By JOE COCHRANEDEC. 17, 2015
http://www.nytimes.com/2015/12/18/world/asia/indonesia-corruption-setya-novanto.html?_r=0
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JAKARTA, Indonesia — For more than two weeks, Indonesians have been glued to their television sets as one of the biggest political scandals in the country’s history has unfolded before their eyes.
The speaker of the House of Representatives, Setya Novanto, stood accused of trying to extort $4 billion in shares from the local unit of the American mining giant Freeport-McMoRan. The hearings of the House Ethics Council were broadcast live.
Sri Purwanti, 38, a saleswoman at an engineering company, watched the hearings during the day with friends at the office and at home with her husband in the evening.
“Politics is mostly like a soap opera, with so many things going on behind closed doors,” she said. “I can hardly trust any of them.”
The hearings, which ended Wednesday night with Mr. Setya’s forced resignation, may have been Indonesia’s Watergate moment, a combination national civics lesson and possible turning point in the struggle to root out endemic corruption.
There was even a smoking gun: a secretly made 80-minute recording of the speaker apparently soliciting the bribe in exchange for helping the company extend its mining contract. The most damning portions of it were played and replayed for all to hear.
By the time Mr. Setya resigned Wednesday, hours before the Ethics Council voted 15 to 2 to strip him of his post, the biggest surprise was that he had held out this long.
“It was a good decision, even though it was a little bit late,” Vice President Jusuf Kalla said. “It should have been announced last week.”
Still, the public exposure of a case against one of Indonesia’s most powerful men, and his swift fall, were virtually unprecedented in Indonesian politics.
“Only one person fell, so it’s not really a Watergate type of situation, but of course this is going to be viewed that way because through the Parliament and the people, we have a new precedent,” said Philips J. Vermonte, head of the politics and international relations department at the Center for Strategic and International Studies in Jakarta.
“What we’ve seen is that public pressure was very successful in influencing the Ethics Council,” he said, “and because of this public pressure they had no other option but to act.”
Under President Suharto, who by one estimate stole up to $35 billion during his 32-year rule, news coverage was suppressed. News organizations that dared to report on corruption, a system tightly controlled by Suharto’s inner circle, were threatened or shut down.
More than 15 years later, as Indonesia continues its transition toward democracy, news outlets actively covered Mr. Setya’s case, anticorruption demonstrations were held in Jakarta and other cities, and damning comments against the speaker took social media sites by storm.
It was Indonesia’s energy minister, Sudirman Said, who reported Mr. Setya to the Ethics Council and delivered the audio recording. The recording had been made by Maroef Sjamsoeddin, president-director of Freeport Indonesia, during a private meeting last June requested by Mr. Setya.
The speaker was accompanied by Muhammad Reza Chalid, a prominent Indonesian oilman, who has since left the country.
Freeport-McMoRan owns more than 90 percent of its Indonesian unit, which is Indonesia’s biggest taxpayer. The company’s Grasberg mine, in the eastern province of Papua, has the world’s largest gold mine and third-largest copper mine.
Freeport-McMoRan has announced plans for $17 billion in new investment in its Papua operations, but that hinges on its current contract, set to expire in 2021, being extended to 2041.
On the recording, Mr. Setya is heard asking Mr. Maroef for a 20 percent stake in Freeport Indonesia. He claims to be asking on behalf of President Joko Widodo and Vice President Kalla, and promises that the shares, which Freeport-McMoRan is contractually required to eventually divest, are for them.
Mr. Joko and Mr. Kalla have denied knowledge of the apparent extortion attempt, and their statements have been widely accepted by the news media and the public. Moreover, Mr. Setya has no power to renegotiate the mining company’s contract.
Mr. Setya, who cut his political teeth in Suharto’s Golkar party, has been implicated but never prosecuted in several corruption scandals during his public career.
When a transcript of the recording was released last month, he categorically denied trying to extort money. At one point, he told local journalists that he had been “just joking.”
Testifying behind closed doors at the Ethics Council hearings, he again denied the accusation, according to reports by local media.
The denials enraged many Indonesians, especially those who lived through the excesses of the Suharto regime. Mr. Setya is the current treasurer of the Golkar party.
“The point is what the Indonesian people think, and the reaction is repulsion,” said Keith Loveard, head of political risk for Concord Consulting, a security company based in Jakarta.
Parliament will now consider whether to remove him from his seat in Parliament, and he could still face criminal charges. The attorney general’s office is investigating the case.
There is little question that Indonesia has made strides in combating corruption since Suharto’s ouster in 1998, in particular with the creation of the independent Corruption Eradication Commission in 2003.
The agency, known as the K.P.K., has prosecuted and imprisoned more than 400 people for high-level graft. They include dozens of former and sitting members of Parliament, a cabinet minister, the chief justice of the Supreme Court, political party leaders, provincial governors, senior police officials, state prosecutors and prominent businesspeople.
The agency, not surprisingly, has ruffled some feathers, and has occasionally scuffled with the National Police and the attorney general’s office. Senior members of the agency have been arrested and prosecuted on apparently trumped-up charges, anticorruption activists say, in retaliation for its investigations.
The K.P.K. has not begun an investigation against Mr. Setya, with officials saying they are waiting to see if the attorney general’s office will take action.
Despite the agency’s successes, Indonesia still has a long way to go. According to Transparency International’s 2014 Corruption Perception Index, Indonesia ranked 107th out of 175 nations. That ranking was only three spots higher than in 2010.A major remaining issue, analysts say, is the country’s failure to overhaul its political party system and campaign finance laws, which are relatively opaque.
For many, Mr. Setya’s downfall provides a glimmer of hope.
“The fact that a minister would not only catch Setya in the act, but leak the entire proceedings to the authorities, actually shows that despite the constant attacks against the K.P.K., some leading politicians remain committed to the fight against corruption,” said Marcus Mietzner, an associate professor at Australian National University and author of “Money, Power, and Ideology: Political Parties in Post-Authoritarian Indonesia.”
“This fight will continue to be an uphill battle,” he said, “as long as the architecture of Indonesia’s political funding system remains deliberately dysfunctional.”