Geckos versus Crocodiles
As Indonesia began its era of direct elections at central and regional levels, it soon became apparent that funding democracy would be an expensive exercise. Soon after Yudhoyono’s installation as president, his coalition member party, Golkar, held a congress in December 2004 at which the vice president, Jusuf Kalla, wrestled the party leadership from the incumbent, Akbar Tanjung. Though a veteran from the Suharto era, Tanjung was widely respected as someone who had adjusted happily enough to the new era. But he was hopelessly outgunned by the money Kalla threw at the party election.
The vote was taken from the 484 provincial and district delegations, each with equal weight. Kalla’s team, according to credible reporting by American embassy officials on the scene, offered each district delegate Rp 200 million (then about $22,000) and each provincial board Rp 500 million or more. There was a cash down payment, with the balance to be delivered after the vote for Kalla came in. The DPR speaker, Agung Laksono, had Rp 50 billion ($5.5 million) to spend, and the wealthy businessman-politician Aburizal Bakrie, who was the economic coordinating minister in Yudhoyono’s cabinet, splashed out Rp 70 billion ($8 million) to secure Kalla’s win.
It was a happy event. As well as collecting their cash and enjoying a good time in the capital’s top hotels at someone else’s expense, the delegates who had backed Kalla could look forward to being closely tied to the government and to receiving support for their own political careers as gubernatorial and bupati candidates. And this was just an internal party election, although admittedly it was in the party traditionally closest to the business plutocracy, which included in its top council some big tycoons, like Bakrie and the Acehnese media entrepreneur Surya Paloh, as well as smaller ones, like Kalla.
As the Yudhoyono decade progressed, it became apparent that politicians and their party machines had an almost insatiable appetite for funding. The new Komisi Pemberantasan Korupsi (KPK, Corruption Eradication Commission), which had been set up by law in 2002 and had begun operations in 2004, soon found some of its most egregious suspects among ministers and legislators. As scams and fraud were brought to light, and successful prosecutions launched in a special corruption court, public opinion surveys showed that the parliament was regarded as the most corrupt institution in the country. Positions in the DPR “commissions” (or committees) that oversaw the various ministries became ever more highly coveted. Membership meant having a say in whether an allocation for a particular program or purchase should be passed or adjusted upward, and in whether a particular contractor or supplier should be approved. The DPR member involved stood to gain kickbacks both from the ministry that proposed the budgetary allocation and from the supplier who benefited.
The new generation of democratic politicians (who, in many cases, were simply recycled authoritarian spear-carriers) found many willing partners in the bureaucracy and a flexible culture of fiscal probity. Many, if not most, civil servants did not think it unethical, if their department’s outside requirements could be supplied at a cost below the budgeted amount, to keep the difference themselves by arrangement with the contractor. From there, it was but a short step to inflating the budget estimates so that there would definitely be such a margin. This applied to everything from purchases of stationery to high-tech items, such as aircraft and power plants. Kickbacks of 10 to 15 percent were routine in government procurement, the World Bank reported, and contributed about 40 percent of official corruption. In late 2013, as Yudhoyono’s ten years in office neared their end, an even more alarming claim was made by his own former party treasurer, Muhammad Nazaruddin, a former member of the DPR budget committee who was now serving a jail term for rigging a tender. Nazaruddin alleged that an allocation of Rp 5.8 trillion ($523 million) for a new electronic identity card system included a markup of 45 percent, resulting in $500,000 bribes all round for the politicians who approved it.
Satrio Budihardjo Joedono, an economist who served as trade minister and ambassador to Paris in the last years of the Suharto government, was made head of the National Audit Agency by President Habibie in 1999, with a mission to pinpoint financial irregularities in the government apparatus. “You were surprised when anything is not corrupt,” Joedono recalls of his five years in the position. “It was very unusual if you did not find anything.” What he found was a pervasive blurring of the distinction between state property and private property, an attitude carried over from premodern political systems and intensified by the “traditional feudal system” that Suharto had built. “Activities which in a modern legal system would be corrupt, here were not,” Joedono says. All his predecessors since 1945 had signed off on these practices.
The cases rolled on. A former minister of fisheries in the Megawati government was charged over a 32 billion rupiah ($3.5 million) “off-budget” fund derived from funds siphoned out of his ministry budget, plus contributions from fishing industry figures. A former minister for religious affairs, Said Agil Hussein Al Munawar, and his former director general for Islamic guidance and hajj affairs, Taufiq Kamil, were convicted of embezzling nearly $71 million in funds earmarked for Indonesians performing the hajj. Former Investment Coordinating Board chairman Theo F. Toemion was sentenced to six years’ imprisonment for misappropriating $2.5 million from the budget for promoting foreign investment. A former election commissioner, Daan Dimara, was given four years for rigging procurement contracts in the 2004 elections.
