The Institute for Ethics and Economic Policy (IEEP)
To promote Governance with Respect Ethics Accountability and Transparency (GREAT)
CHICKEN FLU PUNISHMENT SOUGHT FOR INDONESIAN CORRUPTERS.
During an anti-corruption rally outside the attorney general’s office in
FORMER MPR SPEAKER BACKS DRIVE AGAINST CORRUPTION. Amien Rais, former speaker of the People’s Consultative Assembly (MPR), said on Tuesday that, although results had not been as good as expected, the government under President Susilo Bambang Yudhowono was on the right track in its fight against corruption. At the President’s invitiation, Amien spoke at the presidential office, saying that at the very least, Susilo’s actions had made a psychological impact, making people think twice before engaging in corrupt activities. Amien was accompanied by Sutrisno Bachir, chairman of the National Mandate Party, and Cabinet Secretary Sudi Silalahi (The Jakarta Post, June 28th, 2005, summary by Cecily Layzell).
PRESIDENT BACKS UN CONVENTION ON CORRUPTION ERADICATION. At a press conference in Washington DC, President Susilo Bambang Yudhoyono said that Indonesia fully supported the United Nations convention on corruption eradication, currently being deliberated at the House of Representatives. Indonesia is yet to ratify the convention but the President said that “we always support any global effort to fight corruption,” and welcomed closer cooperation with other countries, including the creation of extradition agreements, in order to avoid providing those involved in corruption with a haven. He added that Indonesia is involved in its own campaign to stamp out corruption, and perpetrators would be hunted down “wherever they are, even overseas”. Allegations of corruption at three ministries and 58 state-owned companies are currently being investigated (Yahoo! News, Jakarta Post, May 27, 2005, summary by Cecily Layzell).
Indonesia’s culture of corruption may hinder aid.
As world governments prepare to channel hundreds of millions of aid dollars to the tsunami-ravaged regions of Aceh Province, Indonesia’s culture of corruption has emerged as a major concern. The U.S. ambassador to Indonesia, Lynn Pascoe, said that the "high level of corruption" in Indonesia was "a very serious problem." He added that the Indonesian government had retained the American accounting firm Ernst & Young to audit the foreign aid being sent for the reconstruction. (International Herald Tribune, January 13, 2005, summary Sherldine Tomlinson).
Terrorist bribery allegations probed. It was reported that a suspect arrested in Indonesia’s Australian embassy bombing claim that Azahari Husin, whom is the country’s most wanted terrorist, escaped by bribing police. The allegation was made by Rois (Iwan Darmawan), who is believed to be the field commander of the embassy plot. Rois was one of four men arrested three weeks ago for the bombing that killed 11 people. (Washington Times, 24 November 2004 summary by Sherldine Tomlinson).
court sentences five businessmen in bank fraud. An Indonesian court convicted five executives of a private company of a multi-million-dollar corruption and sentenced them to jail terms ranging from eight to 15 years. The convicts were each director of five companies under PT. Gramarindo Group, to which a district branch of the bank channeled billions in form of an export credit. (Wall Street Journal, 01 October 2004 summary by Sherldine Tomlinson).
oil company suspends executive over corruption. It was reported that Indonesia’s national oil and gas company, Pertamina, has suspended one of its unit directors in a suspected corruption case involving more than 200 billion rupiah (US$21.5 million; euros 17.8 million). Pertamina Chief Operating Officer Widya Purnama said that "We have suspended the director ... and asked the police to investigate the case". Widya said that the official is suspected of misusing negotiable certificate deposits issued by a Pertamina unit, PT Pertamina Saving & Investment, in 2002. (Yahoo News, September 7, 2004 summary by Sherldine Tomlinson).
Yogya lawmakers to stand trial over graft charges. Three Yogyakarta councillors will go on trial for allegedly misusing Rp 1.4 billion (US$148,936) of public money meant for councillors' life insurance schemes, while six reelected others already convicted of graft have been installed in Padang. The accused are Umar from the National Awakening Party, Nurudin Haniem from the National Mandate Party and Herman Abdurrahman from the United Development Party. They were all charged with embezzling state money and could face prosecution at least four years in jail and a maximum life sentence. (Jakarta Post, 30 August 2004, summary by Sherldine Tomlinson).
East Timor,: Bribery case rocks Timor treaty. East Timor's Prime Minister, Mari Alkatiri , has angrily rejected claims he accepted $US2.5 million in bribes from oil and gas company ConocoPhillips to secure an investment in the Timor Sea, threatening to sue the company for including the claims in a legal action in the US. Alkatiri said that he has not been named as a respondent in the legal action, but he is seeking advice over a possible legal action in relation to the "defamatory" allegations as he considers Oceanic Exploration's claim to be "vexatious" and to have been filed in bad faith. (Australian Financial Review 05 Mar 2004 summary by Sherldine Tomlinson).
Court clears Indonesian speaker. Indonesia’s Supreme Court has dismissed a corruption conviction against the parliamentary speaker and Golkar Party presidential candidate Akbar Tandjung. Tandjung was appealing after being found guilty in September 2002 of embezzling $4.5 million in state funds. (BBC News, February 12, 2004, summary by Sherldine Tomlinson).
Islamic leaders vow to fight corruption. It was reported that Indonesia’s Islamic leaders declared a national war against corruption in politics. Anti-graft activists have long been complaining that as many as 70 per cent of the country’s MPs are tainted and do not deserve to be re-elected into office, and now the Muslim leaders have decided to lend their support to the anti-corruption campaign. (Straits Times, January 21, 2004, summary by Sherldine Tomlinson).
Ex-General to Make Run for President of INDONESIA. The former chief of the Indonesian military, who has been charged by the United Nations with crimes against humanity, presented himself as a candidate for his nation’s first direct presidential elections, scheduled for July 2004. General Wiranto, told a luncheon of foreign correspondents and diplomats that he could provide leadership and security for Indonesia after what he called five years of turbulence. (New York Times, January 16, 2003, summary by Sherldine Tomlinson).
CORRUPTION CAUSED BY REFORMS IN INDONESIA According to former Indonesian president B.J.Habibie, price of reforms in his country are corruption and weak law enforcement. Habibie, 67, who now lives in Germany, recently said at a gathering of Muslim intellectuals in Jakarta that KKN (acronym for corruption, collusion and nepotism) was prevalent not only in Jakarta but in almost all regions in the country. Habibie was known for several reforms he introduced during his presidency such as allowing more political parties, releasing political prisoners and freeing up the media. (AFP 16 Dec 2003, summarized by Hanh Vu).
WB to boost lending to Indonesia. According to report the World Bank has announced its commitment to increase loans to the Indonesia in the next four years. According government sources this will help the country lift millions of Indonesians out of poverty provided the government makes greater efforts in its anticorruption and good governance drives. (The Jakarta Post, December 4, 2003 summary by Sherldine Tomlinson).
Several KPK (Corruption Eradication Comission) candidates questionable, NGO says. The Coalition of the Judiciary Observers has lashed out at the committee selecting candidates for seats on the Corruption Eradication Commission, for choosing figures with questionable track records. Asep Fajar Purnama of the coalition said that at least half of the 40 candidates who qualified for the next selection stage were known to have close relations with allegedly corrupt high profile figures or convicts. (The Jakarta Post 21 Nov 2003 summary by Sherldine Tomlinson).
VP SAYS FORSAKING RELIGION CAUSES CORRUPTION IN INDONESIA. Indonesia's Vice President Hamzah Haz conceded that there is still too much corruption in the country. Haz's remarks came a week after a global corruption watchdog, Transparency International, named Indonesia as one of the most corrupt countries. Haz said one of the reasons why corruption is still rampant is because many Indonesians have forsaken religion. The Berlin-based group Transparency International last week listed Indonesia near the bottom of its list of corrupt countries, on the same level as Kenya but ahead of Myanmar, Angola, Cameroon, Paraguay, Nigeria and Haiti. (Agence France Presse 12 Oct 2003 summary by Sherldine Tomlinson and Hahn Vu).
Pertamina has new President in Board Shuffle Amid Concerns of Renewed Corruption. A senior oil ministry official said that Indonesia has changed the entire board of directors and board of commissioners of state-owned oil and gas company Pertamina, with Arifi Nawawi being named the company’s new president-director, replacing incumbent Baihaki Hakim,. (Indo Exchange, September 18, 2003, summary by Sherldine Tomlinson).
GOV. UNDER FIRE OVER CORRUPTION The Indonesian Supreme Audit Agency (BPK) was disappointed about the government’s effort to root out corruption in the country as according to BPK chairman Satrio B. Judono, only 505 cases of a total of 6,162 suspected corruption cases reported by the watchdog since 2001 had been investigated by both law enforcement agencies. He added that the total cases could have cost the state 2.05 trillion rupiah (some $242m) while by handling the 505 cases, the government is likely to regain 24.4bn. rupiah ($2.8m.), reflecting the country’s half-hearted efforts to stamp out graft. (Xinhua News Service, 25 Sep 2003, summarized by Hanh Vu).
