U/S JEFFERY BRIEFED ON ANTI-CORRUPTION REFORM SUCCESSES,

UNCLAS SECTION 01 OF 02 JAKARTA 002610

SIPDIS

STATE FOR U/S JEFFERY
STATE FOR A/S HILL, EAP/MTS, EB/IFD, INL/C, INL BOULDIN
DOJ FOR AAG BRUCE SWARTZ, OPDAT FOR LEHMANN/ALEXANDRE
MCC FOR AMBASSADOR DANILOVICH AND MORFORD
DEPT PASS USTR
TREASURY FOR IA - BAUKOL
USAID FOR ANE/AA WARD

SENSITIVE
SIPDIS

AIDAC

E.O. 12958: N/A
TAGS: PGOV KMCA KCOR ECON KJUS ID
SUBJECT: U/S JEFFERY BRIEFED ON ANTI-CORRUPTION REFORM SUCCESSES,
WAY FORWARD

REF A) JAKARTA 13603 (CC decision); B) JAKARTA 1391 (Indonesia
debates reform of ACC)

JAKARTA 00002610 001.2 OF 002



1. (SBU) SUMMARY: Indonesia's Corruption Eradication Commission
(KPK) leaders told visiting Under Secretary for Economic, Energy,
and Agricultural Affairs Reuben Jeffery III September 10 that they
have "caught some big fish" (e.g. former governors),but
anti-corruption reform will take decades. They also stressed that
institutional reform throughout the judicial sector is a top
priority. U/S Jeffery expressed strong support for the KPK and
anti-corruption reform in Indonesia, noting the significant progress
the KPK has made in its four-year tenure. With MCC Threshold
support, the KPK is developing its institutional foundation and
setting a strategic direction for anti-corruption reform in
Indonesia. End Summary.

KPK Making Progress and "Catching Big Fish"
--------------


2. (U) KPK Commissioners Erry Riyana and Amien Sunaryadi briefed U/S
Jeffery on the KPK's tasks, authorities, organizational structure,
challenges, needs, and strategic plan. The KPK, an independent
institution, leads anti-corruption reform in Indonesia. Riyana said
that the KPK selects cases to prosecute based on three criteria:
cases involving law enforcement and state officials; cases
generating significant public concern; and cases with losses to the
state over 1 billion Rupiah ($106,000). Addressing critics'
accusation of the KPK being selective in its investigations, Riyana
said that the KPK does not have that "luxury," although he did note
that some cases take longer to investigate based on the complexity
of the case and the ease of obtaining evidence. Riyana stated that
the KPK has "caught some big fish," including two former governors,
a minister, and Supreme Court officials.

Mandate - Resource Gap Still Wide, but Decreasing
-------------- --------------


3. (SBU) U/S Jeffery noted the disparity between the KPK's broad
mandate (coordinate, supervise, investigate, prosecute, prevent, and
monitor) and its limited resources and staff. The KPK currently has
400 staff with plans to augment that number to 600 by 2008. The KPK
has 91 pre-investigators, 58 investigators, and 20 prosecutors.
Erry Riyana and Syamsa Ardisasmita (KPK Secretary General) have
previously told us that the KPK will prioritize personnel additions
in these three areas where capacity is currently limited. Through
June 2007, the KPK is pre-investigating 54 cases, investigating 21,
and prosecuting 16, recovering an estimated 50 billion Rupiah ($5.75
million).


4. (U) Commissioner Riyana praised cooperation between the KPK and
its anti-corruption partners in the Attorney General's Office (AGO)
and Indonesian National Police (INP). Riyana stated that the KPK,
AGO, and INP coordinate case loads, implicitly acknowledging the
limited capacity within the KPK. The KPK is designated to
investigate and prosecute higher profile cases whereas the AGO
handles lower profile cases and those cases outside of Jakarta. The
KPK's mandate permits it to investigate and prosecute cases from
1999 onwards, whereas the AGO has no restrictions based on the time
period of the case. At present, the KPK prosecutes its cases in the
Anti-Corruption Court and the AGO tries its cases in the district
courts. However, a December 2006 Constitutional Court decision
mandates changes to this arrangement in order to provide more legal
certainty to those being prosecuted (see reftels).


Judicial Reform as a Top KPK Priority
--------------


5. (U) Commissioner Riyana highlighted judicial reform as a top
priority in the broader anti-corruption reform agenda, starting with
the Supreme Court. Commissioner Sunaryadi highlighted the KPK's

JAKARTA 00002610 002.2 OF 002


focus on corruption prevention, stating that prevention is the key
to ending cycles of corruption. Riyana focused on institutions and
processes, noting human resource, financial, information technology,
and asset management systems as the keys to reducing corruption in
the judicial sector. Beyond raising salaries, Riyana highlighted
institutional reforms regarding recruitment, physical
infrastructure, and benefits.

KPK Identifying Needs and Seeking Solutions
--------------


6. (U) Riyana noted the KPK's three strategic priorities: improving
legal certainty, improving the investment climate, and increasing
state income. Riyana also highlighted the current "needs" of the
KPK, including: developing investigation methods, developing human
resources systems, sharing information for investigations, and
educating the public on anti-corruption reform. Regarding
impediments to prosecuting anti-corruption cases, witness protection
is guaranteed under Indonesian law. However, there is no provision
for plea bargains.


7. (U) Within the $55 Million MCC Threshold Program for Indonesia,
$35 million is designated for anti-corruption. Approximately $11
million of this funding is in support of the KPK's efforts to
enhance its capability to investigate and prosecute corrupt
high-level government officials. As a broader comment on donor
assistance, Riyana argued that there is too much focus on case
management and training assistance. He believes that donor
assistance should target management systems, which will establish a
stronger institutional framework for key judicial actors. Although
the pace of reform is at times slow, the Commissioners believe that
President Yudhoyono is "more than 100 percent" committed to
anti-corruption reform.


8. (U) U/S Jeffery cleared on this cable.

HUME