In the middle of the 2006–7 avian influenza epidemic, which killed 159 Indonesians (out of a worldwide total of 359 deaths), the then director general of medical services at the health ministry, Ratna Dewi Umar, marked up the price of the oxygen ventilators that were urgently required to save patients. The contract went to a company owned by Bambang Rudijanto Tanoesoedibjo, brother of the media mogul and politician Hary Tanoesoedibjo. The illegal margin was estimated to have cost the state Rp 12 billion ($1.2 million). The official, who eventually got a five-year jail term, said she’d followed orders from her boss, the then health minister, who continues to be under investigation for allegedly receiving 10 percent of the markup.
Egged on by a public that was accusing it of ignoring the “big fish,” and having been granted more investigative resources, the anticorruption commission took on suspect parliamentarians. In 2008 it made a 2:00 a.m. raid on a luxury hotel, arresting, among others, a DPR member from the PPP. He was nabbed in his car while in possession of Rp 71 million ($8,000) in cash, which he had just been given by another suspect from Riau province who was involved in a plan to rezone a large swathe of national forest for development (for which the developer had allocated $300,000 to pay off politicians). One colleague in the DPR expressed skepticism about the charge because it was “impossible anyone would offer a lawmaker an amount of money that small.”
Another DPR member, from Golkar, was arrested for marking up the price of fire trucks bought while he was previously governor of Riau. Under Megawati, the home ministry had issued an instruction making a single company the only authorized distributor of fire trucks to provincial governments. A member of Yudhoyono’s PD was forced out by the DPR’s own ethics committee for trying to squeeze commissions out of the hajj program.
In August 2007 Nurdin Halid, long a controversial Golkar politician and commodity dealer, became the first sitting DPR member to be jailed (although his two-year jail term was in fact for milking $18 million from a palm-oil fund while he was running the national food-price stabilization body, Bulog, in the late 1990s). That Halid was a longtime associate of the vice president, Jusuf Kalla, made his conviction more significant, as it signaled that the anticorruption drive was showing less fear and favor. But as well as discomfiting high-level party patrons, the KPK was pushing into dangerous ground.
Indonesians generally do not trust the people who are supposed to look after their safety and punish wrongdoers: police, prosecutors, and judges. Few go to them for help. Out of the 5 million cases that go through Indonesia’s courts each year, about 4.8 million relate to traffic offenses. Almost all the rest are criminal cases. In other words, these are not cases in which citizens are actively applying for remediation via the judiciary. Trust in the legal system, say many experts, is about the same as it was under colonial rule.
During a closed-door session of the American Chamber of Commerce in 2007, an attorney who advised foreign companies in Jakarta described the local legal system as “harrowing” to a visiting senior official from Washington. “He advises clients in commercial disputes that they cannot afford the corrupt court system and will lose because they cannot play the game the Indonesian way,” noted the US embassy. “Western company executives are sometimes jailed in the case of a dispute with a local partner.”
In commercial and other civil cases, taking a dispute to the police or the courts can be an invitation to extortion. In 2013 a large foreign enterprise in Jakarta with an online payments system found that its network had been hacked and that $2 million in credits had been transferred to a domestic bank account. The company’s IT specialists and accountants identified the account and its owners. But the firm’s legal advisers, one of Jakarta’s top law partnerships, recommended against taking this evident fraud case to the police: doing so would put the company in a bidding war with the fraudsters to get a partisan performance from investigators, prosecutors, and judges. Meanwhile, police detectives would browse through the company’s books, looking for unrelated matters that could be blown up into criminal cases, thereby creating further opportunities for extortion. The company and its foreign owner decided to let the $2 million go.
Also in 2013, a foreign investor in another business, a mine that had failed to produce enough of the high-grade coal promised by its geologist, found himself called to the Jakarta police headquarters (known as Polda) for questioning over a personal guarantee for part of the mine’s financing. The lender had not even initiated civil proceedings for recovery of the loan, and the loan agreement had an arbitration clause anyway. The investor found himself immediately taken away to the police cells on suspicion of fraud, where he spent two months while his staff and family worked for his release. When he finally won a court order declaring the case a civil matter and ordering his immediate release, the police rearrested him outside the court. Stepping up the pressure, they transferred him to the capital’s Cipinang prison, where he spent a week sleeping on the floor of a mass holding area with common criminal suspects. Becoming seriously ill, he was transferred to a hospital. Some weeks later he was allowed home, with the police case still pending.
Conversely, the system is highly useful to rich vested interests who are trying to protect themselves against efforts by the state or other parties to investigate or retrieve ill-gotten gains, and to lighten or evade punishment.