FOUR WIN BUNG HATTA ANTI-CORRUPTION AWARD On Monday, Bung Hatta Anti-Curruption Award – the first of its kind in the country which is named after the nation’s first vice president, Mohammad Hatta was presented to 4 people for their relentless dedication to the fight against corruption. They are Karaniya Dharmasaputra, the managing editor of Tempo weekly news magazine, won in the civil society category; Erry Riyana Hardjapamengkas, former president director of PT Timah Tbk, won in the business category; Mohammad Yamin, the head of the Attorney General´s Office´s Training and Education Center, and Syamsul Qomar, a judge at the Langsa District Court in East Aceh, Nanggroe Aceh Darussalam, both won in the government category. all of them were chosen by a by a nine-member jury who are high-ranking officers from government and NGOs in Indonesia. (Jakarta Post, 16 Sep 2003, summarized by Hanh Vu).
CORRUPTION case against Suhartos’ daughter dropped. Prosecutors have dropped an investigation into alleged graft by former dictator Suharto’s eldest daughter and two of his cronies. The Attorney General’s Office found no irregularities in a deal involving a pipeline company owned by Suharto’s daughter Siti Hardiyanti “Tutut” Rukmana and state-owned oil company Pertamina. Suharto’s family is widely believed to have exploited its grip on power over three decades to make a fortune estimated at US$10 billion through deals with favoured businessmen. Suharto’s youngest son Hutomo Mandala Putra was convicted three years ago on graft charges, but absconded. He has since been jailed for ordering the killing of a judge. (The Star (Malaysia) 22 Aug 2003 summary by Sherldine Tomlinson).
Anticorruption stalled. President Megawati Soekarnoputri came under criticism for stalling the establishment of an anticorruption commission. Indonesian Corruption Watch coordinator Teten Masduki said that the President had failed to show commitment to fight corruption and promote good governance. The Anticorruption Law which was passed last November stipulates that the five member commission will have the authority to investigate all graft cases involving state officials and prosecute them in court. (The Jakarta Post 27 Jun 2003, summary by Sherldine Tomlinson).
40% OF ADB LOANS IN INDONESIA LOST TO CORRUPTION, CONSULTANT SAYS It's said by Kartorius Sinaga, an ADB consultant on technical assistance, some 40% of Asian Development Fund (ADB) loans allocated for development projects in three provinces North Sumatra, East Java and West Nusa Tenggara in Indonesia has been embezzled. ADB loans for the three provinces in the past 5 years had reached $1bn. to support 72 development projects which were designed to help poor people solve poverty and health problems but in fact the local people bear the brunt of cuts in ABD loans due to improper implementation, he said. The corruption of ADB loans, according to him involved bureaucrats from the central down to district governments. (Antara, 23 Jun 2003, summary by Hanh Vu).
CORRUPTION CONVICTION FOR SUHARTO RELATIVE. A court in Jakarta has sentenced Indonesian businessman Probosutejo, a half brother of former president Suharto, to four years in jail for corruption. Probosutejo was convicted on charges of failing to repay more than 100 billion rupiah in interest-free loans received from a state reforestation fund by the timber-estate company of which he was director. He is the second member of Suharto’s close family to be jailed after Hutomo "Tommy" Mandala Putra, the former president’s son, was convicted on charges including murder in 2002. (ABC Radio Australia News, 22 April 2003, Summary by Greg Davies).
Jakarta, CORRUPTION CLOUDS CONSTRUCTION PERMIT APPLICATIONS. To build in Jakarta, one must apply for a construction permit. A woman who spoke to the Jakarta Post said that she had to pay several hundred thousand rupiah when applying for a permit to build a house, and then she was asked by the processing officer to pay an additional 'administration fee' to process the permit quicker than normal. Without the extra administration fee, the officer threatened that the permit would not be processed, despite the initial application fee. The Building Inspection and Planning Department of a West Jakarta municipality said that there should be no extra administration fee charged when applying for permits. Administration fees have become a new 'business'; officers that process permits will do it quicker if paid the administration fee, and then keep the money for themselves.(The Jakarta Post, March 24, 2003 Summarized by Laurie Morra).
INDONESIA 'ON TOP OF ASIAN CORRUPTION LEAGUE' According to the Asian Intelligence report, Indonesia was the most corrupt of 13 Asia-Pacific countries listed for the sixth year running, followed by India, Vietnam, Thailand and China among which China has perceived corruption grew more than any other country. Some estimated China loses 15% of its annual gross domestic product (GDP) in unpaid taxes and skimming of public funds. Singapore was easily the cleanest country, followed by Australia, the United States and Hong Kong. (Gulf Daily News 12 Mar 2003, summary by Hanh Vu).
Government seeks international help in fighting corruption. Indonesia has asked the international community for support in its fight to stamp out corruption. With the support of the international community, the government would obtain a great deal of information and come up with a better strategy and solution to combat corruption. Blamed for the prolonged economic crisis, corruption is rampant and appears to be spreading, with many suggesting that it is getting out of control. (World Bank Development News Mar 6 2003 summary by Sherldine Tomlinson).
World Bank urges Megawati to focus on investment, anti-corruption . A court has sentenced Peru’s former attorney general to 10 years in prison on corruption charges. The court found Colan guilty of crimes related to receiving $10,000, failing to show how she paid for a $750,000 house and shelving an investigation into a bribery case involving the ex-spy boss. Colan, who was arrested in July 2001, said that she is innocent of the charges and that she will appeal the decision to Peru’s Supreme Court. (Yahoo News, January 24, 2003, summary by Sherldine Tomlinson).
DEFORESTATION IN INDONESIA LINKED TO CORRUPTION - Telapak and Environmental Investigation Agency, two environmental groups that operate in Indonesia, identify corruption as the force behind continued destruction of Indonesia’s forests. In its report, the groups say that despite the laws, which ban logging of its forests, corruption among politicians and in the legal system allows loggers to buy immunity. The groups have concentrated their investigations on Tanjung Pating National Park on the island of Borneo, which is home to protection centers for Southeast Asia’s largest primate, the orangutan. Although Indonesia has done valuable work in limiting the international trade of illegal timber, the country must face its domestic situation in order to tackle illegal logging. (VOE News, January 14, 2003, summarized by Vincent Fung).
audit body files suit against attorney GENERAL . The Civil Servants’ Wealth Audit Commission (KPKPN) has filed a lawsuit against Attorney General M.A. Rachman over alleged corruption. Rachman has been under fire since two months ago after trying to hide his alleged ownership of a luxury house and a bank account from the audit commission. Moreover, Barman Zahir, the spokesman for the Attorney General’s Office, said in an interview that the move was strongly politicised. "There is a political conspiracy behind the move and the main target has been Mr. Rachman in personal," he said, stressing that he would welcome any effort to bring the commission to dissolution. (Xinhua News Agency, December 3, 2002, summary by Sherldine Tomlinson)
JAKARTA. BROADCAST BILL CRITICISED. A new draft of the Indonesian broadcasting law has disregarded calls to drop a clause that allows the government to ban a broadcasting station. This regulation, they said, was a repeat of the New Order regime's authoritarian practice of controlling the media. The government has maintained an article that empowers it to interfere in broadcasting activities. Leo S. Batubara of the Indonesian Press and Broadcasting Society (MPPI) expressed his regret, saying that both legislators and government failed to accommodate the aspirations of the people. "They do not listen to public demand. They work only according to their own concept," Leo told The Jakarta Post on Wednesday. According to Leo, the ignorance of legislators and the minister indicated an authoritarian attitude, which he said was the true character of Indonesian officials. (Kurniawan Hari, The Jakarta Post, 7 Nov, 2002, summary by Gray Charlton).
Indonesia´s economy shapes up but critics warn corruption could hold back investors Indonesia’s battered economy is rebounding and the government is shoring up its finances. However, critics charged that problems in the courts and with corruption must be cleaned up to encourage investment. "Corruption is permeating every sector of life and we have not been able to overcome that," said Jusuf Wanandi of the Center for Strategic and International Studies in Indonesia. Finance Minister Boediono has acknowledged that Indonesia needs to reform its legal system to give investors more confidence. (Yahoo News, October 9, 2002, summary by Sherldine Tomlinson).
Former Indonesian minister faces corruption charge . Prosecutors have asked an Indonesian court to sentence former trade and industry minister Rahardi Ramelan to five years in jail for graft. The chief prosecutor says Ramelan "legally and convincingly" committed corruption by disbursing and using about $US7 million in funds from the state logistics agency Bulog. Ramelan, the former Bulog chief, says the funds were disbursed in line with arrangements set down under presidential decrees, laws and government regulations. The amount in the charge covers the funds that house speaker Akbar Tanjung was found guilty of misusing during a separate trial last month. He was sentenced to three years in jail but remains free, pending his appeal. Ramelan’s lawyers say their client was forced to cover up for Tanjung during a meeting in October 2000. (ABC News, October 1, 2002 summary by Sherldine Tomlinson).
JAKARTA, FAILED JAKARTA MAYOR DEMANDS BRIBE MONEY BACK. Disgruntled losing gubernatorial candidate for the capital Jakarta has demanded city councilors return the advance payments he made them, to the tune of 200 million rupiah ($20,000), after most of them voted for the incumbent Sutiyoso, deploring those who made statements saying no money politics was involved. The re-election of Sutiyoso brought massive protests as he was accused of human rights abuses, corruption and incompetence, but surprisingly won endorsement from the President, Megawati Sukarnoputri, who ordered members of her party to vote for him. (AP, September 14 2002, summary by Michel Alexandre Salim).
