ATTORNEY GENERAL UNDER FIRE AFTER ARREST OF TOP PROSECUTOR

C O N F I D E N T I A L SECTION 01 OF 02 JAKARTA 000460

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E.O. 12958: DECL: 03/06/2018
TAGS: PGOV KJUS KCOR ID
SUBJECT: ATTORNEY GENERAL UNDER FIRE AFTER ARREST OF TOP PROSECUTOR

REF: A. JAKARTA 357


B. 07 JAKARTA 3349

C. 07 JAKARTA 3320

D. 07 JAKARTA 2229

JAKARTA 00000460 001.2 OF 002

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


1. (C) SUMMARY The Attorney General's Office (AGO) has
come uner intense public scrutiny after the arrest of a tp
anti-corruption prosecutor. The prosecutor wa in possession
of USD $6"00,000 when he was arresed by Corruption
Eradication Commission (KPK) inestigators. The arrest came
just after the AGO anounced the suspension of a high profile
corrupton investigation (lled by the arrested prosecutor) due
to lack of evidence. The arrest is a major success for the
KPK, but represents a blow to the efforts of the Attorney
General to make his office into a credible anti-corruption
force. END SUMMARY.

PROSECUTOR CAUGHT RED-HANDED


2. (U) In a highly publicized move, Corruption Eradication
Commission (KPK) investigators arrested one of the Attorney
General's Office's (AGO) leading corruption prosecutors on
March 2. Prosecutor Urip Tri Gunawan was in possession of
USD $600,000 at the time of his arrest on suspicion of taking
a bribe. On March 3, KPK investigators searched Gunawan's
office for additional evidence. A second suspect--whom
investigators believe delivered the bribe--was also arrested.


3. (SBU) Gunawan was the lead prosecutor in the
investigation of Bank Dagang Negara Indonesia (BDNI),one of
three banks under scrutiny in a complex financial case
surrounding the Bank Indonesia Liquidity Assistance (BLBI)
program (ref A). The BLBI investigation team was set up by
AG Supandji soon after he took up his post in May 2007 and
was the centerpiece of his anti-corruption agenda (refs C-D).
Just two days prior to Gunawan's arrest, the AGO announced
that it was suspending the investigation into BDNI and a
second bank, BCA, due to lack of evidence. (Note: BDNI was
liquidated after the financial crisis in 1998, while BCA is
one of Indonesia's top five commercial banks.) The KPK is
looking into whether the bribe allegedly paid to Gunawan is
related to the decision to suspend the investigations.

AGO UNDER FIRE


4. (SBU) The arrest has added fuel to a growing firestorm of
criticism which began several months ago around the GOI's
handling of the BLBI case (ref A). AG Supandji was visibly
shaken over the arrest and has pledged to support the KPK's
investigation. Appearing before the Indonesian legislature's
(DPR) Law Commission on March 5, Supandji said he accepted
that corruption and abuse of power were likely to have been
involved in the decision to suspend the BLBI investigations,
and directed a Deputy AG to open an internal investigation.


5. (SBU) Prominent members of the Commission, urged him to
go further by immediately suspending the Deputy AG for
Special Crimes, Kemas Yahya Rahman, and Gunawan's immediate
supervisor, Muhammad Salim, both of whom have been called in
for questioning by the KPK. Many observers are also calling
for the KPK to take over the BLBI investigation.

KPK UP, AGO CIRCLING THE WAGONS


6. (C) The arrest is a major success for the KPK and its new
chief, Antasari Azhar. A former AGO prosecutor himself,
Azhar's appointment was heavily criticized by NGOs who
questioned his commitment to the anti-corruption effort and
his willingness to take on his former law enforcement

JAKARTA 00000460 002.2 OF 002


colleagues (ref B). An Embassy contact told us that Azhar
was not close to AG Supandji or Gunawan, but was part of what
he described as a different "faction" at the AGO. Whatever
the reasons are, the KPK has moved quickly on this case and
is looking professional in doing so.


7. (C) For the Attorney General, however, who had made
anti-corruption efforts--and the BLBI scandal in
particular--his top priority, the arrest of Gunawan is a
serious blow. The credibility of the AGO as an
anti-corruption fighter has been tarnished, and it seems
likely that other heads will roll. While the AG appears to
be taking the right steps (and is not accused of any corrupt
activities himself),prosecutors are circling the wagons; on
March 5 many BLBI prosecutors started switching off their
cell phones, reportedly out of fear that their calls were
being monitored by the KPK.


8. (C) More broadly, the GOI's political opponents in the
DPR and elsewhere are sure to use the developing situation to
criticize the President's anti-corruption campaign as
ineffective. With the legal process only just beginning, the
scandal will likely generate headlines in the days and weeks
to come.

HUME