The desultory pursuit of the Suharto family and its wealth after 1998 is the prime case in point. As we have seen, Suharto’s resignation was followed immediately by a public pledge by the defense forces chief, General Wiranto, to protect the ex-president and his family. Leaked conversations showed that his successor, Habibie, was similarly inclined. The law enforcement agencies reacted to calls for his prosecution timidly. They put Suharto under “city arrest” in early 2000 and announced that he would be prosecuted for embezzling some $571 million in government donations to charitable foundations under his control. But the courts repeatedly excused him from attending hearings on the grounds of ill health, certified by his own doctors, despite his frequently being photographed receiving visitors and making public appearances.
When Suharto did enter a final decline in May 2007, prosecutors decided to close the case, with Yudhoyono and his senior ministers saying it would be improper to order otherwise. In August that year, the Supreme Court gave another warning to his critics. In 1999 the US magazine Time had published a cover story alleging the Suhartos had accumulated about $15 billion worth of land and other wealth, and that a single transfer of $9 billion at the time of his fall had caused a tremor in European financial markets. Suharto sued. Two lower courts dismissed his case, even though Time was unable to prove its figures, notably about the alleged transfer of secret overseas funds. (Though the figure may have been questionable, that Suharto kept money hidden overseas was not. In 2007 the US ambassador Lynn Pascoe reported an executive of the Swiss-based UBS-Warburg as saying that Suharto had been “one of the biggest Indonesian customers” of its private banking arm for many years.) After a six-year delay, the Supreme Court suddenly upheld the defamation action, awarding Suharto Rp 1 trillion (then $106 million) in damages. The magazine would have the judgment overturned in a review, but for a while the decision had a chilling effect on the media. It was widely seen as a case of “judges for hire.”
The former president’s family members had a harder time but were not without help from corruption in the legal system. In 2000 his least popular child, Tommy Suharto, got an eighteen-month jail sentence from a Supreme Court judge over an $11 million land swindle. Tommy went underground but remained in contact with friends, who presumed him to be somewhere in the network of houses on Jakarta’s Cendana Street, owned by the Suharto family and hallowed ground that was still guarded by the military, and which the civilian police hesitated to search rigorously.
While Tommy was on the lam, the courageous judge Syafiuddin Kartasasmita died in a gangland-style hit. The assassination was traced back to Tommy, who was found in 2002 and sentenced to fifteen years in jail. Tommy served his sentence in a suite of eight air-conditioned cells in a luxury wing of Cipinang prison, one cell fitted as a billiard room. He had access to a special badminton court and once a week was seen at an exclusive golf course on “medical” parole. In a mysterious decision under Yudhoyono’s government, authorities released Tommy in 2006, only five years into his jail term.
In 2003 Suharto’s half-brother Probosutedjo also faced court on corruption charges. His jail term was four years, which was then reduced to two years. When he later complained that the reduction had cost some $600,000 in payments to the judges via his lawyers, without him knowing how much was really needed, his full sentence was reinstated. Probosutedjo was pulled out of a hospital and sent back to jail.
After Suharto died in January 2008, efforts turned to a civil action started in mid-2007 to recover some $1.6 billion ($440 million in state funds and over $1.1 billion in damages) from the seven yayasan (charitable foundations) that had been controlled by the former president. The money donated by or extorted from businesses—in the case of one foundation, a 5 percent levy on the profits of state-owned banks since 1976—had gone to many worthy causes, including thousands of scholarships, in displays of Suharto’s patronage. In the latter years of his presidency, it had also been shelled out to the president’s cronies, such as Bob Hasan, in unsecured, unrepaid “loans,” as well as to family interests. In March 2008 a Jakarta court ruled that one of the foundations, the Yayasan Supersemar, had to repay a quarter of the funds from state levies, $110 million, but declared the Suharto family itself not liable. Delivery of a single rupiah was still being awaited several years later.
Tommy continued to have friends in some courts. Prosecutors launched civil suits to recover assets and profits from his various land scams and initiated actions to seize $50 million deposited in the tax haven of Guernsey. Mysteriously, $10 million of this hidden money came back to him via an account held by the Ministry of Justice. When the state logistics agency Bulog sued Tommy for Rp 250 billion (then $28 million), which it claimed to have lost in a 1995 land deal, the judges at the South Jakarta District Court threw out the suit and instead awarded damages of $550,000 to Tommy for “defamation of character,” declaring him to be a businessman with “an international reputation.” The then finance minister, Sri Mulyani Indrawati, had a better run with Supreme Court decisions, enabling her department to seize back $134 million in state funds from Tommy’s defunct Timor car project.