CUSTOMS CORRUPTION COSTING INDONESIA BILLIONS OF DOLLARS About S$9 billion (US$ 5 billion) a year was swindled out of Indonesia Government by avoiding duty or outright smuggling; up to 75% of household goods namely TV sets, refrigerators, handheld computers ect., are imported without paying import duty and other taxes; thousands of entrepreneus across Indonesia make it a habit to cheat the government by under-invoicing or outright smuggling of imported consignments. It's suggested to have a thorough clean-up of the Customs service, which has consistently been ranked as one of Indonesia's most corrupt agencies but according to Mr. Eddy Abdurrahman, the newly appointed director-general of Customs and excise, it's an impossible job to totally eliminate all the corruption that has infested the directorate. (The Straits Times, 17 Sep 2002, summary by Hanh Vu).
Indonesian ex-minister charged with corruption The Indonesian Attorney General’s Office (AGO) summoned has ex-minister of mining and energy Ginandjar Kartasasmita for alleged corruption from a contract when he was in office. The technical assistance contract on oil production, worth 23.3million US dollars, was signed by state-run oil firm Pertamina and PT Ustraindo Petro Gas aiming at raising output and efficiency within Pertamina. Speaking to journalists, Ginandjar said he was innocent because when the contract took effect, he was no longer a minister although signing of the contract was under his command. He underlined that the contract initially stood on national interest ground and got support from the central government. (Xinhuanet, September 12, 2002, summary by Sherldine Tomlinson).
JAKARTA SPEAKER GETS THREE YEARS IN JAIL FOR CORRUPTION. An Indonesian court has ordered Akbar Tandjung, speaker of parliament and chairman of the Golkar party, to spend three years in jail following a guilty verdict for abuse of power and graft. The 57-year-old Tandjung is defying the sentence and has refused to resign pending an appeal. He denied all the allegations claiming that he misused four million dollars funded by the state logistics agency Bulog for disbursement to the poor while a cabinet minister in 1999. Loebby Loqman, an academic lawyer at the University of Indonesia, is criticizing the verdict, saying that Akbar got a light verdict. Teten Masduki, chairman of an anti-corruption watchdog, said that the court could have given Tandjung a life sentence if it followed the new corruption law passed this year. Lawyers predict an Tandjung's conviction eventually will be overturned, similar to that of central bank governor Syahril Sabirin, who the Supreme Court set free of corruption charges last week. (Financial Times, September 5, 2002, Summary by Eliza Villarino).
JAKARTA, FACTIONS GIVE AKBAR TWO OPTIONS: QUIT OR BE FIRED. Akbar Tandjung, Speaker of the House of Representatives (DPR), have been offered the chance of either resigning his post or being dismissed by an honorary council, established in last month's Annual Session of the People's Consultative Assembly (MPR) to discipline legislators. Akbar was sentenced on Wednesday by the Central Jakarta District Court to three years in prizon for his part in the embezzlement of Rp 40 billion (US$ 4.5 million) of state funds. Akbar plans to appeal the verdict but motions to unseat him him has started. The temporary council includes the House speaker and deputy speakers as well as representatives from each of its 10 factions; its decision has to be approved by the President. (The Jakarta Post, September 08 2002, summary by Michel Alexandre Salim).
HIGH COURT CLEARS CENTRAL BANK GOVERNOR OF CORRUPTION. The Central Jakarta District Court has cleared Indonesia's central bank governor Sjaril Sabirin and three others of corruption charges. The court favored the appeal filed by Sabirin, which was earlier sentenced to three years in prison but never served jail time after being found guilty of misusing 80 million dollars in central bank funds in 1999. The said money was allegedly used to finance the election campaign of ex-President B.J. Habibie's Golkar party three years ago. While Sabirin is lauding the court's ruling, the Attorney General's Office is yet to determine whether to appeal the decision to the Supreme Court. The Indonesian Legal Aid and Human Rights Association secretary-general Johnson Pandjaitan said that he predicted that the central bank chief will be acquitted because of the political and economic vested interests involved in the case. (Associated Press August 30, 2002, Summary by Eliza Villarino)
REPORT REVEALS CORRUPTION IN COURT IS ORGANIZED The dark-side of Indonesian justice system panoramic has been brought to light recently in a report made by the Indonesian Corruption Watch (ICW) after a year of conducting study in this country. Corruption within the country's judiciary is glaring and well-organized, involving all players in the legal system, and is faced by justice seekers at every stage of court procedures, the report said. According to ICW chairman Teten Masduki, it's the aggressive legislature and more powerful regional governments that cause a shift in bribery money flow to the courts since it was harder to buy decision from government officials. (The Jakarta Post, July 23, 2002, summary by Hanh Vu).
PROSECUTORS SEEK JAIL FOR TOMMY SUHARTO Indonesian prosecutors have demanded that former dictator Suharto's youngest son Tommy be sentenced to 15 years in jail for allegedly ordering a judge's assassination. Prosecutors in the case have argued that the evidence against him was overwhelming. They cited witness testimony, weapons found and documents linking Tommy to the crime. At the time, Tommy was on the run from a jail sentence handed down by the judge for a corruption conviction. He has admitted meeting the judge in October 2000, soon after the judge had upheld the conviction, but denied threatening him or ordering his killing. Police made several bungled attempts to catch him, in what was a huge embarrassment for the authorities and led to accusations they were protecting him. Two men who say Tommy hired them have been convicted for the killing. Tommy has said he did not know the two men and he have denied charges of owning illegal weapons or being a fugitive from justice. (BBC News, July 15, 2002, summary by Sherldine Tomlinson).
CONVICTED CENTRAL BANK CHIEF TO SKIP IMF MEETING. Indonesia's central bank governor Syahril Sabirin , who was sentenced to jail for corruption but is free due to pending appeal, will be absent in the annual meeting of the International Monetary Fund to be held in Washington due to the imposition of a travel ban against him. A central bank official, stated that Sabirin could have requested the attorney general's office to temporarily lift the travel ban so he can attend the meeting but decided against it as he would be preparing his appeal and attending to other official tasks. Achyar Ilyas, Sabirin's deputy for international relations, and the finance ministry's secretary general Adi Paryono will represent Indonesia at the IMF meetin. Last March, a Jakarta court in March sentenced Sabirin to three years imprisonment in connection with the politically charged Bank Bali scandal, which involves the bank's payment in 1999 of a 546-billion-rupiah commission to PT Era Giat Prima, a firm associated with the then-ruling Golkar party to aid in the recovery of interbank loans worth 904 billion rupiah. Sabirin, who has refused to resign his position, has allegedly meddled by ordering the bank repays its loan to Bank Bali through a government guarantee scheme although it failed to meet the conditions of that scheme. (Agence France Presse, April 18, 2002, summary by Eliza Villarino).
TWO-THIRDS OF INDONESIANS ARE VICTIMS OF CORRUPTION. About two-thirds of Indonesians have been victimized by corruption. This is according to a nationwide survey conducted by the Partnership for Governance Reform of 1,250 households, 650 public officials and 400 businesses in 14 provinces. Findings show that traffic police are perceived to be the most corrupt, next in line are the customs department and the judiciary. Considered to be least corrupt institutions, in the following order, are: mosques, churches and temples; the post office; the news media; non-government organizations; and labor unions. The survey also indicated the (1) those surveyed public officials estimate that 48 percent were getting "unofficial payments;" (2) more than three-quarters of businesses routinely bribe government officials; (3) some 70 percent of the respondents consider graft as a disease and should be eliminated; (4) corruption is the most serious social problem; (5) less than ten percent of corruption cases were reported to authorities and that 71 percent stated that they have no knowledge to where or whom to report these cases; (6) about one percent of household income is spent on bribes, while businesses stated it is about five percent; (7) causes of corruption are low wages for officials, lack of enforcement and low morality; and (8) institutions which set great store on battling corruption are less corrupt than most, regardless of individual morality. The report advocated for an urgent action plan to address graft and corruption as it decreases the quality of public service and the integrity of public institutions and discourages private investment. The Partnership for Governance Reform, which is supported by the World Bank, the United Nations Development Program, the Asian Development Bank and donor nations, cited this social cancer originated from the New Order regime of Preisdent Suharto. (Agence France Presse, April 12, 2002, summary by Eliza Villarino).
INDONESIA,LIGHT SENTENCES WILL NOT DETER CORRUPTORS. Legal experts expressed their view that law enforcers should view corruption as a serious crime. Reluctance in sentencing would make the country incapable of fighting corruption. According to lawyer Todung Mulya Lubis "corruptors will learn that corruption is tolerable. The facts have shown that some of them can still earn big money without fearing the sentence, which is very light". Moreover, according to National Ombudsman chief Antonius Sujata "light sentences would only deter a small number of them; it is much better to prevent more people from committing corruption." (The Jakarta Post, 18 March, 2002, summary by Pavlidis George).
Military personnel accused of corruption to be tried in public court The Public Servants´ Wealth Audit Commission (KPKPN) is about to sign a memorandum of understanding with the Indonesian Military (TNI), the National Police and the Attorney General´s Office that will allow active and former military personnel accused of committing corruption, collusion and nepotism (KKN) to be investigated by the police and tried in a public court. The KPKPN deputy chairman Abdullah Hehamahua told The Jakarta Post that preparation for the draft of the memorandum of understanding is expected to be signed soon by KPKPN chief Yusuf Syakir, Attorney General MA Rachman, TNI chief Adm. Widodo AS, and the National Police chief Gen. Da´i Bachtiar. A high-profile corruption case, which involve former mines and energy minister Ginandjar Kartasasmita, a retired three-star Air Force marshal, is one example that showed that military personnel were often above the law. The Attorney General’s Office was forced to release Ginandjar last year after the South Jakarta District Court ruled that his detention was illegal and ordered that his case be taken to a joint civilian-military tribunal. (The Jakarta Post (Indonesia), February 26, 2002, summary by Sherldine Tomlinson).
