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Cablegate: Anti-Corruption Commission Leading Indonesian Reform

VZCZCXRO4220
RR RUEHCHI RUEHCN RUEHDT RUEHHM
DE RUEHJA #3134/01 3170205
ZNR UUUUU ZZH
R 130205Z NOV 07
FM AMEMBASSY JAKARTA
TO RUEHC/SECSTATE WASHDC 7009
INFO RUEAWJB/DEPT OF JUSTICE WASHDC
RUEATRS/DEPT OF TREASURY WASHDC
RUEHZS/ASSOCIATION OF SOUTHEAST ASIAN NATIONS
RUEHLMC/MILLENNIUM CHALLENGE CORP WASHINGTON DC
RUCPDOC/DEPT OF COMMERCE WASHDC
RUEHKO/AMEMBASSY TOKYO 1092
RUEHBJ/AMEMBASSY BEIJING 4466
RUEHBY/AMEMBASSY CANBERRA 1530
RUEHUL/AMEMBASSY SEOUL 4282
RUEAIIA/CIA WASHDC

UNCLAS SECTION 01 OF 02 JAKARTA 003134

SIPDIS

DEPT FOR U/S JEFFERY, EEB A/S SULLIVAN, DEPT FOR EAP DAS MARCIEL,EEB
DAS DIBBLE
DEPT FOR EAP/MTS, EEB/IFD/OIA, INL BOULDIN
L/LEI FOR BUCHHOLZ
DOJ FOR CRIM AAG SWARTZ
DOJ/OIA FOR WARNER/ROBINSON
DOJ/OPDAT FOR ALEXANDRE/LEHMANN/JOHNSON
DOJ/AFMLS FOR SAMUEL
MCC FOR AMBASSADOR DANILOVICH AND MORFORD
DEPT PASS USTR FOR AMBASSADOR SCHWAB
TREASURY FOR IA - A/S LOWERY
USAID FOR ANE/AA WARD

SENSITIVE
SIPDIS

E.O. 12958: N/A
TAGS: PGOV KMCA KCOR ECON KJUS ID
SUBJECT: ANTI-CORRUPTION COMMISSION LEADING INDONESIAN REFORM
MOVEMENT

REF: A) JAKARTA 2753 - Judicial Comm Irawady case; B) JAKARTA 2610 -

U/S Jeffery Meeting with KPK; C) JAKARTA 2864 - Audit Board update;
D) JAKARTA 2464 - Anti-Corruption Court Update

JAKARTA 00003134 001.2 OF 002


1. (SBU) Summary: The Corruption Eradication Commission (KPK) leads
the anti-corruption movement in Indonesia through its high-level
investigations, vigorous prosecutions, and highly respected
reform-minded leadership. Our legal, law enforcement, and NGO
contacts broadly agree that the KPK's leadership is cause for
optimism within the anti-corruption and broader governance reform
agendas in Indonesia. The KPK continues to demonstrate its success
by prosecuting six "big fish" in 2007. The KPK is further
institutionalizing its role in anti-corruption reform by increasing
case loads through expanded personnel levels. The KPK is
implementing a long-term strategy that balances prevention and
prosecution. While institutional and bureaucratic forces challenge
its expanded profile, the KPK continues to achieve results, charting
a strategic direction for anti-corruption reform in Indonesia. End
Summary.

High-Profile Cases Highlight KPK Success
----------------------------------------

2. (U) The KPK is an independent government institution with a
well-deserved reputation for effectiveness. As of October 2007, the
KPK successfully executed 21 cases. Six cases in 2007 involved "big
fish," or high-level government officials, according to Acting KPK
Secretary General Syamsa Ardisasmita. The KPK prosecuted the

SIPDIS
Governor of South Kalimantan, two mayors (Kendal, Kutai
Kartanegara), the former Minister of Oceans and Fisheries, a former
Secretary General in the Law and Human Rights Ministry, and a

SIPDIS
Ministry of Foreign Affairs official. The KPK also won cases
involving bribery scandals at the Supreme Court. The KPK is
currently prosecuting a senior Judicial Commission official (ref A).
These "big fish" cases are symbolically and substantively important
and spotlight Indonesia's robust anti-corruption efforts.