In Indonesian circles, the terms “legal mafia,” “case broker,” and “account owner” are frequently used to describe coteries within the law enforcement and judicial communities. In these, there is little loyalty to the law, the government, or the judicial hierarchy, but a strong sense of entitlement to moneymaking opportunities.
On the founding of the republic, the Indonesian police inherited a tradition of military-style security enforcement from the colonial Feldpolitie. In 1966 Suharto put them under the Ministry of Defense as the fourth arm of the military. The attorney general’s office and the prosecutors beneath it were also put under tight military control, with top positions filled with army legal officers.
In the New Order, the highest priority was loyalty to the government and fulfillment of its objectives. Otherwise, resources allocated to the police and judiciary were tight, and agencies were left to raise their own funds. They became extortion rackets. The idea of prosecutors and defense lawyers being “officers of the court” went out the window. Police and prosecutors negotiated with the courts as equals, taking search-and-seizure orders as “requests” that had to be agreed to at top level. The law was a business, and all but a courageous few were part of it.
After 1998, reform measures tried to change this. The police were separated from the armed forces in 1999–2000. The court system and its administrative staff were placed under a Supreme Court that was given more independence, and judges were monitored and trained by a new judicial commission. But corrupt practices persist, with cases surfacing of large payments to court officials, and defense lawyers telling their clients of direct demands for payoffs from judges. Even in middle-level courts, these payments can amount to $50,000, in repeat doses, to stave off arrest. Whether defense lawyers are telling their clients the truth is another matter. As one academic legal expert puts it: “If the judgement is known in advance, they can play with that, and get someone to think they are paying for it.” The Indonesian legal community has numerous professional associations, for the simple reason that as soon as a lawyers’ body tries to exert any discipline on its members, it splits.
The Indonesian National Police were ill-prepared to take over their role as the country’s principal enforcers of law and public security, either in total manpower (150,000 in 1999), technical resources, or accountability. Its staff augment their low official salaries with distributions from blatant and illegal fundraising systems. Unofficial traffic fines collected in on-the-spot settlements by police are pooled at headquarters by designated “quartermasters” and then distributed down the ranks in regular extra pay envelopes. Ambitious police officers develop protective relationships with businesspeople, in many cases from the vulnerable ethnic Chinese community. The businessperson gets protection from violence and ad hoc extortion; the police officer gets money with which he or she can fund promotions or transfers. Less scrupulous protection rackets involve illegal drugs, prostitution, and gambling, and often are centered in sleazy nightclubs and short-stay hotels run by retired police.
One full-time focus for a number of officers is to look for opportunities for police to insert themselves into civil disputes and turn them into criminal cases, as in the failed coal mine case. Usually this involves debt disputes. Anecdotally, the practice is spreading wider. A housewife who borrows from a moneylender, a business unable to service its debts—all become prey.
Even the biggest multinational companies are not immune, despite being vital to the Indonesian economy. In 2013 local prosecutors in the attorney general’s office in Riau province persuaded the corruption court to jail two midranking employees of the biggest oil producer, Chevron, for allegedly defrauding the state of funds from an environmental cleanup that had never happened. Yet evidence showed that Chevron had not claimed any tax offset or other benefit, while soil testing made it clear that no problem existed. Another case launched by the attorney general’s office involved the alleged misuse of a wireless-spectrum license by Indosat, one of the largest telecom companies and controlled by Qatar Telecom. Its former chief executive got a four-year jail term.
Both cases are under appeal. To legal experts, they demonstrate two things. First, judges who had effectively been unexposed to commercial cases throughout their earlier legal careers were ill equipped to spot even blatant misapplications of the law and were often biased against big business. Second, the cases were a signal that prosecutors were willing to go after even the biggest oil and telecom companies.
In March 2008 the anticorruption commission fired what turned out to be the opening shot in a war with senior elements of the police and the attorney general’s office, a struggle that ultimately would threaten the KPK’s credibility. The agency arrested one of the top prosecutors in the attorney general’s office, Urip Tri Gunawan, while he was in possession of $600,000 in cash. Urip had been one of the leading figures in a drive launched by a new attorney general, Hendarman Supandji, appointed by Yudhoyono in 2007, to show that his department was in fact a credible anticorruption force, not part of the problem.
Along with the civil actions against the Suharto foundations, Supandji had decided to target one of the biggest elephants in the room. During his five-year stint at the National Audit Agency, the economist Joedono had discovered that the largest leak of government money had occurred in an institution that was meant to be a pillar of fiscal reform, the central bank.
