Speaker’s arrest puts Indonesia parliament in graft spotlight

Implicated in five corruption scandals since the 1990s but never convicted, the speaker of Indonesia’s parliament Setya Novanto is a political survivor. Last week Novanto was detained by anti-corruption investigators over the biggest graft scandal to hit Indonesia’s legislature. The 62year-old political powerbroker was defiant, denying any wrongdoing and urging parliament and the political party he leads not to unseat him. His lawyer, Fredrich Yunadi, expressed confidence that Novanto would be cleared. “In every court we always win,” Yunadi told Reuters.

But the latest allegations against Novanto have reinforced the perception among Indonesians that their parliament, long regarded as riddled with entrenched corruption, is a failing institution. Politicians and analysts say that is unlikely to change, whatever the outcome of the case. “Before Setya Novanto, there were many, many MPs who were put in jail and it didn’t have an effect,” said Eva Sundari, a member of parliament from the PDI-P party, which sits in the ruling coalition alongside Novanto’s Golkar.

A Corruption Eradication Commission, known by its Indonesian initials KPK, was established in 2002 after the demise of authoritarian president Suharto. Fiercely independent and able to wiretap suspects without a warrant, it has been a thorn in the side of the country’s establishment. But Bob Lowry, an Indonesia analyst at the Australian Institute of International Affairs, said that - the KPK aside there has never been a systemic approach to tackling corruption that he says runs through all layers of government and politics. “You are not dealing with individuals, you are dealing with an entire structure and culture.” he said.

A bagman, a suicide and a luxury watch Novanto is accused of orchestrating a scheme to plunder $173 million, or almost 40 percent of the entire budget for the project, from a government contract to introduce a national electronic identity card. Novanto denies any wrongdoing, writing a letter to other parliament leaders after he was detained asking them to “give me an opportunity to prove that I wasn’t involved”.

According to an indictment filed against Novanto’s alleged bagman, businessman Andi Agustinus, they stood to be personally enriched to the tune of $42 million. Agustinus has not yet commented on the allegations or entered any plea. He is due to appear in court this week to answer the charges. The rest of the money was funnelled to as many as 60 lawmakers, as well as officials, party chiefs, parliamentary staffers and tenderers, according to the KPK, which alleges some of the cash was brazenly divided up in parliamentary meeting rooms.

In August a witness in the probe, a US-based consultant to a company that won a contract to supply biometric technology for the identity cards - ironically aimed, in part, at curbing graft - shot himself after a stand-off with police in Los Angeles. Before his death, Johannes Marliem told KPK officers about meeting Novanto at his Jakarta home in 2011, according to a declaration to a court in Minnesota by a Federal Bureau of Investigation special agent, at which the parliament speaker negotiated a “discount” under which he and Agustinus would get a 40 percent share of a contract worth more than $50 million.

Marliem is also alleged to have said he had brought Novanto a $135,000 Richard Mille watch and showed the agent a photo of Novanto wearing it. A consummate political operator, Novanto is a key link between parliament and the government of President Joko Widodo, who is expected to seek re-election in 2019, said Hugo Brennan, Asia analyst at risk consultancy Verisk Maplecroft. He gained a measure of international prominence in September 2015 when Donald Trump, then a US presidential candidate, hailed him as “an amazing man” at a news conference in Trump Tower in New York.

Two months later he resigned from the speaker’s post after a recording of a meeting emerged in which he was alleged to have attempted to extort $4 billion of shares from the US mining giant Freeport McMoRan. The case got blanket media coverage and hearings were televised live. Within a year, however, Novanto was speaker again after the Constitutional Court ruled the recording inadmissible.

Money politics Novanto’s detention last week came after months of declining to answer summonses for questioning by the KPK. The allegations have once more gripped Indonesia, with newspaper front pages splashing the story and memes mocking Novanto trending on social media. Indonesia was ranked last year at 90 out of 176 countries on Transparency International’s corruption perception index. The watchdog has singled out parliament as Indonesia’s most corrupt institution, and in July called on President Widodo to protect the KPK against attempts by the legislature to weaken the commission’s powers.

Critics inside and outside the parliament say the root problem is money politics, which is underpinned by an open-ticket electoral system and campaign financing laws. These laws allow only tiny amounts of public funding, and do not require public disclosure of individual donors, which some lawmakers say perpetuates a system of funding from illicit sources and financial patronage for favors. The open-ticket voting system encourages candidates to spread largesse to voters and community leaders and then recoup the expenditure if they reach parliament, says the PDI-P’s Sundari. —Reuters