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Scandals that rocked the nation in 2009 won't go away next year

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Jakarta Globe - December 30, 2009

Emmy Fitri, Nivell Rayda & Heru Andriyanto – President Susilo Bambang Yudhoyono's landslide win in July made him far and away the most potent politician of the post-Suharto era and the first Indonesian leader to be elected – and reelected – as president by direct vote.

His coalition in the legislature should be unassailable, with his Democratic Party holding 148 of the 560 seats in the House of Representatives. His coalition partners – basically everyone except the opposition Indonesian Democratic Party of Struggle – have the lion's share of the remaining seats. He has seen the country weather the global economic meltdown and presided over a rise in international prestige and influence that have led investors and analysts to talk of Indonesia finally emerging as the next country to join the BRIC bloc of Brazil, Russia, India and China.

But none of that means he is safe from the eternal plague of Indonesian politics – scandal. Yudhoyono has long stood on a platform of fighting corruption and he earned points this year by not standing in the way of the prosecution and conviction by the Corruption Eradication Commission (KPK) of Aulia Pohan, his son's father-in-law. Aulia is serving a four and a half year term on charges stemming from the misuse of Bank Indonesia funds when he was a central bank deputy governor.

And yet while the new administration should be reveling in an agenda-setting first 100 days, the president has been forced to walk a political tightrope as a number of high-profile scandals, allegations, rumors and maneuvers related to corruption have grabbed the headlines.

Public discussion has been dominated by talk of plots against the KPK, the PT Bank Century bailout and dark mutterings of a cabal of the president's political enemies seemingly intent on manipulating corruption allegations to weaken or even bring down the government. In this volatile environment, even the mighty coalition began to look shaky due to the highly politicized House investigation into the Century case.

The scandals have yet to run their course, the role of competing law enforcement agencies – the police and attorney general on one side, the KPK on the other – has yet to be sorted out and the president's recent promise to eradicate the "judicial mafia" polluting Indonesia's courts remains a tall order.

It appears that 2010 will bring more of the same and it will take all of the administration's political skill and resourcefulness to emerge form the turmoil in good shape. Below are the scandals that rocked our world in 2009:

Gecko vs Crocodile

The spat between the National Police and the Corruption Eradication Commission filled the front pages of every major newspaper in 2009 and became a better soap opera than any screenwriter could have crafted. The saga paints a compelling picture of how seemingly corrupt officials are finally fighting back against the powerful KPK. The debacle also confirmed the existence of so called case brokers, the judicial mafia that has long been active in the underbelly of Indonesia's judicial system.

Analysts and antigraft activists suspected that the root cause of the scandal was the commission's wiretapping of the former National Police chief of detectives, Comr. Gen. Susno Duadji, who was being investigated over a major bribery scandal related to the Bank Century bailout. The wiretapping occurred in April and Susno later responded with words that would come back to haunt him: "How could a gecko [KPK] expect to defeat a crocodile [police]?" The battle was joined and the gecko side reveled in the role of the underdog.

At the same time, Anggodo Widjojo aired claims that his brother, Anggoro Widjojo, a graft fugitive supposedly living in Singapore, had bribed several executives of the KPK. The former chairman of the commission, Antasari Azhar, who is on trial for murder, also told police while he was in custody about bribery in the KPK, something he later denied. The claims were never proven, but on Sept. 15, the National Police named two KPK deputy chairmen, Bibit Samad Rianto and Chandra M Hamzah, as suspects for abuse of power. They were arrested and suspended.

Then things got really interesting. In a matter of weeks, the National Police twice changed the charges from abuse of power and accepting bribes to abuse of power and extortion. This flip-flopping caused speculation that the case against the two antigraft crusaders was fabricated.

The public sided clearly and loudly with the KPK. From street rallies to online chat rooms and Facebook pages, Bibit and Chandra became heroes and Susno a representative of the Dark Side in a story line that put increasing pressure on Yudhoyono to do something. Finally, when the Constitutional Court ordered the KPK to publicly air wiretapped telephone conversations between Anggodo and several law enforcers, the resulting broadcast seemed to bring much of the country to a halt. It all seemed to point to the police, Anggodo and case brokers being enmeshed in a conspiracy to bring down the KPK.

Public pressure prompted Yudhoyono to establish an independent fact finding body, dubbed the Team of Eight, to sort things out.

The group, led by noted lawyer Adnan Buyung Nasution, concluded that the police decision to charge the KPK officials was unfounded and that several officers, particularly Susno, had a hidden agenda to torpedo the commissioners.

