CORRUPTION UPDATE -- DIPLOMATS, FORMER MINISTERS,

C O N F I D E N T I A L SECTION 01 OF 02 JAKARTA 003173

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E.O. 12958: DECL: 11/15/2017
TAGS: PGOV KJUS KCOR KMCA ID
SUBJECT: CORRUPTION UPDATE -- DIPLOMATS, FORMER MINISTERS,
AND JUDGES UNDER A CLOUD

REF: A. JAKARTA 3131

B. JAKARTA 2974

C. JAKARTA 2953

D. JAKARTA 2229

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Classified By: Pol/C Joseph Legend Novak, reasons 1.4(b)(d).


1. (U) This message was coordinated with Consulate Medan.


2. (SBU) SUMMARY: November's corruption highlights include:
a credible media report alleges corruption at the Foreign
Ministry; a former minister has been named a suspect in a
corruption case involving the sale of two crude oil tankers;
legal action against Tommy Suharto--the notorious son of the
former president--continues; and allegations of judicial
misconduct continue to swirl around the acquittal of a
Sumatra illegal logging kingpin. Additionally, the GOI--in a
bid to curb corruption and other abuses--is seeking to
mandate "good governance" across the country. END SUMMARY.

DIPLOMATS ON THE TAKE?


3. (SBU) The Foreign Ministry (DEPLU) is taking some heat on
the corruption front. Tempo magazine, Indonesia's leading
news weekly, alleged this week that five officials from
DEPLU, including current Indonesia Ambassador to the U.S.
Sudjadnan Parnohadiningrat, skimmed money off a contract to
renovate the Indonesian government's embassy in Singapore in

2004. According to the report, the treasurer at the embassy
at that time confessed to giving large payouts to several
DEPLU officials, including (allegedly) a cash payment of USD
$200,000 to Parnohadiningrat, then a high-ranking
Jakarta-based DEPLU official. The magazine also reported
that the incident was investigated by the now-disbanded
Inter-agency Corruption Eradication Team (ICET) but that the
dossier had "disappeared" at the Attorney General's Office.
Attorney General Hendarman Supandji, who before being
appointed AG was head of ICET, has yet to comment publicly on
the accusations.


4. (C) The Foreign Ministry has been the subject of
corruption charges before. In 2006, a former consul general
to Malaysia was convicted of charging excess fees to
Malaysian visa applicants. Allegations of misconduct also
surrounded the proposed renovation of the Indonesian embassy
in Seoul. In a November 15 discussion, Theo Sambuaga, the
head of the national legislature's committee for foreign
relations, told Pol/C that he and fellow legislators were
"very worried" by the allegations and planned public hearings
to discuss the matter.

THE FORMER MINISTER AND THE TANKERS


5. (SBU) Another former top-level official is trying to fend
off corruption charges. The Attorney General's Office (AGO)
has declared former Minister of State-owned Enterprises
Laksamana Sukardi a suspect in a corruption case involving
the sale of two crude oil tankers in 2004. According to the
AGO, state-owned oil giant Pertamina did not follow proper
procedures regarding the tenders, resulting in the tankers
being sold below market-rate and causing a loss to the state
of up to USD $100 million.


6. (SBU) The case has already been through several prior
iterations: a Business Competition Supervisory Committee
report agreed that there was a conspiracy to rig the sale,
while the Corruption Eradication Commission (KPK)
concluded--contrary to the AGO--that the sale did not result
in losses to the state. (Note: Proving "losses to the
state" is an essential element if the AGO intends to indict
and convict on corruption charges.) Laksamana has mounted a
vigorous public defense of his role, suggesting that the AGO
also question former President Megawati for whom he served,
who he says approved the sale. Laksamana also led a public

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demonstration outside the AG's office recently.

TOMMY BACK IN COURT


7. (SBU) In the latest legal action against Tommy Suharto,
the notorious son of the former president, the AGO has
launched a civil suit in an attempt to recover approximately
USD $50 million Tommy scammed off the government in a land
deal. Tommy was tried and convicted of corruption in the
case back in 2000, but the conviction was later overturned by
the Supreme Court. (Note: Tommy ordered the murder of the
judge who originally convicted him on the corruption charge,
a crime for which he was sentenced to 10 years in prison. He
was released after serving less than five years.)


8. (C) Regarding the present case, it isn't clear whether the
AGO really thinks it can win a judgment against Tommy, or if
it is simply applying pressure in hopes of collecting some
USD $50 million of Tommy's assets currently frozen in a bank
in the UK (ref D). Tommy has announced his intention to
file a counter-suit. In a recent meeting, Sidney Jones--head
of the International Crisis Group here and a leading Amcit
observer of Indonesia--told Pol/C that she doubted that the
AGO's case would pick up much traction because of the Suharto
family's continuing influence in so many sectors of society.
That said, she noted that Tommy Suharto was considered "a
disgrace" by many Indonesians.

JUDICIAL MISCONDUCT SUMATRAN-STYLE?


9. (SBU) Controversy continues to surround the recent
acquittal of notorious illegal logging kingpin Adelin Lis on
charges of illegal logging and corruption (ref A). Lis went
into hiding immediately upon his release on November 5,
apparently to avoid re-arrest by the police on money
laundering charges. The North Sumatran High Court and the
Judicial Commission have both announced they will launch
investigations into the conduct of the judges who acquitted
Lis. In addition to allegations of misconduct against the
judges, some observers have alleged that prosecutors
deliberately left out key pieces of evidence in order to
provide grounds for an acquittal.

GOOD GOVERNANCE IS MANDATORY


10. (SBU) On the positive (if implausible) side, Indonesia's
governance woes will apparently soon be a thing of the past,
according to State Minister for Administrative Reforms Taufik
Effendi. Effendi recently told a UN-sponsored governance
forum that more than half of Indonesia's districts and
municipalities are already employing the GOI's "good
governance system" and that a new bill would require all
local entities to do so by the end of 2008. Effendi was
effusively optimistic that making "good governance" mandatory
was enough to do the trick, but he did caution that good
governance is unlikely to succeed if local administrations do
not put into place "transparent and accountable systems."

HUME