Bank Indonesia had addressed the collapsing banking system in the 1997–98 Asian financial crisis by setting up a special liquidity fund to support commercial banks hit by runs on their deposits. One of the biggest private banks, Bank Central Asia, then controlled by longtime Suharto business associate Sudono Salim (Liem Sioe Liong) and two of Suharto’s sons, lost 50 percent of its deposits over two weeks. “The central bank would send truckloads of rupiah to the back door, and the employees would rush them to the tellers at the front,” recalls one banker. In all, Joedono says, some $64 billion in the rupiah value of the time was pumped into the system (by other calculations, the bank bailout amounted to $77 billion). In many cases, it went everywhere except to the bank customers, such as out to companies in Hong Kong, which were immediately folded up. Bank Central Asia was one that behaved “decently,” says Joedono, paying its account holders and quietly transferring equity to the government. But overall, only a small fraction was ever repaid or properly accounted for.
Joedono found the missing billions listed in Bank Indonesia’s books under “accounts receivable” as “perpetual interest-free loans.” The amount was big enough to throw the central bank into negative equity, if properly disclosed. “It was difficult for me to remain polite,” Joedono says. He refused to sign off on Bank Indonesia’s accounts and instead wrote a “no opinion” finding.
The then president, Abdurrahman Wahid, called him in urgently. “Whatever you do, don’t issue a no-opinion on the bank,” Joedono recalls Wahid saying. “That would be catastrophic. Confidence in the whole of Indonesia will vanish and the rupiah will have no value. We will be bankrupt!”
Joedono mentioned that Bank Indonesia had given him two different lists of its assets. “How can you have an opinion if you have two lists?” he asked Wahid.
In the end, Joedono stuck to his guns and issued the no-opinion report. The Ministry of Finance immediately recapitalized the central bank, and a crisis was averted. Joedono wrote a sixty-five-volume report, one volume on each of the banks refinanced by the liquidity fund, detailing what had happened to the money. He sent copies to the police, the attorney general, and the speaker of the parliament. Nothing happened for years, until Supandji decided to take the liquidity fund case up in 2007.
When Supandji’s investigator decided in March 2008 to close the investigation into two of the bailed-out banks, Bank Dagang Negara Indonesia and Bank Central Asia, for “lack of evidence,” the anticorruption commission was alerted. Some days later, it arrested Urip in the act of taking a $600,000 payment from a Jakarta socialite and business deal fixer, Artalyta Suryani, who happened to be a friend and neighbor of Bank Dagang Negara Indonesia’s former owner, the Sino-Indonesian tycoon Sjamsul Nursalim, who had moved his office to Singapore. Other senior prosecutors were called in for questioning. Six months later Urip received a twenty-year jail sentence in the corruption court, and Artalyta later got five years. No link to Nursalim was found. Soon after her release from her spell in jail—which included a cell with luxuries like air-conditioning, a widescreen television, and a sprung bed—Artalyta was questioned in Singapore over the case of a palm-oil plantation in Sulawesi that eventually saw the local bupati jailed.
After securing these convictions, the anticorruption commission took over the liquidity fund investigations from the shaken attorney general’s office. More embarrassing arrests followed. They included the central bank’s senior deputy governor, Miranda Goeltom, who up till then had been regarded as a path breaker for women into the top ranks of public service. It turned out that the approval of her appointment in 2004 had been eased by payments of $54,900 in traveler’s checks to forty-one of the fifty-six members of the parliament’s financial affairs commission. Further inquiries fingered other top Bank Indonesia officials whose appointments were also won by payments to parliamentarians. They included the father-in-law of one of Yudhoyono’s sons, who went to jail for five years. Government was bribing government.
In 2009, however, confidence in the anticorruption commission was badly shaken. In May that year, police arrested its chief commissioner, a former star prosecutor named Antasari Azhar. He was charged with ordering the execution of a Jakarta businessman, who had been found in his car with bullets in his head. The businessman was killed, police alleged, because he was blackmailing Antasari over an affair with his wife, a twenty-two-year-old golf caddy. Antasari was immediately fired by Yudhoyono and the following year was given an eighteen-year jail term. He continues to explore avenues of appeal, putting forward technical evidence showing that a threatening message to the victim could not have come from his mobile phone, as police alleged. His case that he was victim of a frame-up continues to have some credibility among the Indonesian public.
In September 2009 the police declared two other KPK commissioners, Chandra M. Hamzah and Bibit Samad Riyanto, as suspects in a case involving bribes from a businessman, Anggodo Widjojo, who was allegedly involved in a corrupt deal to supply communications equipment to the forestry ministry. The president suspended both commissioners from duty, and the KPK operated under a skeleton leadership. Then, in a sensational twist, transcripts of secret recordings surfaced that implicated Widjojo in a conspiracy to frame the two commissioners: the plot involved senior officials, notably a former deputy attorney general, Abdul Hakim Ritonga, an assistant attorney general for intelligence, Wisnu Subroto, and the national chief of detectives in the police, Inspector General Susno Duadji. The police proceeded with the case, arresting the two commissioners, and Yudhoyono ordered an inquiry from an independent team led by the prominent human rights lawyer Adnan Buyung Nasution.
