Identifier
Created
Classification
Origin
08JAKARTA739
2008-04-11 07:11:00
CONFIDENTIAL
Embassy Jakarta
Cable title:  

HIGH-PROFILE ARRESTS IN LATEST CORRUPTION SCANDALS

Tags:  PGOV KJUS KCOR ID 
pdf how-to read a cable
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OO RUEHCHI RUEHCN RUEHDT RUEHHM
DE RUEHJA #0739/01 1020711
ZNY CCCCC ZZH
O 110711Z APR 08
FM AMEMBASSY JAKARTA
TO RUEHC/SECSTATE WASHDC IMMEDIATE 8674
INFO RUEHZS/ASSOCIATION OF SOUTHEAST ASIAN NATIONS PRIORITY
RUEHBY/AMEMBASSY CANBERRA 2322
RUEHKA/AMEMBASSY DHAKA 0911
RUEHNE/AMEMBASSY NEW DELHI 1750
RUEHKO/AMEMBASSY TOKYO 1809
RUEHWL/AMEMBASSY WELLINGTON 2534
RUEHHK/AMCONSUL HONG KONG 2588
RUEHBAD/AMCONSUL PERTH 0700
RUEAWJA/DEPT OF JUSTICE WASHDC
RHEHNSC/NSC WASHDC
RUEATRS/DEPT OF TREASURY WASHDC
RUEAIIA/CIA WASHDC
C O N F I D E N T I A L SECTION 01 OF 02 JAKARTA 000739 

SIPDIS

AIDAC
SIPDIS

DEPT FOR EAP, EAP/MTS, EAP/MLS, EB, INL FOR BOULDIN/BUHLER
DEPT FOR EEB/IFD/OMA
DOJ/OPDAT FOR LEHMANN/ALEXANDRE
NSC FOR E.PHU

E.O. 12958: DECL: 04/11/2018
TAGS: PGOV KJUS KCOR ID
SUBJECT: HIGH-PROFILE ARRESTS IN LATEST CORRUPTION SCANDALS

REF: A. JAKARTA 720

B. JAKARTA 595

C. JAKARTA 357

D. JAKARTA 208

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

C O N F I D E N T I A L SECTION 01 OF 02 JAKARTA 000739

SIPDIS

AIDAC
SIPDIS

DEPT FOR EAP, EAP/MTS, EAP/MLS, EB, INL FOR BOULDIN/BUHLER
DEPT FOR EEB/IFD/OMA
DOJ/OPDAT FOR LEHMANN/ALEXANDRE
NSC FOR E.PHU

E.O. 12958: DECL: 04/11/2018
TAGS: PGOV KJUS KCOR ID
SUBJECT: HIGH-PROFILE ARRESTS IN LATEST CORRUPTION SCANDALS

REF: A. JAKARTA 720

B. JAKARTA 595

C. JAKARTA 357

D. JAKARTA 208

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


1. (C) SUMMARY: Anti-corruption investigators have
arrested two sitting members of the national legislature
(DPR). One M.P. was caught red-handed after receiving what
investigators say was a bribe related to a land zoning deal.
The arrest followed the apprehension in March of another M.P.
on charges of corruption in the purchase of fire trucks.
Separately, a Jakarta court sentenced the former head of the
State Logistics Agency to ten years in prison. New
allegations continue to surface related to Bank Indonesia.
The recent arrests indicate that the GOI may be getting more
serious about confronting the seemingly endemic corruption
involving legislators. END SUMMARY.

LAWMAKERS IN HOT WATER


2. (U) In a sign of increasing assertiveness, the
Corruption Eradication Commission (KPK) has arrested two
Indonesian lawmakers in the past three weeks. The latest
case involved a dramatic 2:00 a.m. raid on the Ritz Carlton
Hotel's premises in Jakarta which netted Al Amin Nasution and
four other suspects. Nasution--a member of Parliament (DPR)
from the United Development Party (PPP)--was arrested in his
car, which was also found to contain IR 71 million (about USD
$8000) in cash.


