly that the former president granted his son in 1992. The investigation is in part spurred by a June 28 order from a court in Guernsey, UK, where the GOI has been attempting to seize some $10 million in assets belonging to Tommy. The order extends the freeze placed on those assets for an additional five months during which time the GOI is directed to take demonstrable steps towards obtaining a money judgment against Tommy. -- Supandji has appointed a special team of 35 prosecutors to investigate cases surrounding Bank Indonesia Liquidity Assistance (BLBI),which was set up by the GOI to bail out ailing depositors during the financial crisis of 1997-98. According to press reports, only 20% of the money made available through BLBI was ever repaid, resulting in losses to the state of billions of dollars. Deputy AG for Special Crimes Rachman recently told the media that the AGO has enough evidence to commence formal investigations in two cases involving BLBI and are closely examining several more. Observers have speculated that the two cases referred to involve the Salim Group, owned by Anthony Salim, and Syamsul Nursalim's Gadjah Tunggal Group. Both Salim and Nursalim are wealthy businessmen who had close ties to the Suharto regime. An Embassy contact described the cases as extremely complex. Moreover, the trail may be cold in many of these cases and records hard to find. ¶7. (C) AGO BACK ON THE MAP: After several years of being outshined by the independent Anti-Corruption Commission (KPK),Supandji's efforts are putting the AGO back on the map of the GOI's anti-corruption effort. The flurry of activity during his first three months has silenced, at least temporarily, what was a growing chorus of voices that characterized SBY's anti-corruption campaign as half-hearted. Skeptics point out, however, that filing cases against the rich and powerful is easier than winning them and wonder whether Supandji can deliver. A victory against Suharto--who has weathered many cases brought against him since he fell from power in 1998-- or one of his cronies would give a significant boost to the anti-corruption effort. HUME