A Facebook campaign in support of the KPK and its embattled commissioners gained more than a million supporters. Several thousand demonstrators took to the streets of Jakarta. When the recordings were verified in the constitutional court, open to a fascinated and disturbed public, the police released the two men. Nasution’s “Team of Eight” found the original bribery case against the two commissioners to be weak and recommended that it be dropped. They urged action against the officials pushing it, as well as reinforcement of the KPK’s status and wholesale reform of the police and prosecution branch.
In a virtual challenge to the president, a senior attorney general’s department official declared that prosecutors were ready to proceed with a case of extortion against the commissioners, while the police restored their chief detective, General Susno, to duty.
In December 2009 the attorney general’s office announced it was dropping all charges against the two commissioners, whom Yudhoyono then reinstated. Over the next year, the KPK moved against participants in the frame-up conspiracy, including the three-star police general, Susno. The police were reluctant to sack their third-ranking officer. When they did, he negotiated to be replaced by a close ally who was known to have a dubious record of protecting illegal gambling and logging.
It took over three years to put Susno in jail. After exhausting his appeals against his forty-two-month jail sentence for corruption and abuse of power, he took to the hills, broadcasting on YouTube that he was only upholding the law because his detention order had not been delivered properly. He was found in the West Java capital, Bandung, after several days on the run and in the protection of police colleagues, including at the provincial police headquarters, from where he was eventually extracted and taken to prison.
In custody, Susno cooperated with KPK investigators by blowing open many of the rackets involving the police and legal mafias, networks so serious that the anticorruption commission was like “a gecko tackling a crocodile,” he claimed. “Suharto was the smiling general,” he told interviewers, a reference to the title of a hagiographic book about the previous regime head. “I’m the singing general.”
Whether or not Susno’s information actually helped, the KPK did move against corrupt elements in the police and judicial system. The agency gained the conviction of a former Indonesian diplomat who was known as a leading “case broker” in the law courts, a man said to be working with a retired police general. He had offered Susno a big bribe to turn a civil case into a criminal one.
In September 2013 Djoko Susilo became the first serving police general to be convicted for corruption, for which he got ten years in jail. The former head of the Indonesian National Police’s traffic division had gained Rp 32 billion ($2.6 million) from the winner of a tender for providing driving simulators, in a contract inflated by Rp 145 billion ($12 million). The anticorruption agency presented the court with evidence that Djoko had amassed over Rp 100 billion ($8.3 million) in assets over the previous ten years, despite having a salary of only Rp 28 million ($2,300) a month. The ownership of luxury houses across Java and Bali, tour buses, petrol stations, and other properties was put in the names of his three wives and other relatives. On receiving a copy of Djoko’s autobiography during a tear-filled defense plea, the judges were astonished to find a $100 bill slipped between the pages.
By the end of Yudhoyono’s second term, the anticorruption commission was one of the more successful additions to the armory of the newly democratic Indonesian state. Its headquarters and leaders were known to all and sundry. Tens of thousands of tip-offs flowed in each year. Swarms of reporters camped at its front door every day, waiting for fresh news. The anticorruption drive was supported by many of the biggest civil society groups, including NU and Muhammadiyah.
But the KPK had its weaknesses, which are only gradually being addressed. Many of its operational difficulties stemmed from the reluctance of Indonesia’s ministries and agencies to cooperate and share information with other arms of government or even with different branches of their own agency. This continues despite the formation in 2005 of the Interagency Team to Eradicate Corruption. Inaccessible reporting by the two government audit agencies, especially since some 30 percent of government spending is devolved to provinces and regencies, removes a vital support for the anticorruption effort. Speedy access to bank records has been another problem area, as searches require high-level formal requests to the central bank for permission. A new witness protection agency can be employed to keep the anonymity of whistleblowers and informers, but the KPK lacks the power to give immunity from prosecution, lessening the chances of low-level participants in corruption squealing on those higher up. Judges are slowly getting used to new forms of evidence, such as secret recordings, financial data, and retrievals from computer hard drives.