The president finally told the police and the AGO to resolve the case, while being careful not to directly "interfere" in the sanctity of the judicial process. Bibit and Chandra were cleared of all charges early this month and Susno lost his position.

The fate of Anggodo and the alleged accomplices who were believed to be setting up deals and handing out money remains unknown. It is all "under investigation."

Scandal of a Century

By the end of the year, the KPK-police drama seemed like a mere appetizer compared to the main course, the increasingly confusing political fallout from the government's November 2008 bailout of Bank Century. The failure and rescue of the mid-sized bank in the midst of the global economic crisis has become a major test for Yudhoyono, with political opponents alleging that some of the bailout money went to his political party.

The House investigating committee that started work this month seems to have set its sights on taking down Finance Minister Sri Mulyani Indrawati and possibly Vice President Boediono for approving the bailout. The issue is consuming the early days of the president's second term.

Bank Century was taken over by the state Deposit Insurance Corporation (LPS), which injected Rp 6.7 trillion ($710 million) into the bank in four stages from November 2008 to July 2009. It was the nation's first bank bailout since the 1997-98 Asian financial crisis. At issue is why the bank was saved and who benefitted.

The government's Committee for Financial Sector Stability (KSSK) ruled on Nov. 21, 2008, that Century had collapsed and the bank should be taken over because of fears that it could degenerate into a "systemic disturbance" putting the country's financial system at risk.

It was later found that the bailout did not have the full approval of the House and had been decided without the consent of some key officials, including then Vice President Jusuf Kalla. Another issue: did the president know of and approve the bailout or did the buck stop with Sri Mulyani and then-central bank Governor Boediono?

An angry Kalla urged the police to arrest Century owner Robert Tantular, which they did. He is now in prison on fraud charges related to the collapse of the bank. Three other Bank Century executives are also in jail under the same indictment. Two other owners, Hesham al Warraq and Rafat Ali Rizvi, fled the country after the bailout.

Amid mounting public criticism, the Attorney General's Office later charged Hesham and Rafat with corruption and pledged to try them in absentia.

KSSK head Raden Pardede, Sri Mulyani and Boediono drew fire for an alleged lack of transparency in agreeing to the bailout. The initial cost to rescue Century was set at Rp 632 billion on Nov. 21, 2008. It soared, apparently because of miscalculations related to the bank's liabilities and equities. The bank's biggest depositor was Boedi Sampoerna, a supporter of the president and one of the country's richest men. His presence has also become an issue.

Sri Mulyani, a target of the House investigation, decided to fight back by defending herself in print, telling the Wall Street Journal that Golkar Party chairman Aburizal Bakrie was using the case to remove her from the cabinet. That declaration brought the matter firmly into the political arena as the House probe in particular began to seem more like part of a political campaign than a proceeding intended to ferret out the truth.

So far, both Boediono and Sri Mulyani have rejected calls to step down during the House investigation. Yudhoyono has stood by his aides, saying there in no need for them to step aside.

Last month, activists from a fringe pressure group, the People's Democratic Front (Bendera), aired allegations that aides to the president had accepted part of the bailout money. Everyone named denied the allegation and fought back by filing complaints with the police for libel.

Speaking before the House special committee on Dec. 22, Boediono argued that the decision to rescue Century had been prompted by worries that at a time of global financial crisis, the collapse of even a small bank could derail the entire financial system of the country. He also said the situation at the time was more or less similar to that of a decade earlier. Boediono has been consistent in his version of events but has also said that if any malfeasance occurred with the funds after they were transferred, that matter needs to be investigated. Sri Mulyani will be called before the House in January.

Cikeas Tentacles

Now, from out of left field, comes the book "Membongkar Gurita Cikeas: Di Balik Skandal Bank Century" (Unravelling the Cikeas Octopus: Behind the Bank Century Scandal), written by sociologist and activist George Junus Aditjondro. When it was published in late December it created an enormous stir when bookstores pulled it from their shelves, saying they needed to check the information in the book to see if it was... true? Dangerous? Too politically sensitive? There were rumors that the book might be banned and reports the author might be sued for libel.

George, who also wrote a book years ago on the wealth of the Suharto family, accuses the ruling Democratic Party of using non-profit foundations associated with Yudhoyono to transfer funds to the president's campaign coffers during the 2009 electoral season. The book also claims that the state funds used to bail out Bank Century were diverted to one of the foundations.

Meanwhile, the publicity alone generated fevered interest in the book. Scarce copies sold for as much as 25 times the cover price of Rp 36,000 and pirated versions began appearing on the street.

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