Indonesia’s Oldest Party Picks a Shakedown Artist

Golkar, Indonesia’s oldest political party, has just elected as its chairman a man who was caught on tape in mid-November attempting to shake down Freeport McMoRan for 20 percent of the US mining giant’s Indonesian shares under a divestment scheme.

He is Setya Novanto, 60, who was driven from the speakership of the House of Representatives because of the scandal. Elected in a vote at 3 am on May 17, his elevation appears to dash any hope for reform of the party, once called one of the world’s most corrupt. The opacity that enmeshes Golkar is emblematic of the opacity of the entire Indonesian political process. Eighteen years after the strongman Suharto was forced to relinquish control of the party he had created, the game continues. The campaign for leadership of the 575 delegates has been the focus widespread bribery.

The shenanigans involving Golkar, which now has jumped ship to support the government of President Joko Widodo from the opposition Red and White Coalition headed by Gerindra leader Prabowo Subianto, strengthen Jokowi’s hand by enlarging his coalition. While some believe that Setya is so corrupt it will be easier for Jokowi to control him, that is hardly an encouraging line of reasoning.

Enthusiastic vote-buying

Golkar held an extraordinary national convention this week in Bali, featuring an amazing episode in which those vying for primacy acknowledged blithely and publicly that the way to success was to buy the votes of a majority of the delegates. Competing teams for eight candidates accused each other of bribing their delegates while at the same time candidates themselves were openly distributing money in the attempt to win sway.

The conclave is attempting to end a bitter leadership feud that has split the party between followers of Vice President Jusuf Kalla, who backed Ade Komarudin, and those of Luhut Panjaitan, the Coordinating Minister for Politics, Law, and Security, who was behind Setya. There are no white knights here. It appears, after the conclusion of the meeting, that Luhut, previously Jokowi’s chief of staff until he was moved to security post, has emerged stronger to Kalla’s disadvantage.

Mining and property tycoon Aburizal Bakrie, who had headed the party since 2009 and presided over its slowly diminishing clout, stepped down in an attempt to heal the split although he retains a powerful position as chairman of the party’s advisory council. Since the height of its sway in 1997, with 325 total seats in the House of Representatives, it now holds only 91 of an expanded 560 seats. “The Golkar Party will cooperate with the government," Setya told a news conference in Bali following the vote. “We will support the government’s programs.”

Saiful Mujani Research and Consulting (SMRC) executive director Djayadi Hanan told the Jakarta Globe the squabble narrowed down to three factors, none of which has anything to do with reform – access to power, financial strength and the personal qualities of each candidate.

Setya the money man

When it comes to financial strength, Setya leaders the pack. In official records, he was listed as the richest candidate, with Rp114.77 billion and U$49,150 million in assets, although that figure is probably very much on the low side. Setya, who became wealthy as a businessman, was driven from the speakership when Sudirman Said, the Energy and Resources Minister who is widely regarded as incorruptible, launched charges in the House Ethics Council alleging the lawmaker invoked the names of Jokowi and Kalla without their knowledge to demand 20 percent of Freeport Indonesia shares that were expected to go on the market as the company begins a forced divestment.

In November, Setya acknowledged meeting with Freeport executives but denied soliciting a bribe. He said he was acting on behalf of the president “for the good of the people.” No criminal charges have been filed and the whole sordid episode appears to have been swept into a corner.

Freeport operates the world’s biggest copper mine and second biggest gold mine in Papua and is poised to invest an additional $18 billion if it receives a contract extension until 2041. However, with the tide running strongly for economic nationalism in Indonesia, it is uncertain if that contract extension will go through. This is despite the fact that the president and Sudirman had seemingly engineered an agreement late last year by negotiating directly with Freeport.

However, political operatives are still fighting for a chance to either extort large amounts of money from the company or possibly grab a controlling interest in the mining asset.

Reformers lose

In fact, Sudirman and former Freeport McMorRan Indonesia CEO Maroef Sjamsoeddin, who made the recording of Setya seeking the bribe, actually seem to have been the losers in the whole affair. Maroef has since left Freeport and Sudirman is said to have lost considerable clout inside the administration, another indication of the futility of trying to clean up Indonesian politics.

Setya made his name in business long before he started his career as lawmaker although not without controversy. In 1999, he was implicated in a scandal involving Bank Bali, which centered on the transfer of Rp546 billion from that bank to PT Era Giat Prima (EGP), a company he controlled, but a court quickly acquitted him of graft charges.

More recently, Setya was been implicated in a number of graft cases handled by the Corruption Eradication Commission (KPK), but his status in those cases has remained as a witness, although court testimonies have confirmed his roles in those cases.