CORRUPTION AND FLOODS. According to a member of Commission IV of the House of Representatives (DPR), representing the Golkar faction, the land use plan of the city of Jakarta needed reviewing. The opposition alleges that members of the Indonesian Real Estate Association (REI), particularly big developers, have partly committed violations against the city’s land use plan and spatial layout design. The most serious cause of the problem seems to be corruption and collusion involving government officials and real estate developers. According to Amir Karamoy, Deputy Chairman of the New Indonesia Association (PIB) Jakarta chapter: "The power of money has freely altered the land use plan and spatial layout design of a city/a region. I'm convinced that the damage that the power of nature in Jakarta, Bogor, Bekasi, Tangerang, Cikampek, Sukabumi, Puncak and Cianjur has brought, is the result of the avarice of big real estate developers and also the abuse of power by bureaucrats, the main pillar of Golkar's power during the New Order era." (The Jakarta Post, February 13, 2002, summary by Pavlidis George).
Jakarta, OMBUDSMAN TRAINERS GET COURSE. The National Ombudsman Commission is organizing a three- day training course for trainers of ombudsman with the aim of empowering the ombudsman's staff. The training course was attended by 30 participants representing organizations such as the Indonesian Corruption Watch, the National Commission on Human Rights, Police Watch and the Ministry of Justice and Human Rights. The National Ombudsman Commission, established under Presidential Decree No. 44/2000, has been given the task of monitoring the government's performance. (The Jakarta Post, February 6, 2002, summary by Pavlidis George).
ECONOMISTS WARN GOVERNMENT AGAINST Corrupt zoo officials likely to be dismissed Two executives of the Ragunan Zoo in South Jakarta lost their jobs because of corruption. Both Director Ismianto and general and project manager Allen Marburn is accused of committing irregularities. Although the two have not been charged officially, the city inspector Hendarin will ask to Governor to punish them. This is not the first time the zoo has been rocked by a scandal. Last year a scandal involving the miss used of funds to maintain the gorilla’s and use of funds to upgrade toilets occurred. Moreover, it was reported that Marburn also bribed councilors of Rp 90 million when they came to inspect the zoo. (The Jakarta Post, January 25, 2002, summary by Sherldine Tomlinson).
IRREGULATIES IN RICE PROGRAM. H.S. Dillon, executive director of the Centre for Agriculture Policy Studies said that the government of Indonesia should implement properly the distribution system of the "rice for the poor program" so that the heavily subsidized rice can reach really needy families. Local administrations at community level should disclose the names of recipients to the public. "Basically, the direct distribution system is good but this may also create some irregularities in the field if the public does not know the names of the recipients," told the prominent agricultural economist. A total of 2.35 million tons of low-priced rice will be distributed to 9.79 million poor households this year. The State Logistics Agency (Bulog) is well aware of the fact that such programs were the targets of massive corruption in the past. ( The Jakarta Post, January 16, 2002, summary by Pavlidis George).
Compensation fund risks corruption in Cirebon. Relief to the tune of almost Rp 1.5 billion to counter soaring fuel costs triggered by a reduction in government subsidies will be allocated this year to the West Java city of Cirebon. The specter of corruption there looms large, however, with local authorities saying they are even confused as to how the money would be distributed. The officials admitted that they have no statistics on the number of people eligible to receive the money. Apart from that, it was far from clear who would supervise the actual distribution of the funds, totaling Rp 1.487,460,000. "Until now, we don´t have data on the population of poor for whom this money is intended," said Nina Sekartina, president of the Gunung Jati General Hospital, which has been appointed to manage the money. Nor has management set criteria by which the needy could qualify, she said. But, "we are working on the data in coordination with the local administration," she added. The central government is allocating Rp 2.8 trillion in compensation to the poor in all provinces this year, after it opted to reduce the fuel subsidies, thereby raising prices. The money, aimed at developing national health and social programs for the poor, is planned to be channeled through ministries and other state agencies. Critics and non-governmental organizations alike have warned that such huge sums could easily be misused or siphoned off by corrupt officials and other individuals in the absence of proper delivery and supervision. Suryana, chairman of the city´s legislative body, cautioned that the lack of an exact supervision mechanism over the fund´s distribution exposes it to possible exploitation by corrupt individuals. "We are worried about new acts of corruption and nepotism in relation to the funds. Usually, a weak system of supervision brings about such practices," he said. Suryana said the local legislature will hold a hearing with officials at the Gunung Jati hospital fund management in an effort to bring order to the process. "We will ask the hospital leaders whether they are ready to take responsibility for use of the fund. If not, we will take firm action," he said. "It is the people´s money." Nina added that the fund is expected to finance health services of 3,556 poor patients this year. (The Jakarta Post, January 17, 2002, summary by Sherldine Tomlinson).
Ex-central bank director tried for US$180 million corruption. A former director of Bank Indonesia stood trial on Monday at the Central Jakarta District Court for allegedly abusing his authority by manipulating the central banks liquidity support (BLBI) funds causing the state to suffer Rp 18.164 trillion in losses. Paul Soetopo Tjokronegoro, 61, along with several other former Bank Indonesia directors, was accused of amassing wealth for himself and other parties during his term in 1997. "The defendant had disbursed state funds to private banks that were not eligible to receive them," prosecutor Heru Chaeruddin told the court, presided over by Judge Rusydi As´ad. The defendant, who looked calm during the hearing, is charged under Anticorruption Law No. 3/1971, which carries a maximum penalty of life imprisonment. The defendant, along with other BI directors, was responsible for disbursing over Rp 18.164 trillion in state funds to 45 private banks. According to central bank regulations, the private banks were not eligible to obtain the funds because the banks´ accounts in the central bank were in deficit. "The defendant should have imposed sanctions on the private banks but he did not," Heru said. On Aug. 15, 1997, the defendant and other former BI directors, including Hendrobudiyanto, Heru Soepraptomo, Boediono, Haryono, and Mukhlis Rasyid, and central bank Governor J. Soedradjat Djiwandono decided that the central bank would disburse the state funds to banks that were facing liquidity problems during the monetary crisis. Hendrobudiyanto is scheduled to be tried on Jan. 21, while Heru Soepraptomo will appear on Wednesday for the same case in the same court. Paul, Hendrobudiyanto and Heru Soepraptomo lead a unit of the central bank to supervise 76 private banks that were having financial problems. But they failed to stipulate clearly the requirements to obtain the funds that were later disbursed without proper procedures. The court will resume on Jan. 23 to hear the response from Paul and his lawyers. Paul is the first former government official to face trial linked to the manipulation of BLBI funds. He was detained from June 21, 2000 to Oct. 2, 2000, and was put under house arrest until Oct. 18 last year. He is not currently under detention. The former deputy director of Bank Aspac, Hendrawan Haryono, was acquitted from corruption charges in the first BLBI case in June last year. Instead, he was sentenced to one year in prison and was ordered to pay a Rp 500 million fine for violating banking laws. Currently, several bankers are being tried for allegedly misusing the BLBI funds. Among them are Leonard Tanubrata, a former president of Bank Umum Nasional; Kaharuddin Ongko, a former deputy commissioner of the bank; Samadikun Hartono a former president of PT Bank Modern; and former officials Bank BHS Hendra Rahardja, Eko Edi Putranto and Sherny Konjongian. Hendra, Eko and Sherny are tried in absentia as they are still at large. (The Jakarta Post, January 15, 2002, ,summary by Sherldine Tomlinson).see http://globalarchive.ft.com
NGO data alleges massive corruption in Tangerang. Two non governmental organizations (NGOs) focusing in observing the performance of the Tangerang mayoralty stated that they uncovered a large amount of budget misappropriation and project failures last year. Ibnu Jandi from the Public Policy revealed that their surveys discovered the misuse of Rp 24 billion fund for 14 development programs in Tangerang, leaving the projects unfinished. Double allocations were found for the following projects: an urban innovation management project (Rp 1.4 billion),designing zoning plans (Rp 600 million), bylaw dissemination program (Rp 100 million), administrative development control (Rp 200 million), establishment of a regional development program (Rp 200 million), supportive functional controlling activities (Rp 50 million), regional development planning (Rp 50 million), public development planning (Rp 150 million), and support of political parties (Rp 500 million). Tony Wismantoro of Tangerang Government Watch opined the municipal council should be blamed for that the failures because they approved the proposed budget sans the involvement of local community actors like the NGOs, businessmen, public figures, experts, professionals and observers. The two NGOs also censured the establishment of an administration office center while there are still some buildings which could be used. Mayor M. Thamrin rejoined that no misappropriation of budget occurred in 2001. But when confronted with the report of the NGOs, he stated that he would study it but retained his position of proper use of funds, only that they could not have been in line with the planned programs. (Jakarta Post, January 9, 2002, summary by Eliza Villarino)
FORMER INDONESIAN FIRST LADY DENIES RECEIVING MONEY FROM SUHARTO SON. The wife of former Indonesian president Abdurrahman Wahid, Sinta Nuriyah, has refuted allegations she received five billion rupiah (480,770 dollars) from the errant son of ex-dictator Suharto, Hutomo "Tommy" Mandala Putra to bribe his way to a presidential pardon. Tommy is being probed due to charges that he masterminded the murder of a Supreme Court judge. Wahid’s wife also declared she intends to file a libel suit against Tommy's lawyer Elza Syarief and former Jakarta police chief Inspector General Sofyan Jacoeb who publicly pronounced that her foundation had benefited from Tommy's billions. Meanwhile, Tommy is suing two close associates of Wahid, Dodi Sumadi and Abdullah Sidiq Muin for allegedly receiving over 20 billion rupiah aimed to obtain a presidential pardon for him. Previously, Suharto’s son sought presidential clemency from Wahid to avoid an 18-month jail sentence for corruption. Wahid rejected the plea and admitted that he met Tommy on an unknown date immediately after the Supreme Court ruling. Wahid has denied charges of receiving money from Tommy. (Agence France Presse, January 8, 2002, summary by Eliza Villarino).