An anti-money-laundering law was passed in 2010, but it is still not used. Indonesian law enforcement agencies remain weak when it comes to following money trails, except when large amounts of cash are hand delivered. Even then, golf instructors, security guards, and even parking attendants are employed to maintain a cutout in the chain of responsibility and to take the rap if necessary. Not having the power to terminate an investigation can make the KPK hesitate to start one. Poor definitions of a “loss to the state” lead courts to conclude that corruption cannot exist without such a proven loss. Conversely, judges and prosecutors often conclude that “losses to the state” must result from corruption rather than from mistaken decisions, such as with loans from state banks that become nonperforming. An extradition treaty was signed in 2007 with Singapore, the bolt-hole where 18,000 Indonesian millionaires resided with total estimated assets at the time of $87 billion. It remains unratified by the Indonesian parliament.
The integration of the corruption court into the general court system under the aegis of the Supreme Court, resulting from a constitutional challenge to a “separate” judicial system, led other agencies to file cases with the corruption court. The Chevron and Indosat prosecutions were two examples in which regular state prosecutors made criminal cases out of what looked to every expert in those fields to be just routine and perfectly legal technical matters. While the KPK continued to have a 100 percent success rate with its cases in the court, the attorney general’s office started recording some acquittals, raising suspicions that some cases had been doctored to fail.
The parliament, whose members were so often in the sights of the KPK, also jumped into the corruption hunt for evident political purposes, notably in the long-running Bank Century case. The medium-sized bank was showing signs of failure as the global financial crisis unfolded after the collapse of Lehman Brothers in September 2008. Fearing contagion in the Indonesian banking system should Century also fold, Yudhoyono’s coordinating economic minister, Sri Mulyani, and the Bank Indonesia governor, Boediono, decided in November 2008 on emergency capital injections amounting to $677 million. After Yudhoyono’s sweeping election win the following year, during which he replaced Jusuf Kalla with Boediono as vice president, the bailout became a weapon used against Yudhoyono.
Kalla led criticisms that the rescue money had been diverted for nefarious purposes, including the financing of Yudhoyono’s election campaign. Indeed, well-connected big corporations and state enterprises had gotten their money out quickly, and the bank’s two owners, Rafat Ali Rizvi and Hesham Al-Warraq, disappeared; both were later given fifteen-year jail terms for embezzlement.
Another target of the parliamentary claque was Sri Mulyani, who had reverted to finance minister in the second-term government. As we have seen, she was pursuing the leading figure Aburizal Bakrie’s business group for large unpaid taxes, was refusing to put government money into his financially troubled coal mine, and would not certify the Lapindo “mud volcano” in East Java as a natural disaster rather than an accident. The parliamentary uproar did not dislodge Yudhoyono or Boediono, but it did claim the scalp of Sri Mulyani for Bakrie. The news that she was moving to the World Bank in May 2010 shattered confidence that Yudhoyono’s second term would see him move ahead with serious reform and stamped him as a weak, consensual leader. Five years later, the parliament, the KPK, and the state auditors were still looking for any evidence that Sri Mulyani and Boediono acted out of any motive other than preventing a general bank run, or that they might have known about fraud in Bank Century at the time, and were not finding it.
A decade on from the start of Indonesia’s era of direct elections and political devolution, big corruption cases kept coming. Perhaps the most stunning fall from grace was the involvement of top figures in the PKS, a party of pragmatic work and faith that was based on the Muslim Brotherhood model in Egypt and Turkey. Campaigning on personal ethics and zero tolerance of corruption, it had won the fourth-biggest block of seats in the 2009 parliamentary election. In January 2013, KPK investigators raided a Jakarta hotel room to find one Ahmad Fathanah, a naked female student, and a suitcase containing Rp 1 billion. Ahmad turned out to be a secretary to Luthfi Hasan Ishaaq, chairman of the PKS. The case developed into a corruption scandal that reached up into the PKS and the agriculture ministry, one of the appointments allotted to the party in Yudhoyono’s ruling coalition. Money was coming via Ahmad from a company given a larger quota to import beef, a foodstuff in short supply. Millions were being raised with an eye to funding the approaching elections in 2014, less sizeable amounts siphoned off in passing by individuals for cars and gifts to female models.
Yudhoyono himself managed to get to the end of his decade in office without a financial scandal hanging over him personally, which was no mean achievement. But by then his own PD had taken a big blow. In 2012 his youth and sports minister, Andi Mallarangeng, had been forced to resign over alleged kickbacks from a contract to build a sports complex at Hambalang, in West Java. In early 2013 the anticorruption commission had also listed as a suspect Anas Urbaningrum, the party’s chairman in the parliament and a rising star who was being mentioned as a possible successor to Yudhoyono as presidential candidate.
From one point of view, the parade of big corruption cases rising higher and higher in the political world was a good sign for Indonesia. From another and more depressing angle, it seemed to show that years of active anticorruption detection and punishment were not deterring people from the most brazen misbehavior. One foreign business adviser in Jakarta for decades has likened the corruption load to the annual migration of wildebeest across the Mara River in Kenya. Most get safely across in the rush, but a few who are exposed on the flanks fall to the lurking crocodiles—in this analogy, the KPK.
