VZCZCXRO8103
OO RUEHDT RUEHPB
DE RUEHJA #1946 3290850
ZNR UUUUU ZZH
O 250850Z NOV 09
FM AMEMBASSY JAKARTA
TO RUEHC/SECSTATE WASHDC IMMEDIATE 3925
INFO RUCNARF/ASEAN REGIONAL FORUM COLLECTIVE PRIORITY
RHEHNSC/NSC WASHDC PRIORITY
RUEHLMC/MILLENNIUM CHALLENGE CORP PRIORITY 0159
RHMCSUU/FBI WASHINGTON DC PRIORITY
RUEAWJB/DEPT OF JUSTICE WASHDC PRIORITY
RUEAIIA/CIA WASHDC PRIORITY

UNCLAS JAKARTA 001946 
 
SENSITIVE 
SIPDIS 
 
DEPT FOR EAP, EAP/MTS, EAP/MLS, EAP/RSP, E, EEB, INL 
DOJ FOR CRIM AAG SWARTZ, DOJ/OPDAT FOR BERMAN 
NSC FOR D.WALTON; MCC FOR ISMAIL 
 
E.O. 12958: N/A 
TAGS: PGOV ECON KJUS KCOR SNAR ID
SUBJECT: PRESIDENTIAL SPEECH FAILS TO QUELL GROWING CRISIS 
 
REF: A. JAKARTA 1910 
     ¶B. JAKARTA 1862 
     ¶C. JAKARTA 1845 
     ¶D. JAKARTA 1815 
 
¶1. (SBU) SUMMARY:  President Susilo Bambang Yudhoyono failed 
to regain control over two major scandals in his public 
response to a fact-finding team,s recommendations on how to 
proceed.  The team, appointed by Yudhoyono, had recommended 
that the President take clear action regarding police and 
prosecutor malfeasance and growing public criticism over 
possible misallocation of bank recapitalization funds. 
Yudhoyono instead provided vague guidance for the Indonesian 
National Police (INP) and the Attorney General,s Office 
(AGO), effectively throwing the ball back in their court. 
While this speech may have resulted in the transfer of the 
INP,s top detective, Yudhoyono,s remarks left the public 
critical of his leadership and provided no clear end to these 
continuing issues.  The controversies have sidetracked 
Yudhoyono,s plans to use his first 100 days to develop an 
action-oriented program for the next five years.  END SUMMARY 
 
YUDHYONO FAILS TO DELIVER 
 
 
¶2. (U) President Yudhoyono publicly responded November 23 to 
recommendations from his fact-finding team investigating 
potential INP and AGO wrong-doing in charges against two 
suspended Corruption Eradication Commission (KPK) leaders. 
 
¶3. (U) Despite clear recommendations (including the dismissal 
of pending cases against the KPK officials), Yudhoyono 
provided only general guidance.  He stated that he lacked the 
constitutional power to intervene, but suggested that it 
would be  better, if the AGO and the INP dropped charges 
against two suspended KPK commissioners.  He also stated that 
the KPK, INP and AGO need to look at internal reform, but did 
not lay out a concrete plan.    He did announce that he would 
form a special unit under the Presidential Office to 
investigate allegations of rent-seeking behavior on the part 
of middlemen in criminal and civil cases.  He did not address 
a number of specific recommendations. 
 
¶4. (SBU) Yudhoyono also did not directly address growing 
questions of official wrongdoing in handling of funds provide 
to bail out Bank Century, despite the release of an official 
audit earlier that day concluding that some of the bailout 
funds may have been misallocated.  Rumors persist that these 
funds may have been diverted illegally to the Persident,s 
Democratic Party or even to members of his family.   The 
President stated only that any allegations of wrongdoing were 
slanderous and that he would direct his Finance Minister Sri 
Mulyani to provide further clarification on the bailout. 
 
THE CRISIS CONTINUES 
 
¶5. (U) By throwing the ball back to the INP and the AGO, the 
President failed to resolve the ongoing conflict between 
these two agencies and the KPK.  The INP, in turn, tossed the 
ball back to the AGO, stating that investigative dossiers in 
the cases of both commissioners were complete and that it was 
up to the AGO to determine whether or not to take charges to 
trial.  In turn, the AGO was non-committal about a result, 
stating that while they would like to stop charges from going 
forward, it would take a 2-week review to determine whether 
or not the AGO could stop the cases.  The INP did, however, 
act to take sanctions against top detective Susno Duadji by 
transferring him to a non-portfolio advisor position outside 
of the Criminal Investigations Division. 
 
¶6. (U) Public protests criticizing President Yudhoyono,s 
handling of these cases have continued throughout Indonesia. 
While the case surrounding the KPK commissioners may be 
resolved soon, no end is in sight for the Bank Century 
scandal.  In a November 24 speech presidential advisor Dino 
Patti Djalal acknowledged that the scandal surrounding Bank 
Century would pre-occupy the administration,s attention for 
the next six months as Indonesia,s parliament launches a 
formal inquiry of wrongdoing in the Bank Century case. In the 
meantime, President Yudhoyono is unable to focus on the 
development of concrete plans for his new administration. 
HUME