HEAD OF PARLIAMENT UNDER GRAFT SUSPICION. The head of Indonesia's parliament, Akbar Tandjung, was named a "suspect" in the embezzlement of $7.7 million in state funds. In 1999, Mr. Tandjung was a minister and he received 40 billion rupiah from Bulog (a state food agency); he alleges that the money was passed to an Islamic humanitarian foundation, but the prosecutors suspect that the money was transferred to the Golkar party, which Mr Tandjung chairs. Mr Tandjung has denied the accusations. President Megawati Sukarnoputri has given the Attorney-General's office freedom to question Mr Tandjung and name him as a suspect, removing his parliamentary immunity against prosecution. (Source: The Australian, January 8, 2002, summary by Pavlidis George).
TOMMY SUHARTO DEMANDS FOR BRIBE TO BE RETURNED Tommy Suharto, son for former President Suharto has demanded that the bribe of $2 million that he paid to two men be returned. His lawyer said that the amount was a bribe given by him in order to secure a pardon from the 18- month sentence indicted on him on corruption charges after the Supreme Court had overturned two acquittals, and that the then President Abdurrahman Wahid had personally chosen the two men to carry out the work. The two men have denied receiving any money and Mr. Wahid is to be questioned by the police on the same. Tommy who has been a fugitive for over a year was pardoned of his conviction even while he was on the run, but was detained last November on suspicions of having murdered the judge who convicted him. (The New York Times, January 4, 2002, summary by Aruna Balakrishnan).
PRESIDENT SOEKARNOPUTRI APPEALS TO SOCIETY TO HELP FIGHT CORRUPTION In her New Year speech, president Megawati Soekarnoputri largely tackled the issue of corruption, collusion and nepotism (KKN) and the fight to eradicate it that was not finished in 2001, appealing to the idealism, religious teachings, personal morals, culture and tradition of officials and common people altogether, adding that the resolution of political problems should be the concern of qualified constitutional bodies. (Financial Times (Media Indonesia) January 2, 2002, summary by Monica Voitovici).
TOMMY SUHARTO’S ARREST LAUDED, YET ALLEGED TO BE A POLICE SET UP, , Tommy Suharto, fugitive playboy millionaire son of former President General Suharto, who was on the run from last November was finally arrested in South Jakarta on Wednesday after a 10 days of follow up by an undercover team. Tommy was in hiding since he failed to hand himself over to an 18- month jail sentence last year and is wanted on allegations of a drive- by murder of Judge Syafiuddin Kartasasmita, who had originally upheld his convection. He is also wanted on questioning over a spate of bombings in Jakarta. However, the police have been riddled with ridicule over bungling the manhunt despite conducting high profile raids, air dropping ‘wanted’ posters and offer of rewards. Moreover, the timing of the arrest linked to the last day of service of General Suroyo Bimantoro, the national police chief, and reports in media of Tommy having actually surrendered to arrest, had sparked off allegations of police set- up of the whole incident, which the police have denied. Indonesian Foreign Minister Hassan Wirajuda has said that the proceedings reinforce Indonesia’s efforts to enforce the law. (BBC news, November 29, 2001, summary by Aruna Balakrishnan)
EX- CHIEF OF NATIONAL FOOD AGENCY, BULOG SENTENCED IN A MULTI- BILLION DOLLAR SCAM. Mr. Beddi Amang, former top Government official has been sentenced by an Indonesian court to two years in prison and a fine of 5 billion rupiah ($790,000) as he was found guilty of corruption which caused a loss of 95 billion rupiah to the state. This indictment is seen as a rare success as Indonesia strives to prosecute those involved in graft during the 32-year dictatorship tenure of Suharto, which ended in 1998. Amang is the third person to be convicted in this scam, after Suharto’s youngest son Hutomo, and a close associate Riccardo Gelael. (The Advertiser, via AP, November 6, 2001, summary by Aruna Balakrishnan).
Jakarta, INDONESIA TURNS UP HEAT ON CORRUPTION. The Indonesian House of Representatives is expected to pass soon a new anti-corruption bill. The new legislation will, among other things, shift the burden of proof (suspects being held on corruption charges will be presumed guilty until they prove otherwise). Civil courts will be allowed to reopen closed corruption cases tried in criminal courts if new evidence shows that wealth accumulated by "corrupters" came from corruption. The civil court will also be given the power to confiscate the wealth. According to a survey published by Indonesia's Partnership for Governance Reform, a multi-stakeholder NGO financed partly by the World Bank, 65 % of 2,300 respondents have in one way or another made undue payments to government officials. Approximately 35 % of business enterprises decide not to invest in the country due to the high cost related to corruption. (Source: Asia Times, October 30, 2001, summary by Pavlidis George).
PRESIDENT MEGAWATI SUKARNOPUTRI MARKED 100 DAYS IN OFFICE YESTERDAY WITH THE THREAT OF UNCHECKED CORRUPTION AND RAPIDLY DECLINING NATURAL RESOURCES TOP OF HER AGENDA. Megawati Sukarnoputri is the new president of Indonesia. She marked 100 days in office yesterday with the threat of national disintegration, unchecked corruption and rapidly declining natural resources top of her agenda. Her first progress report will be presented to the country's highest legislative body. Meanwhile, a scandal in which the speaker of parliament, Akbar Tandjung, allegedly embezzled £2.5m of state funds, highlights that corruption is still a great problem in Indonesia. (Source: The Guardian, Reuters, October 31, 2001, summary by Pavlidis George).
GUNMEN KILL INDONEASIAN JUDGE WHO JAILED EX-DICTATOR SUHARTO’S SON Sayaiffuddin Kartasasita, presiding Supreme Court judge, was shot five times at close range by professional assassins while driving to his office in central Jakarta. Kartasasita sentenced Tommy Suharto, youngest son of ex-dictator Suharto, to eighteen months in prison for his part in a multimillion-dollar land scam scandal. He also rejected an appeal by Bob Hasan, millionaire businbessman and Suharto crony, who was charged with corruption and is serving a two-year sentence. President Megawati Sukarnoputri ‘s new administration have indicated that prosecution of Shuharto’s three children should not inflict suffering and it is not immediately clear whether Sukarnoputri’s influential husband, Taufik Kiemas, will recommend a pardon. (AP, July 26, 2001, summary by Marg Reynolds).
Financial Action Task Force (FATF), international body against money laundering has ADDED this country to its Blacklist.(Wall St. J. June 22, 2001, p. A3).
PRESIDENT APPROVES GRAFT PROBE INTO CRITICS; CABINET RESHUFFLE FALLS FLAT General Baharudin Lopa, Attorney General, stated Abdurrahman Wahid, President, authorized prosecutors to investigate corruption allegations against several hostile lawmakers who want to impeach him for graft. Included in those to be questioned are: Akbar Tandjung, parliamentary speaker and Golkar Party head; Arifin Panigoro, Indonesian Democratic Party of Struggle official; and Nurdin Halid, Golkar Party member. Lopa denied the inquiries were designed to intimidate Wahid’s opponents, confirmed that it was a legal framework not a political one, but was not able to specify the allegations. Also noted, in a cabinet reshuffle to fix strained relations with the IMF, Burhanuddin Abdullah was appointed Senior Economics Minister and Anwar Suprijadi was appointed Administrative Reform Minister. (Vancouver Province (AP), June 14, 2001, summary by Marg Reynolds).
TIMBER BOSS NAMED IN GRAFT CASE Bachtiar Fachri, senior official of the Attorney General’s special crimes unit, stated Prajogo Panestu, timber tycoon and founder of Barito Pacific Timber, was being investigated as a suspect in a forstry graft case. A Barito-controlled firm obtained state forestry funds by fraudulently inflating the number of trees planted in 1991 under a reforestation program. Fachri noted Pangestu obtain 31 billion rupiah ($2.76 million) over the mark-up. Pangestu has denied any wrongdoing and his firm, Barito, became one of the state’s major debtors during the 1990’s Asian financial crisis, (AOL News (Reuters), June 11, 2001, summary by Marg Reynolds).
GOVERNOR ACCUSED OF CORRUPTION Muhammad Hadin Muhjad, law expert at the University of Lambung Mangkurat, stated prosecutors should investigate allegations of corruption, collusion, and nepotism against Sjachriel Darham, Governor of South Kalimantan. Ideham Zarkasi, head of an anti-corruption team, recently looked into irregularities in the budget of the governor’s administration. (Jakarta Post, June 8, 2001, summary by Marg Reynolds).
