CORRUPTION UPDATE -- SOLDIERS, LEGISLATORS IN THE

C O N F I D E N T I A L SECTION 01 OF 02 JAKARTA 003378

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E.O. 12958: DECL: 12/12/2017
TAGS: PGOV KJUS KCOR ID
SUBJECT: CORRUPTION UPDATE -- SOLDIERS, LEGISLATORS IN THE
SPOTLIGHT

REF: A. JAKARTA 3349


B. JAKARTA 3326

C. JAKARTA 3173

D. JAKARTA 3131

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


1. (SBU) SUMMARY: In December's corruption highlights: 15
soldiers have been convicted of involvement in illegal
logging; parliament is investigating bribery allegations
involving several members; more allegations of corruption
have been levied against Tommy Suharto; and, controversy
continues to swirl around the acquittal of an illegal logging
kingpin. Bio notes on the new head of the Corruption
Eradication Commission are included in Para 9. END SUMMARY.

SOLDIERS HELD ACCOUNTABLE


2. (SBU) A military court has found 15 soldiers guilty of
involvement in illegal logging in East Kalimantan. The
commander of the group was dishonorably discharged and
sentenced to 16 months in prison, while his subordinates were
sentenced to 12 months each. In February, the soldiers had
apprehended a group of 30 illegal loggers near their base.
However, they had then released the men and their equipment
after a meeting with the loggers' Malaysian boss without
reporting the illegal loggers to the police. Reports have
speculated that the soldiers most likely took a payoff in
exchange for illegally releasing the loggers.

LEGISLATORS IN TROUBLE?


3. (C) Parliament's Ethics Board said there are indications
that several of its members may have received bribes related
to a corruption investigation centering on Bank Indonesia
(BI). Supreme Audit Board (BPK) chair Anwar Nasution earlier
sent a report to the Corruption Eradication Commission (KPK)
alleging that BI officials had made illegal payments to
parliamentarians and others in 2003. According to the
report, bribes worth over USD 10 million were paid to win
passage of legislation favorable to BI in Parliament and to
defend BI officials from corruption allegations related to
the Bank Indonesia Liquidity Assistance scandal (ref B).
Several members of parliament have told Pol/C that this case
is worrisome to legislative leaders who are concerned with
Parliament's reputation with the public (it is already seen
as a den of money politics).


4. (U) In a separate case, the KPK has named former
legislator Noor Adenan Razak a suspect in a bribery case
involving the Nuclear Energy Regulatory Agency (BAPATEN).
Razak reportedly confessed to investigators that he had
received a bribe worth approximately USD 150,000 from the
agency in exchange for his support of its legislative agenda.

MORE SUHARTO ALLEGATIONS


5. (SBU) Yet another corruption allegation has surfaced
against Tommy Suharto, notorious son of the former president
(and who is already subject of a variety of legal
actions--ref C). This time the Ministry of Finance accused
Tommy of illegally engineering a deal whereby he was able to
buy back--for a fraction of their value--assets which had
been seized by the state. The assets in question were
surrendered by Tommy's Humpuss Group to pay off a USD 500
million debt to the government incurred in the wake of the
1998 financial crisis. The assets were then resold by the
Indonesia Bank Restructuring Agency (IBRA) to a private
company at a price that was 88 percent below their market
value. The private company, it turns out, bought the assets
with funds provided by Humpuss, in violation of the sales
agreement signed with IBRA. Both the KPK and the Attorney
General's office are investigating.

JAKARTA 00003378 002 OF 002




6. (SBU) Businessman and Suharto associate Tommy Winata has
also become the subject of new corruption charges, this time
regarding the construction of a resort and casino complex in
the Riau Islands. Police investigators questioned Winata
about the case last week, which they claim may have cost the
state as much as USD 400 million. No stranger to
controversy, Winata has strong business ties to the Suharto
family.

ALLEGED JUDICIAL MISCONDUCT


7. (SBU) The acquittal of illegal logging kingpin Adelin Lis
(refs C and D) continues to raise questions about the
integrity of the legal system. Last week the Judicial
Commission issued a report recommending that the five judges
in the case face suspension. According to the Commission's
report, the judges refused to hear the testimony of some 25
witnesses and dismissed other testimony without a clear legal
basis. The Commission's findings are at odds with an earlier
investigation by the Supreme Court, which concluded that
there was no evidence of wrongdoing.


8. (C) In a December 10 meeting with Pol/C, Constitutional
Court Justice Maruarar Siahaan said the Lis case was
"unfortunate and possibly involved judicial malfeasance." He
underscored that the matter should "not tar the whole
judiciary."

NEW KPK CHIEF


9. (C) Bio notes on the new Chief of the Corruption
Eradication Commission (ref A) follow:

Antasari Azhar is a career prosecutor who since 2006 has held
the key position of Chief of Prosecutions for General Crimes.
Prior to that, he was head of District Prosecutor's Offices
in Jakarta, West Sumatra and Southeast Sulawesi and served
briefly as AGO spokesman. His selection as head of the KPK
has been controversial in large part because of allegations
that he deliberately mishandled certain high-profile cases
under his authority. For example, Tommy Suharto was under
Azhar's control as head of the South Jakarta office when he
escaped from jail in 2001. In 2003, Azhar delayed the
imprisonment of members of the local legislature who were
convicted on corruption charges. Azhar was born in Bangka
Belitung (an island off Sumatra) in 1953. He studied law at
Sriwijaya University in Palembang and earned a Masters degree
at STHI-IBLAM.

HUME