Pushing the demand for bribes and extorted payments are low official salaries and the widening income gaps that are all too visible in Indonesian cities. Decision-making processes within government agencies have grown complicated precisely in order to extract fees from outside customers and from colleagues. Efforts to speed up and make transparent the more routine processing of permits and documents succeed where online and other methods can be employed. Sharply increased budget allocations to core agencies, such as the Indonesian National Police and the Ministry of Finance, are still not raising salaries enough to remove the need for moonlighting in second jobs or the temptation of corruption among the 5 million state-sector employees.
Five years after Sri Mulyani carried out a sweeping replacement of corrupt personnel in the finance ministry’s income tax and customs departments, tax officers were still soliciting bribes to reduce exorbitant opening tax assessments from big foreign companies. New recruits to the noncommissioned ranks of the police were still expected to pay some Rp 50 million ($4,100) for acceptance, to commence a job that paid just Rp 250,000 ($21) a month—below the poverty line—for the first six years. The fee for entry to the officer cadre was much higher. In August 2013, Sofian Effendi, from the Independent Team for Bureaucracy Reform, an activist group, estimated that, on average, a candidate for a civil service position had to pay Rp 150 million ($12,500) to be accepted.
Governors, bupatis, and mayors used these payments to recoup election expenses and to fund patronage. Karyono Wibowo of the Indonesian Public Institute, a think tank, said running for mayor or bupati could cost around Rp 5 billion ($416,000), depending on the region’s economic strength. Running for provincial governor could cost above Rp 100 billion ($832,000). Between 1999 and mid-2013, 298 governors, bupati, and city mayors (from the nation’s thirty-three provinces and nearly 500 regions and municipalities) were jailed for corruption.
Each year 170,000 new state employees are recruited. The new civil service recruits, having paid so much for their jobs, in turn squeeze their clients or accept bribes, according to Emerson Yuntho of the activist group Indonesia Corruption Watch: “They will start to do whatever it takes to get their money back. And once they enjoy the easy money, they will continue to accept bribes or stolen state money.”*
Johan Budi, the KPK’s public spokesman, argues that low salaries are not the only factor, or even the main one. He points to the stream of high-income officials coming before the courts for corruption. In August, for example, Budi’s agency arrested the head of the oil and gas ministry’s agency in charge of sales of surplus production to the state’s refining capacity, Rudi Rubiandini, as he received a $600,000 payment from agents of a Singapore oil trading firm. “Rudi would be on a salary of Rp 200 million [$18,000] or more per month. How much is enough?” Budi asked. A good argument, but public conjecture was that Rudi, previously a professor of petroleum engineering at the Bandung Institute of Technology, was perhaps simply a naive newcomer to a wider fundraising network within the ministry, known as the “oil mafia.”
Along with continued detection and law enforcement, and more transparent processes in government, a significant drop in corruption probably depends on a steady reduction in the size of the bureaucracy, a large proportion of which is idle for much of its working day anyway, accompanied by a rise in productivity and salary levels based on promotion by merit. That might be funded either by improved revenues or by part of the proceeds from cuts in subsidies for goods consumed mostly by higher-income groups. Planning for such a bold reform was delegated to Boediono in Yudhoyono’s second term but was abandoned as too hard.
At the KPK, Johan Budi admits the anticorruption fight will be “a never-ending story.” Meanwhile, any foreign investor will find it hard to avoid demands for payments from a baffling multiplicity of gatekeepers. Under Suharto, big and medium business at least knew who had to be satisfied: the doors then opened, and appeals could be made against any obstacles. Now their executives also remain at risk from police and the legal mafia, who insert themselves into commercial, environmental, and labor disputes, and extort money by putting staff in cells. The smaller the enterprise, the bigger the risk, but the Chevron case shows that size alone brings no immunity.
Indonesians are less and less accepting of the idea that corruption is part of their culture. Dozens of nongovernmental organizations, such as Indonesia Corruption Watch and Transparency International, are publicizing cases of malfeasance at the local and regional levels, bringing them to national attention, sometimes at great risk to their activists. The media relentlessly publicize investigations and trials. The quick rise of the “cleanskin” politician Joko Widodo from mayor of a small city to governor of the capital—and successful presidential candidate—shows that there is a hunger among the Indonesian public for honesty and moderation on the part of their leaders.
Notes
*Yuli, Krisna, Novy Lumanauw & Robertus Wardi, “Paying the Price for a Slack Civil Service,” The Jakarta Globe, August 29, 2013.