TOP BUSINESSMAN QUESTIONED IN CORRUPTION CASE Criticisms have been launched against President Abdurrahman Wahid for demanding Marzuki Darusman postpone and cause months of delay in an alleged 331 billion rupiah ($30 million) corruption investigation against Prajogo Pangestu, timber tycoon. Marimutu Sinivasan and Sjamsul Nursalim, similarly accused in the award of forest concession projects, were said by Wahid to be needed to diminish the prolonged economic crisis of the country. Muhammad ‘Bob’ Hassan, prominent businessman and former Suharto associate, is serving a jail sentence of six years on a notorious Javanese prison island. (AOL News (Kyodo), May 18, 2001, summary by Marg Reynolds).
Jakarta, WAHID ADMITS IMPEACHMENT LOOMS. The President of Indonesia Abdurrahman Wahid was denying for months that he could lose his job. Finally, the President acknowledged on that his impeachment for corruption and incompetence was now almost certain. Nevertheless, Mr. Wahid promised to fight back and warned that the crisis could result in the nation breaking apart, as six provinces would secede if he quit. Mr. Wahid has apparently lost critical support from Vice President Megawati Sukarnoputri. The Vice President, who is the constitutional successor of the President, said that she was committed to its long-standing call that she becomes head of state. The aides of the Vice President confirmed that after months of indecision, she now favors impeachment as the best way to stop a protracted political crisis that has paralyzed the government and delayed economic recovery. (Source: The Times of India, May 16, 2001, summary by Pavlidis George).
NEW REGULATION ON CORRUPTION TO BE ISSUED Baharuddin Lopa, Minister of Justice and Human Rights, and Megawati Sukarnoputri, Vice President, are discussing the ‘shift of burden of proof system’ wherein defendants will be required to prove they are not guilty rather than as currently the prosecutors must prove the defendant is guilty. The regulation’s form is also being debated as to whether it should be a new law, a revision of a current law, or a regulation in lieu of law. Lack of political will, loopholes in existing laws and regulations, and corrupt judicial officers have been cited as some of the reasons Indonesia has one of the highest levels for corruption ratings in the world. (Jakarta Post, Apr 3, 2001, summary by Marg Reynolds).
INDONESIAN COURT AGAIN ORDERS RELEASE OF EX-MINISTER Judge Sudarto, at the South Jakarta District Court, ordered the release of Ginandjar Kartasasmita, currently Deputy Chairman of the People’s Consultive Assembly, and stated the Attorney General’s office has no authority to detain him, although he was charged with corruption involving a case in the amount of $24.8 million. Another judge has also previously ruled his detention was illegal and Kartasasmita could only be arrested with permission of a joint civilian-military investigating team. The ruling is a setback in President Wahid’s anti corruption campaign, as he promised prosecution of key figures in Suharto’s dictatorial regime. (Yahoo News (AP), May 2, 2001, summary by Marg Reynolds).
IN INDONESIA, CORRUPTION IS A WAY OF LIFE Ginandjar Kartasasmita, former Mines and Energy Minister in the Suharto administration, has been arrested and charged with causing a $24.8 million loss to a state-owned oil company. Indonesia’s society is riddled with corruption at every level and the judiciary is perhaps the most corrupt in the world; the problem is with the enforcement and not the law itself. The bureaucracy, including customs and immigration officials, traffic police, and court clerks’ positions are auctioned, they must pay their supervisors a quota of their earnings, they keep the money raised by taking bribes from the public, and are replaced if they fail to meet their quota by those who can. This practice is called simony and some consular staff at Indonesian embassies worldwide use a version of it to haul in cash. Business travelers are at risk of being asked for bribes and jail wardens are also well-placed to collect bribes. Criminals have not fled the country as they know they can bribe their way out of any charges; for them staying at the scene of the crime is the safest option. (Theage.com, May 2, 2001, summary by Marg Reynolds).
PARLIAMENT CENSURES PRESIDENT Lawmakers have formally rebuked President Abdurrahman Wahid, leader of the National Awakening Party, for the second time for corruption and incompetence. Commencement of impeachment proceedings requires two rebukes and the vote raised doubts that Wahid’s presidency can survive more than a few months as eight of the ten party groupings voted against him. (Yahoo News, Apr. 30, 2001, summary by Marg Reynolds).
FORMER CABINET MINISTERS CHARGED WITH STEALING The threat of President Abdurrahman Wahid to fire Marzuki Darusman, Attorney General, if prosecution of Suharto regime senior officials did not take place has resulted in the arrest of Ginandjar Kartasamita, former Mines and Economics Minister, and Ali Wardhana, former Finance Minister. Kartasamita assisted in negotiations with the IMF after the 1997 Asian financial crisis, but has been charged in a case of Pertamina, the state oil and gas company losing $24.8 million. Wardhana has been named a suspect in a $170 million bank loan scam. (Yahoo News (AP & Dow Jones), Mar. 31, 2001, summary by Marg Reynolds).
PRESIDENT DENIES CORRUPTION CHARGES BEFORE PARLIAMENT. Adurrahman Wahid, President, may pave the way for legislators to open impeachment proceedings by his denial before parliament of corruption charges and questioning of his involvement in two multi-million dollar scandals. Lawmakers’ rejection of Wahid’s response a second time may initiate impeachment proceedings. The inquiries involve a $4 million illegal transfer from the state food agency and non-declaration of a $2 million aid donation from Sultan Hasanal Bolkiah, ruler of Brunei. Magawati Sukarnoputri would be his likely successor as he has been criticized for failure to curb corruption, prosecute former key government figures, reform the economy, or stop outbreaks of ethnic violence. (Yahoo News (AP), Mar. 28, 2001, summary by Marg Reynolds).
PRESIDENT TO FIGHT IMPEACHMENT ATTEMPTS President Abdurrahman Wahid stated possible future impeachment attempts by rival political parties over two financial scandals as being unconstitutional. Despite personal ill health, national economic gloom, ethnic and separatist fighting, and increasing reliance on Vice President Magawati Sukarnoputri, ex-President Sukarno’s daughter, Wahid is determined to stay in power and claims treason is the only reason for impeachment according to the constitution. Yahoo News (AP), Mar. 20, 2001, summary by Marg Reynolds).
RIVAL STUDENTS FIGHT IN INDONESIA AS LEGISLATORS SEEK TO IMPEACH PRESIDENT President Abdurrahman Wahid, together with aides and about 100 politicians and associates, has been accused by legislators of corruption in the transfer of $300,000 for last minute expenses during a pilgrimage to Mecca. Student protestors have demanded his resignation after his implication in two multi million dollar corruption scandals, and have also urged Vice President Megawati Sukarnoputri to convene a special session of legislature to impeach the President. Wahid has been criticized for traveling to Mecca when an outbreak of ethnic violence on Borneo left 450 people dead and tens of thousands being forced to evacuate their homes. (Yahoo news (AP), Mar. 14, 2001, summary by Marg Reynolds).
PRESIDENT’S DAUGHTER QUESTIONED OVER MULTI-MILLION DOLLAR CORRUPTION Siti Hardiyanti Rukman, daughter of former President Suharto, has been questioned by prosecutors regarding allegations that one of her companies grossly overcharged for an unfinished pipeline project. Rukamn denied wrongdoing to the state-owned oil company in the multi-million dollar corruption case. (ABC News Online, Feb. 26, 2001, summary by Marg Reynolds).
TENSION RISES AS INDONESIA’S WAHID READIES TO LEAVE. Abdurrahman Wahid, President and also muslim cleric, has been rebuked by his increasingly vocal opponents for his role in two financial scandals that may pave the way for his impeachment. However, Wahid supporters recently demanded the resignation of Akbar Tandjung, the head of ex-President Suharto’s former ruling Golkar Party. Amidst the ethnic violence, political scandals, and economic gloom, President Wahid prepared to leave for his latest overseas tour. Indonesian politicians are so focused on internal bickering that agreements with the IMF and dealings with the Paris Club of official creditors to restructure huge debts may not take effect. (Yahoo News, AP, Feb. 21, 2001, summary by Marg Reynolds).
BANK DENIES REPORTS THAT 2 GOVERNORS NAMED AS SUSPECTS. Bank Indonesia said that they have summoned two deputy governors only as witnesses in the investigation of the emergency fund disbursements. (WSJ, Feburary 2001, summary by B. Gray).
ANOTHER SON OF SUHARTO FACES CORRUPTION CHARGE. Mr. Sigit Harjojudanto, son of former Indonesian President Suharto was questioned for his alleged involvement in marking up the cost of an oil refinery in West Java. The gas company, Pertamina built the refinery at a cost of US$2.45 billion although it was believed the real cost was US$1.6 billion.(Asia News Network, AFP, February 16,2001, summary by B. Gray).
OLYMPICS-IOC ETHICS COMMISSION TO PROBE HASAN. Mohamad ``Bob'' Hasan, 70, is an Indonesian timber tycoon, sports official and a close ally of former President Suharto. Mr. Hasan was jailed last week for two years for corruption (He caused $240 million in losses to the country for failing to carry out a major forestry mapping project). Mr. Hasan is now to be investigated by the International Olympic Committee (IOC) ethics commission. This independent ethics commission was set up after the Salt Lake City bribery scandal, which erupted in 1998, the biggest bribery scandal in the history of the Olympic movement. (Source: Reuters, February 6, 2001, summary by Pavlidis George).