3. (U) According to the KPK, the money had been given to
Nasution by another suspect, Azirwan, a provincial official
from Riau Province in Sumatra. Earlier that day, Nasution
had participated in a hearing in which legislators discussed
a proposal to convert 200 hectares of Riau's national forest
into an office complex. A KPK spokesman told reporters that
the payment was part of a larger USD $300,000 bribe that was
intended to secure DPR approval of the proposal.


4. (U) The arrest comes just three weeks after the KPK's
arrest of another DPR member. Saleh Djasit of the Golkar
Party is accused of marking up the cost of 20 fire trucks in

his previous position as Governor of Riau. The KPK has also
questioned Hari Sabarno, a former Minister of Internal
Affairs under then president Megawati, in the case.
According to media reports, the Ministry issued a regulation
in 2004 which enabled a single company to monopolize the
provision of fire trucks to Indonesia's provincial
governments. The cost of the trucks was then marked up,
causing losses to the state in the millions of dollars (ref
D).

IMPORTER KICKBACKS: A FAMILY AFFAIR


5. (U) In other corruption-related news, the South Jakarta
District Court sentenced to ten years the former head of the
State Logistics Agency (Bulog - a state-owned enterprise
which runs the GOI's subsidized rice program). Widjanarko
Puspoyo was found guilty of having received a USD $1.6
million dollar kickback from a Singaporean rice broker. He
was acquitted of a separate charge involving beef imports.
Puspoyo's younger brother--whose company helped facilitate
the illegal payment --also received a four-year prison term
for tax evasion.

NEW ALLEGATIONS AT BANK INDONESIA


6. (U) Allegations continue to swirl around Bank Indonesia
(BI),whose outgoing Governor, Burhanuddin Abdullah, was
recently taken into custody by the KPK. (Note: The DPR
recently named Boediono, currently Coordinating Minister for
the Economy, to replace Burhanuddin as BI chief - ref A.)
Burhanuddin and two other suspects are being held in a case

JAKARTA 00000739 002 OF 002


alleging that bank funds were illegally paid out to DPR
members working on BI legislation in 2003. The KPK had
promised to name additional suspects by late March, but no
announcement has been made. Burhanuddin complained publicly
that other BI officials linked to the scandal had not been
arrested and implied that the KPK was being selective in its
targets.


7. (U) Meanwhile, a new report submitted to the KPK alleges
that BI made additional payments to lawmakers in 2006. The
report includes a list of alleged recipients which spans
nearly all of Indonesia's major parties, including Golkar,
PDI-P, PKB and PKS. The KPK has yet to announce whether it
will open a formal investigation into the case. However, the
head of the DPR's ethics board said it would investigate the
allegations.

A CASE STUCK IN NEUTRAL


8. (U) Controversy continues to surround the decision by the
Attorney General's Office to close the investigation into the
Bank Indonesia Liquidity Assistance (BLBI) program (ref C).
On April 3, an anti-corruption NGO filed a lawsuit demanding
that the investigation be reopened in the wake of the arrest
of one of the AGO's lead prosecutors (ref B).


9. (U) Parenthetically, Indonesia's leading weekly magazine
reported that Presidential legal advisor Adnan Buyung
Nasution and former Attorney General Abdul Rahman Saleh had
met with the nephew of Sjamsul Nursalim--a leading BLBI
suspect currently residing in Singapore--on a recent trip
there. The trip became public knowledge after the two men
were detained and questioned by Singaporean immigration
authorities for two hours before being allowed to enter the
country. The purpose of the visit remains unclear.

TAKING ON BIGGER FISH


10. (C) The DPR has been described in a recent survey as
Indonesia's most corrupt institution--and it certainly has
that reputation. The newfound aggressiveness of the KPK
vis-a-vis alleged legislative corruption is thus a positive
development and perhaps indicates that the KPK has grown
weary of its reputation as a body that only focuses on the
"small fish." The action also raises hopes that the KPK will
eventually get to the bottom of the BI case as well.


11. (C) Publicly, the political parties involved have
indicated support for the various investigations but may be
less cooperative behind the scenes. In a revealing comment,
one lawmaker expressed skepticism that Nasution had been
bribed because, he asserted (apparently seriously),it was
"impossible anyone would offer a lawmaker an amount of money
that small." The KPK will likely face increasing political
pressure as it delves deeper into the nefarious activities of
legislators.

HUME