SUMMARY:

On Wednesday, March 25, National Police officially brought corruption charges against former deputy Law and Human Rights minister Denny Indrayana related to the online passport application system’s payment gateway instated during his tenure in government. National Police spokesman Anton Charliyan told media that Denny is suspected of providing the system’s payment vendors, PT Nusa Inti Artha (Doku) and PT Finnet Indonesia, an unfair advantage during the bidding process so that they could enjoy a Rp 5,000 processing fee for each transaction. The police spokesman went on to say that the police were working to establish a financial link between the two firms and Denny’s personal bank account.

The police’s initial inquiry into the matter began in December 2014, based on a Supreme Audit Agency (BPK) report. The inquiry was then elevated to a full investigation on Feb. 10, 2015 – less than a week after Denny criticized police general Budi Gunawan for abusing his authority to silence political opponents. Police have summoned Denny for questioning in connection to the payment gateway on two separate occasions, but prevented his lawyers from accompanying their client in clear violation of the Criminal Law Procedures Code (KUHAP) and internal police regulations. A professor of law at the University of Indonesia, Denny has denied any wrongdoing in the case and has instead claimed that the charges are politically motivated as an act of retaliation for his vocal support of the Corruption Eradication Commission (KPK). Speaking to media, Denny said “We understand this is the risk of struggling for our goal of an Indonesia that is cleaner and free from corruption…The struggle against corruption is indeed difficult, but we will never give up.” Denny is scheduled to undergo questioning as a suspect at National Police headquarters on Friday, March 27.

On Wednesday, March 25, the Attorney General’s Office (AGO) claimed that it had not received the report from the Financial Transaction Reports and Analysis Centre (PPATK) on the suspicious financial transactions linked to police general Budi Gunawan as part of the KPK’s case file. Attorney General H.M. Prasetyo said that his office would not ask the PPATK for a separate copy, since one had already been requested during the KPK’s own investigation.

On Wednesday, March 25, KPK spokesman KPK spokesman Priharsa Nugraha announced the anti-graft agency would question Zulkarnaen Djabar – who formerly served on the House of Representatives’ (DPR) Commission VIII, which oversees religious, social and women’s empowerment affairs – as a witness in its investigation into former Religious Affairs minister Suryadharma Ali. Zulkarnaen, who was previously sentenced to 15 years in prison for corruption related to the printing of the Holy Koran, appeared at KPK headquarters in the morning to answer investigators questions. Suryadharma Ali filed a pre-trial motion to challenge the charges against him. Hearings on the motion are slated to begin on Monday, March 30.

On Wednesday, March 25, interim KPK Chair Taufiqurrahman Ruki announced that the KPK estimated uncollected tax revenues and other state losses topped Rp 38.5 trillion in 2012 in the natural resources sector. The announcement follows last week’s request from President Joko “Jokowi” Widodo for the KPK to play a larger role in combatting corruption in the management of the nation’s natural resources, and the subsequent signing of memoranda of understanding (MoUs) between the KPK and related ministries to prevent graft in the sector.

On Tuesday, March 24, interim KPK Commissioner Johan Budi told participants in a discussion organized by Indonesia Corruption Watch (ICW) that he had no objections to proposed revisions to Government Regulation No. 99/2014, which would place the Law and Human Rights Ministry in charge of administering sentence reductions for convicted criminals, including those convicted of corruption. However, in an important caveat, the anti-graft official said that he supported the proposal so long as it did not ease the conditions for corruptors to apply for early release.  Such a move, Johan said, would represent a significant setback in the fight against corruption. Law and Human Rights Minister Yasonna Laoly drew the ire of anti-corruption activists in recent weeks for his proposal that would reinstate sentence reductions for graft convicts. At yesterday’s discussion, DPR representative Asrul Sani (PPP – Central Java 10) said that Yasonna’s controversial proposal was actually first hatched by a member of the House.

KEY DEVELOPMENTS:

Friday, March 20 – KPK signs MoU with several ministries to examine corruption in natural resources sector

Friday, March 20 – Police indicate Denny Indrayana to be charged imminently

Monday, March 23 – Sutan Bhatoegana’s pre-trial hearing opens, adjourned until April 6

Monday, March 23 – House of Representatives returns from recess

Monday, March 23 – Fuad Amin Imron admits to receiving payments from PT MKS in gas deal

Tuesday, March 24 – KPK questions Fuad Amin Imron as suspect

Tuesday, March 24 – Sumedang District Court strikes down pre-trial motion in goat scam

Wednesday, March 25 – Denny Indrayana charged as corruption suspect

IMPLICATIONS:

The National Police’s decision to charge Denny with corruption represents a significant development in recent political dynamics, and a combination of several factors indicate the case has been trumped up to make a political point. Thus far, the BPK has made no statements to the effect that the passport application system caused state losses or that it recommended further action by law enforcement. The procurement process for the system’s vendors was open and transparent, and six bidders participated. Finally, and most importantly, use of the payment gateway was optional and the old manual process of cash payment was still available while the online option was in operation between July and October 2014. The National Police appear to have sent a political message by having Akhmad Wiyagus, a former KPK investigator who has since returned to duty as a police detective, sign the charges against Denny.

The AGO has noticeably been dragging its feet in the review of Budi Gunawan’s case file that was compiled by the KPK. Since its initial leak, the PPATK report has been widely distributed to media and the agency would surely provide a duplicate copy to the AGO if investigators felt it relevant to the case. The AGO has been transparent about its half-hearted pursuit of money laundering allegations against the police general since it inherited the case, and has at several points, indicated it would turn over the case to the police for further follow-up, in full recognition of the fact that the police’s cursory review of the matter had found no irregularities and would likely result in no criminal charges. That the AGO continues to blame the KPK for missing information or incomplete documentation is regrettable, considering the perceived improvement of relations between the two institutions early in the year.

Despite the upcoming pre-trial hearing, the KPK’s continued pursuit of evidence in its case against Suryadharma Ali is encouraging. A number of political observers initially felt the legal battles facing the KPK might halt its progress in a number of high-profile cases; however the anti-graft agency has shown resilience and resolve in forging ahead.

There is no doubt that a great deal of graft takes place in Indonesia’s environmental and natural resources sector. Decentralization has provided regents and mayors with sweeping power to issue concessions for timber, coal and natural gas yet failed to match those powers with effective oversight or transparency mechanisms. A stronger role for the KPK in this regard, especially with regard to preventative efforts, could be a positive development. However, many worry that President Jokowi’s efforts to push the KPK in this direction could potentially come at the cost of its work in prosecution, especially in the more politically sensitive areas of political parties and the police.

ICW research has shown that sentences for corruption suspects remain relatively weak. Reviewing the 436 corruption convictions in 2014, ICW found that perpetrators were sentenced to an average of two years and eight months in prison.  In addition, ICW’s review found that the majority (77.6 percent) were sentenced to 1-4 years behind bars. A total of 12.5 percent were sentenced to 4-10 years in prison. Less than one percent of cases were given sentences of more than 10 years to life in prison. Further sentence reductions would significantly reduce their indented deterrent effect.

Information as of 5:30 p.m. WIB, March 25, 2015