3. (SBU) KPK officials noted that these successful prosecutions have
returned Rp 50 billion ($5.6 million; Rp 9,000/USD) to the
government. The estimated potential return including pending cases
totals Rp 98 billion ($10.9 million). These numbers are small
compared to the Rp 36 trillion ($4 billion) the GOI loses annually
due to public procurement corruption, according to KPK chairman
Taufiequrachman Ruki.

KPK Capacity Continuing to Increase
-----------------------------------

4. (U) The KPK has fully carried out 39 cases since its founding in
2004. It has steadily increased its case loads from no cases in
2004 to four cases in 2005, 14 in 2006, and 21 in 2007 (through
August). The KPK has similarly increased its investigations.
Through August 2007, the KPK has increased initial preliminary
investigations to 59, compared to 36 in 2006. Regarding full
investigations, the KPK has conducted 25 through August 2007,
compared to 28 in all of 2007.

5. (U) Increased personnel explain the rising tempo of operations.
The KPK has more than quadrupled the number of investigative
personnel and doubled the number of prosecutors since 2004. The KPK
now has 85 investigators and 20 prosecutors. KPK leadership tell us
they will prioritize further personnel increases in their budget to
continue to increase their overall capacity. The KPK has also moved
into its permanent headquarters, increasing its physical capacity
and symbolic prominence with its location on Jakarta's main
thoroughfare.

Corruption Prevention as the Long-Term Solution

JAKARTA 00003134 002.2 OF 002


--------------------------------------------- --

6. (SBU) The KPK will focus 40% of its resources on prevention and
60% on prosecution, according to Ardisasmita. KPK Commissioner
Amien Sunaryadi has also told us that the KPK seeks to improve its
programming for prevention: he views prevention as the longer-term
solution for anti-corruption reform. To increase prevention
efforts, the KPK is leading broader civil service, procurement, and
judicial reform initiatives. Supreme Court reform is also a high
priority, according to KPK Deputy for Prevention Waluyo. The KPK is
partnering with other reformers, such as Finance Minister Sri
Mulyani, to address broader judicial and civil service reform. Sri
Mulyani has made great progress with Finance Ministry reform,
removing notoriously corrupt Directors General of Tax and Customs.


7. (SBU) Two core KPK functions are supervision and coordination of
anti-corruption cases (ref B). The KPK is responsible for
supervising and coordinating anti-corruption cases with relevant
government entities. The KPK noted 22 cases for which it has played
a supervisory role and 66 cases as coordinator. KPK contacts tell
us they seek closer, more efficient cooperation with the Attorney
General's Office and Police, two key anti-corruption reform actors.
The independent standing and clean reputation of the KPK allow it to
be a strong leader of the Indonesian anti-corruption reform
movement, according to a majority of our contacts.

The Long, Slow Road to Revolutionary Reform
-------------------------------------------

8. (SBU) Challenges remain for the KPK. The courts have reduced
KPK-recommended penalties in some high-profile cases. The KPK
sought a seven-year sentence for East Kalimantan Governor Suwarna,
but the Anti-Corruption Court (ACC) only levied 18 months. Legal
contacts tell us that KPK successes must also be placed in
perspective. It has a 100% conviction record, but has only brought
39 cases to trial. The KPK hs recovered $5.6 million in losses to
the state, a frac o* f the millons of dollars of ill-gotten gains
reported by th BPK (Ref C). The uncertain future of the ACC
jeopardizes the KPK's future, too. (Ref D).

Comment: KPK Institutionalizing Its Leadership
--------------------------------------------- -

9. (SBU) The KPK is institutionalizing its role in anti-corruption
reform through its increased personnel, larger case load, and strong
mandate. The KPK's successful prosecution of six "big fish" in 2007
is symbolic of its continued progress. Our legal, law enforcement,
and NGO contacts broadly agree that the KPK's leadership is cause
for optimism within the anti-corruption and broader governance
reform agendas in Indonesia. End Comment

HUME

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