Indonesia's timber tycoon Mohamad "Bob" Hasan has been sentenced to two years' jail for corruption. The verdict was pronounced by Chief judge Soebardi after a marathon session at the Central Jakarta Court.This is the very first graft verdict against one of former President Suharto's business cronies. Hasan, 70, a close friend and golfing mate of Suharto, has expressed his desire to appeal. He is being tried for allegedly causing US$240m in losses to the country for failing to carry out a major forestry mapping project.The tycoon had pleaded not guilty during the trial, which began in September. (Channelnewsasia, Feb 2 2001, summary by Lu C. L.)
JAKARTA Incumbent President Adurrahman Wahid has just issued his third apology to the nation since having taken over the Presidency. He also pledged to co-operate with parliament. All these conciliatory moves took place after the House issued a swift formal rebuke against the President’s alleged involvement in 2 multi-million dollar scandals. Despite this allegation, Mr Abdurrahman restated his refusal to quit, sparking off a mass student-led march on early Friday evening to demand otherwise. Mr Abdurrahman’s gesture of apology is noted to be reflective of his fighting spirit, which signals that he will put up a fierce fight to retain his presidency. To prove that the Cabinet would not block any further investigations, Justice Minister Yusril Ihza Mahendra told the prosecutors to go ahead with the parliament’s order to probe the president over his alleged participation in these corruption schemes, worth a total of US $6.1 million. However, police have previously cleared the beleaguered president of any wrong-doing. The People’s Consultative Assembly (MPR), the head of the state’s top legislative body, on the other hand, wants to push through Mr Abdurrahman’s sacking as quickly as possible. MPR speaker Amien Rais said that the typically slow process of calling a special session should be sidestepped to avoid delay and instability after the censure. Parliament speaker Akbar Tandjung had similar advice: he urged the president to yield to the investigators’ probings. (Channelnewsasia, Feb 2, 2001, summary by Lu C. L.)
LOCAL GOVERNANCE THREATENED BY CORRUPTION. Andi Mallarangeng, consultant to the U.N. Development Program, stated regional autonomy is vital but that local authorities and government ministers are ill-prepared for this operation. The corrupt officials have caused a delay of a $400 million loan from the IMF, and also doubts regarding continuation of resource exploration. Pilot projects in concessions in the multi-billion dollar timber industry have been plagued by corrupt practices. (Sydney Morning Herald, Jan. 2, 2001, summary by Marg Reynolds).
The State Auditor has alleged Bank Indonesia corrupt for mishandling nearly $15 billion U.S. during the Asian financial crisis. President Abdurrahman Wahid’s government, in power since last October, has failed to stem corruption or religious, ethnic or separatist conflicts. (FT, Nov. 20, 2000, summary by Marg Reynolds)
JAKARTA– The governor of Indonesia’s central bank, Sjahril Sabirin, has returned to work after a seven months in detention due to his suspected role in a multi-million bank corruption scandal involving the transfer of $80 million from the insolvent Bank of Bali to a company closely linked to then president Habibie’s party. Mr. Sabirin was released from house arrest due to lack of evidence, but he is still a suspect in ongoing investigations (The Times of India Online, Dec 7. 2000, Summary by Fabian Camacho).
LEADERSHIP MUST PROJECT IMAGE THAT CORRUPTION IS NO LONGER TOLERATED. Indonesia's new leadership must show that it is clean and serious against corruption, according to Rachel Ehrenfeld, director of the Center for the Study for Corruption and the Rule of Law in New York. In a Washington Times op-ed, Ehrenfeld notes that while US ambassador to Indonesia, Robert S. Gelbard, has helped mobilize the Indonesian government to reform its political and economic system, his efforts have always been met with objections. The government debt this year is 99 percent of GDP, according to Indonesia's finance minister. Before the financial in 1997, its debt-to-GDP ratio averaged 23 percent, according to the World Bank. Ehrenfeld concludes that political will and stability are necessary for reforms. (World Bank Development News, 10 November 2000, summary by Debbie Uy).
Corporate Governance: Wall Street Journal, Nov. 8, 2000 (Front page sec. C) notes that this country is among the lowest ten in corporate governance by CLSA, Salomon Smith Barney. This means that shareholders do not get equitable treatment and disclosed information can be false and misleading. The laws governing duties of managers, accountants, etc. are inadequate or not enforced properly.
JAKARTA - Indonesian police have formed a special team in yet another attempt to apprehend Tommy Suharto, son of the former president Suharto who has been a fugitive for about three months after failing to turn himself in to serve an 18 month term for corruption involving a $10.8 million loss to the state through a land scam swap. (The Times of India Online, Summary by Fabian Camacho, Nov 17,2000).
Jakarta - Police have begun searching for Tommy Suharto, son of the former Indonesia president, after he failed to turn himself in before the deadline. Suharto had been sentenced six weeks ago to eighteen months in jail for corruption and according to his lawyer, is hiding after having received death threats. (BBC, November 7,2 000, Summary by Fabian Camacho).
SUHARTO CRONY NAMED SUSPECT IN NEW GRAFT CASE. Mohamad
"Bob" Hasan, a top business crony of ex-dictator Suharto, faces a
second corruption charge after prosecutors declared him a suspect in a case
involving a massive state bailout of several private banks. These banks
became insolvement in the dying months of Suharto's reign. Prosecutors allege
that Indonesia lost $1.3 billion after the central bank lent to Hasan's Bank
Umum Nasional. The borrowed money was never repaid but was allegedly used for
Hasan's business empire. (The Times of India, 24 October 2000,
JAKARTA - Ex-President Suharto's youngest son, Hutomo "Tommy" Mandala Putra, is being investigated by state prosecutors on recent corruption charges. Three helicopters leased by Indonesia's foreign ministry to his air service company have been confiscated and more seizures are planned due to alleged improprieties in the leasing contract. Mr. Putra has also been sentenced to a 18-month jail term due to a separate multi-million land scam. (Times of India Online, October 12, 2000 Summary by Fabian Camacho).
Jakarta, SUHARTO´S SON SENTENCED OVER CORRUPTION. Hutomo "Tommy" Mandala Putra is the youngest son of former president Suharto and the first member of Suharto's family that has been convicted for corruption. The Supreme Court overturned an earlier verdict and found him guilty of corruption in a land deal, sentencing him to 18 months in jail. According to local media, the specific land deal caused losses to the state of around $10.9 million. Tommy's lawyers now prepare to appeal the decision. Tommy was a part of a clan of family, friends and associates of Mr Suharto that accumulated huge fortunes during the 32-year rule of the former autocrat. (Source:Financial Times, September 27, 2000, summary by Pavlidis George).
JAKARTA, Indonesia Arrests 25 People Suspected In Recent Bombing Attacks in Capital including a blast at the Jakarta Stock Exchange that killed 15. One suspect, armed with a grenade, was to attack Jakarta's U.S. Embassy and a nearby crowded department store, said Brig. Gen. Dadang Garnida, who heads the police information department. The detainees are from the northwestern province of Aceh, site of years of bloody fighting between separatist guerrillas and Indonesian troops. The arrests came one day after President Abdurrahman Wahid installed a new national police chief. No military or police personnel are among the 25. (WSJournal, Business and Finance – Asia, September 24, 2000).
Jakarta, SUHARTO CORRUPTION CASE DISMISSED ON MEDICAL GROUNDS, On September 28, the multi-million-dollar corruption case against Suharto was dismissed and the former Indonesian president was released from house arrest. An independent team of doctors had pronounced him "permanently unfit" for facing trial. Suharto was accused of funneling millions of US dollars from tax-free charity foundations he ran into the businesses of family and friends. The head of the state prosecutors' team Muchtar Arifin immediately appealed the verdict of the court. (Source: YAHOO NEWS-Asian Pulse, August 29, 2000, summary by Pavlidis George).
JAKARTA - In a setback to Indonesia's anti-corruption efforts, Mr. Djoko Tandra, one of the defendants in a corruption trial related to the notorious Bank Bali scandal, has been acquitted due to lack of sufficient evidence. The scandal centers on the transfer of $65m from the Bank of Mali to the EGP (Era Giat Prima) finance firm as a "collection fee". An audit by the PwC later determined the money had been channeled to individuals linked to the then ruling Golkar party, and the media has reported the money was used to finance the re-election of president Habibie. (Financial Times, August 28,2000, Summary: Fabian Camacho).
JAKARTA(KYODO), Japan Aid Tied To Embezzlement. The Asahan Development Authority, the supervisory body of the Japanese government-funded power plant and aluminum project in Indonesia's North Sumatra province, made donations in the late 1980's to Yayasan Supersemar, one of the charitable foundations from which former president Suharto has been charged with embezzlement. Reports of these donations, which totaled 874 million rupiah (currently $106,000), were among the prosecution dossiers submitted to the district court in Jakarta, in advance of Suharto's trial, which begins August 31. (Japan Times, 24 August 2000, Summary by K. Werkhoven ).
Jakarta.--Indonesian Prosecutors Formally Charge Former President Suharto With Corruption--for diverting $570 million in state funds and plan to take him to court within days. Mr. Suharto, 79 years old, has been accused of siphoning off millions of dollars raised by seven charitable foundations under his control during his 32-year reign. He was forced to quit after riots in May 1998, has denied any wrongdoing. The case is seen as a test of Indonesia's resolve to roll back years of corruption and push ahead with democratic reforms. (August 3, 2000, Associated Press, summary by Rujuta Vinod)
Former premier Suharto will be investigated for alleged channeling of more than a billion dollars. Bank Negara executives face charges (WSJ, Dec. 1, 1999, p. A23), Suharto named (NYT, Feb. 11, 2000, p A1 and A12)
Practice of Bribery. Corruption as an obstacle to economic growth in Indonesia
· Berita Indonesia - current Indonesian affairs.
