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OO RUEHCHI RUEHCN RUEHDT RUEHHM
DE RUEHJA #0030/01 0081030
ZNR UUUUU ZZH
O 081030Z JAN 09
FM AMEMBASSY JAKARTA
TO RUEHC/SECSTATE WASHDC IMMEDIATE 1173
INFO RUEHZS/ASSOCIATION OF SOUTHEAST ASIAN NATIONS COLL PRIORITY
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RUEHPT/AMCONSUL PERTH 1396
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RHEFDIA/DIA WASHINGTON DC
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RHHJJPI/USPACOM HONOLULU HI

UNCLAS SECTION 01 OF 02 JAKARTA 000030 
 
SENSITIVE 
SIPDIS 
 
DEPT FOR EAP, EAP/MTS, EAP/MLS, INL 
INL FOR ROESS/CARLON 
DEPT FOR EEB/IFD/OMA 
DOJ/OPDAT FOR ALEXANDRE/BERMAN/JOHNSON 
MCC FOR LONGI 
SINGAPORE FOR BAKER 
TREASURY FOR M.NUGGET AND T. RAND 
NSC FOR E. PHU 
 
E.O. 12958: N/A 
TAGS: PGOV KJUS KCOR ID
SUBJECT: CORRUPTION UPDATE - KEY CONVICTIONS IN BI 
CORRUPTION SCANDAL 
 
REF: A. JAKARTA 00019 
     ¶B. JAKARTA 00004 
     ¶C. 08 JAKARTA 2151 
 
JAKARTA 00000030  001.2 OF 002 
 
 
¶1.  (U) This message is Sensitive but Unclassified--Please 
handle accordingly. 
 
¶2.  (SBU) SUMMARY:  The Anti-Corruption Court sentenced two 
former legislators to prison for their roles in the 2003 Bank 
Indonesia corruption scandal.  So far several high-level GOI 
officials have been convicted for their roles in this case. 
The Attorney General's Office and the Supreme Court are 
filing separate charges against Indonesia Corruption Watch 
for defamation.  Although both institutions have been plagued 
with corruption, they are currently engaged in USG-supported 
modernization and reform programs.  END SUMMARY. 
 
FORMER LEGISLATORS CONVICTED ON CORRUPTION CHARGES 
 
¶3.  (U) On January 8, the Anti-Corruption Court sentenced 
former legislators Hamka Yandhu and Antony Zeidra Abidin to 
prison for their roles in the 2003-2004 Bank Indonesia 
(Central Bank) corruption scandal.  Yandhu was sentenced to 
three years and fined approximately  USD 23,000.  Abidin, who 
was evasive during the trial, was sentenced to four and a 
half years and fined approximately USD 14,000.  The two 
former lawmakers were members of the Indonesian Parliament 
(DPR)'s financial commission responsible for amendments to 
the Bank Indonesia (BI) law and oversaw a dispute between 
Bank Indonesia and the Finance Ministry over how to resolve 
unpaid debts relating to the BI liquidity support scandal. 
 
¶4.  (U)  The ever-widening scandal regarding BI liquidity 
support, commonly known as "BLBI," has led to the conviction 
of several former GOI officials:  former legislators, former 
Bank Indonesia officials, as well as a former prosecutor 
(reftel C). In 2003 and 2004, Yandhu and Abidin are said to 
have channeled between USD 35,000 to USD 116,589 (2003-2004 
dollars) of unlawfully disbursed Indonesian Banking 
Development Foundation (YPPI) funds to 52 former members of 
the national legislature (DPR) and kept approximately USD 3.6 
million for themselves.  The BLBI emergency liquidity credits 
went to commercial banks during the 1997-98 Asian financial 
crisis.  Of the $16 billion in BLBI loans issued after 1997, 
approximately a third were not repaid. 
 
AGO AND SUPREME COURT HIT BACK ON CORRUPTION ALLEGATIONS 
 
¶5.  (U) The Attorney General's Office (AGO) filed a complaint 
for defamation against anti-corruption watchdog, Indonesia 
Corruption Watch (ICW), on January 7.  The AGO filed the 
complaint after a newspaper report, citing ICW as a source, 
alleged the AGO had misappropriated recovered assets from 
corruption cases.  The article highlighted a discrepancy 
between the numbers published by the AGO and those of the 
Supreme Audit Agency.  The AGO explained that the court 
verdicts determined whether the recovered assets were 
returned to the Audit Board or the original owners of the 
funds. 
 
¶6.  (U) The Supreme Court also filed a formal complaint 
against the ICW.  In it, the Supreme Court denied its 
justices had paid USD 1 million to members of the DPR to 
 
JAKARTA 00000030  002.2 OF 002 
 
 
ensure the recent passage of a law extending the retirement 
age of Supreme Court justices from 67 to 70 years of age. 
Saying it had been unfairly singled out amidst a host of such 
accusations, ICW responded that it had received reports 
alleging bribery attempts during the discussion of the bill 
but had not accused Supreme Court justices of passing those 
bribes. 
 
USG-SUPPORTED REFORM 
 
¶7.  (SBU)  Both the AGO and the Supreme Court have been 
criticized for corruption in their ranks.  After the arrest 
in April 2008 and subsequent conviction in the 
Anti-Corruption Court of a former anti-corruption prosecutor 
for his role in the BLBI corruption scandal, the AGO has 
struggled to maintain credibility as an effective 
anti-corruption body (reftel A).  Amidst the swirl of 
corruption allegations, however, USG assistance is quietly 
working to improve these institutions.  USDOJ/OPDAT is 
building the professional capability of the AGO through the 
AGO's Anti-Corruption Task Force and USAID is supporting 
AGO's bureaucratic reform.  MCC assistance is overhauling the 
Supreme Court administration, including the establishment of 
an information desk, a transparency decree, a staffing 
assessment and a complete inventory of court physical assets. 
 This quiet progress is not readily evident to public and 
anti-corruption watchdogs, which readily voice frustration 
with the perceived lack of progress and tend to take their 
allegations directly to the media. 
 
HEFFERN