· Celoteh.com - bimonthly Indonesian
· Indonesia Weekly - Indonesian political and economical news.
· Inside Indonesia - quarterly magazine
President Wahid said that he will pardon former president, vice president, and army chief since their crimes were political acts. (NYT, Feb 22, 2000, p. A6)
Mr. Djoko Tjandra is the head of a finance found to have transferred $7.3 million out of PT Bank Bali into the accounts of senior officials of former President B. J. Habibi’s government and political party. An audit by PricewaterhoueseCoopers completed in Spet. 1999 had found several irregularities. Yet, the judge R. Sunarto dropped the charges against Mr. Djoko on technical grounds. Chirul Iman, the Indonesian attorney general indicated that there is plenty of evidence. IMF also wants to see prosecutions and Bank Bali case. Yet, there was a release. (WSJ, march 7, 2000, p. A21)
Mohamad Hasan (Bob), a longtime golfing buddy of Suharto and timber tycoon was arrested on allegations that he defrauded state of billions through a forest mapping company PT Mapindo. Cheraul Iman is the head of investigations at attorney general office. (WSJ, Mar. 29, 2K, p. A19).
Suharto’s son Bambang Trihatmodjo was questioned in a case involving corruption at charitable trusts he administered (NYT, Apr. 20, 2K, p. A6).
Indonesian President Facing Coalition Anger Over Mins Sackings of restructuring the moribund and corrupt financial system. See item 6
Fired Indonesian Minister Denies Corruption Allegations. See item 12 (April 28, 2000 Dow Jones Newswires)
Indonesia To Present New Oil, Electricity Law In June. (See item 4, May 2, 2000 Dow Jones Newswires)
Jakarta (AP) Indonesian President Facing Coalition, anger over two key financial ministers in charge of restructuring the moribund and corrupt financial system. (D.J. Newswire, June 6, 2000).
Jakarta, Fired Indonesian Minister Laksamana Sukardi Denies Allegations of Corruption along with collusion and nepotism who was accused by President Abdurrahman Wahid.( D.J. Newswire, June 28, 2000).
Jakarta, Since joining the Cabinet, Yudhoyono has pledged to stamp out the corruption, collusion and nepotism that has dogged Pertamina for years. (D J Newswires, May 2, 2000)
Jakarta, Econ Adviser Salim deflected reports of corruption by members of Wahid's inner circle by saying Wahid wasn't looking for personal gain, but may instead be seeking funds for future political campaigning. Wahid has denied the accusations.( DJN, May 17, 2000)
Jakarta, Specific allegations have been aired about a missingIDR35 billion from Bulog, the rice-distribution agency. Press reports have also hinted at corruption within Wahid's family. Wahid firmly denies these allegations.( DJN, May 17, 2000).
Jakarta.--Indonesian Prosecutors Formally Charge Former President Suharto With Corruption--for diverting $570 million in state funds and plan to take him to court within days. Mr. Suharto, 79 years old, has been accused of siphoning off millions of dollars raised by seven charitable foundations under his control during his 32-year reign. He was forced to quit after riots in May 1998, has denied any wrongdoing. The case is seen as a test of Indonesia's resolve to roll back years of corruption and push ahead with democratic reforms. (Business and Finance - Asia, August 3, 2000, Associated Press, summary by Rujuta Vinod).
INDONESIA: 42 BANKERS TO BE QUESTIONED IN CENTRAL BANK SCANDAL
Voila (AFP), August 21, 2000
INDONESIA: JUDGES NAMED AS SUSPECTS IN GRAFT PROBE-REPORT
YAHOO NEWS, August 22, 2000
INDONESIA: PROSECUTOR CHARGES FORMER PRESIDENT SUHARTO WITH TAKING $157 MILLION TROUGH CHARITABLE FOUNDATIONS STORY FROM ANANOVA: Former Indonesian President Suharto will be charged with corruption in causing more than £100 million in losses to the state. A spokesman for the Attorney General´s Office, Antasari Ashar, said the process of investigation of Suharto has been finalised. The dossiers will now be handed over to the Higher Prosecution Office. Ashar said Suharto would be charged with violating an anti-corruption law issued in 1971. Suharto is accused of enriching himself or other people in his capacity as chairman of several charitable foundations. "He is suspected of having caused a total loss of 1.4 trillion rupiah (£100 million) to the state," Ashar told reporters after meeting with Attorney General Marzuki Darusman and a team of government lawyers. Suharto, 79, has been accused of misusing millions in dollars raised by seven charitable foundations under his control. The ailing former dictator, who had ruled for more than three decades before being forced to quit in May 1998, has denied any wrongdoing. His family and lawyers maintain he is too weak after suffering a series of strokes to face trial. Ris Pandapotan Sihombing, a senior prosecutor and chief of the investigating team, said Suharto is being charged in his capacity as chairman of the foundations and not as then-president. Ashar said Suharto would probably be tried at the South Jakarta district court because most of witnesses and evidences are located in the southern part of the capital. Earlier this year, Darusman placed Suharto under house arrest, accusing the former president of not cooperating with the investigation. Last week, prosecutors impounded a 12-floor office building owned by Suharto´s foundations and confiscated a mansion belonging to a Suharto crony, Zahid Husein, the former treasurer of one of the foundations. STORY FROM WASHINGTON POST: Indonesia´s attorney general filed corruption charges against former President Suharto today, accusing him of skimming $157 million from seven charitable foundations he controlled during his 23 years of rule in Jakarta. The effort to prosecute the ailing former dictator is the strongest sign yet that the country´s new democratic government is serious about addressing the graft and human-rights abuses that defined the Suharto era and forging a new civil society based on the rule of law. Suharto, who was forced to resign in 1998 as the Asian financial crisis spawnedsocial chaos in Indonesia, is alleged to have amassed billions of dollars in illegal wealth for himself, his children and his business associates as he transformed the vast archipelago from a backwater to one of Asia´s fastest-growing economies. Officials in the attorney general´s office expect Suharto to be formally indicted sometime next month, after trial-court prosecutors review the documents and submit them to a judge. However, it is unclear whether the former president actually will see the inside of a courtroom, and he almost certainly will never be placed in a jail cell. Suharto, 79, who has been under house arrest for the past two months, has suffered two strokes and his attorneys say he is unfit to stand trial or be questioned by prosecutors. Even if he is tried and convicted, President Abdurrahman Wahid has promised to pardon him if he apologizes and returns ill-gotten money. Wahid has said he is determined "to make national reconciliation a priority for the nation." The former president and his family have long denied allegations of corruption, insisting they are being pursued by prosecutors because of political vendettas. "The [attorney general´s] office has raped Suharto´s rights," Suharto´s lawyer, Juan Felix Tampubolon, told Reuters news agency today. "They prefer to put political needs above the supremacy of the law." Wahid is scheduled to deliver his state-of-the-nation speech during a special parliament session next month. Several legislators have criticized Wahid´s administration for not moving more quickly and aggressively in the investigation of Suharto. Student protesters also have voiced the same complaint. Hundreds of demonstrators have surrounded Suharto´s home in the past few months, calling for the former president to be jailed or hanged. The charges also come as former political figures, businessmen and military officers still loyal to the former autocrat are alleged to be secretly funneling arms and money to Islamic fighters in the strife-torn Moluccas islands, where they have been largely responsible for a recent escalation in sectarian violence. Officials loyal to Wahid contend that the support of the Islamic fighters is part of a campaign by Suharto loyalists to undermine Wahid. The attorney general, Marzuki Darusman, who is a member of Suharto´s Golkar political party, has maintained that the months-long investigation was not influenced by politics or a desire for retribution. "We are only looking at the evidence and the law," Marzuki said in a recent interview. Marzuki, whose office began seizing Suharto´s assts a few weeks ago, said the $157 million corruption case is not meant to identify all of the former president´s money. "We´re charging Suharto for corruption," Marzuki said today. "We are not addressing the scale of the money that may have been channeled elsewhere." The attorney general expressed confidence that the trial-court prosecutors would approve the documents and submit them to a Jakarta court in early August. However, a member of Suharto´s legal team, Mohamad Assegaf, argued that his client is too sick to be taken to court. "There is slowness in recalling things, difficulty in communicating and explaining his thoughts," Assegaf said. "Such an ill person should not be brought to trial." Although officials in the attorney general´s office acknowledge that Suharto has answered questions during interrogation sessions in simple sentences, they insisted the ex-president is fit enough face a trial. Ananova and Washington Post, July 26, 2000 http://www.ananova.com/news/story/world_indonesia-president-suharto_919166.html (Sumamry by R. Virkar).
The Index of Economic Freedom (by Driscoll-Holmes-Kirkpatrick) for 2001 places Indonesia in the “Mostly Unfree” category with a rank of 116 (Ranks range from 1 for Hong Kong to 155 for North Korea, Wall Street Journal, Nov. 1, 2000). H. D. Vinod’s trimmed correlation analysis indicates that countries free from economic regulation are less corrupt. After allowing for some exceptions by 20% trimming, the correlation is near 0.9.
Design: Theo den Brinker
Hrishikesh D. Vinod 2000