Indonesia’s Yudhoyono Gets a Black Eye

Indonesia’s voters who swept President Susilo Bambang Yudhoyono into office in 2004 as what they hoped as a clean and transparent leader, are growing increasingly disenchanted with his ability to clean up the country’s endemic corruption.

The latest blow to Yudhoyono’s credibility comes from revelations of illegal funding of the 2004 presidential campaign including the passage of slush funds to at least four campaigns, including Yudhoyono’s own. Critics say it also raises questions whether other ministries maintained similar slush funds, throwing the legitimacy of the entire 2004 campaign open to question.

The president has responded with an impassioned nationally televised speech denying any association with the funds, and threatening defamation suits against his accusers. Later he told a radio station, "Our honesty in recording everything is what caused me to fall into this mess."

The allegations arise from the trial of the former Minister of Maritime Affairs, Rokhmin Dahuri, who is being questioned by the Anti-Corruption Commission for distributing Rp115 billion (US$1.3 million) from his ministry’s non-budgetary fund during former President Megawati Sukarnoputri’s term in office. Dahuri faces up to 20 years in prison if he is convicted.

In addition to channeling funds to Megawati’s campaign, Dahuri later admitted handing out the equivalent of US$2 million to other election campaigns. In his deposition, the former minister said that Megawati, received Rp275 million. Yudhoyono and his running mate, Jusuf Kalla, allegedly received Rp200 million via National Sun Party General Chairman Iman Addaruqutni, while candidates Wiranto and Salahuddin Wahid were reported to have received Rp220 million.

Amien Rais, the former Speaker of the People's Consultative Assembly and former Chairman of the National Mandate Party, was the fourth to be implicated and became the first to own up, acknowledging accepting Rp400 million from the former minister. Amien said he thought the funds were legitimate and didn’t know they had come from the maritime ministry. He defended his actions, but added that Yudhoyono had received funds as well.

Laws passed in 2002 and 2003 stipulate that parties and candidates are prohibited from receiving donations from abroad, the state budget or anonymous sources.

Ali Fachry, chairman of the Institute for the Study and Advancement of Business Ethics, said Yudhoyono’s reputation has been tainted in the eyes of the middle class.

“If the disappointment trickles down to the masses, it could jeopardize his chances of being re-elected in 2009,” he said, referring to the next presidential election.

Indonesia is regularly ranked among the world’s most corrupt countries by Transparency International and cleaning out the ingrained corruption, which reached its height during the 32-year reign of the former strongman Suharto, is proving hugely difficult. While many of the major business cronies who were enriched by Suharto have been neutralized, others have fled the country/ Still others have remain entrenched in the country. The first three post-Suharto presidents B.J. Habibie, Abdurrahman Wahid and Megawati failed to address the issue effectively.

Reformers have been hampered by a largely corrupt legislature and a court system often open to the highest bidder. Yudhoyono, the first directly elected president, has made the fight against graft the main priority of his five-year term. In fairness, the former general has given some strong signals, but critics say that his anti-corruption crusade is skewed against political opponents. For instance, Widjanakaro Puspoyo, the former chairman of Bulog, the graft-riddled National Logistic Agency was arrested recently on corruption charges. Puspoyo is a member of Megawati’s Indonesian Democratic Party of Struggle.

To charges that he has gone easy on Suharto’s clan and the military, Yudhoyono has sought to revitalize his corruption campaign by promoting Attorney General Hendarman Supandji in the latest cabinet reshuffle and by going after Hutomo “Tommy” Mandala, Suharto’s son, who is accused of embezzling billions of dollars during his father’s reign. In May, Supandji ordered lawsuits against several public foundations once chaired by Suharto.

While Yudhoyono’s political opponents and have called for an official investigation of the slush funds, the president himself has refused to order one, saying the financial report from his party's election campaign was submitted to the General Elections Commission, as requested by the law. Yudhoyono’s words have failed to convince critics.

Arif Nur Alam, head of the Forum for Budget Transparency, an organization set up to monitor government spending, added fuel to the fire by telling reporters, “The Dahuri case is just the tip of the iceberg.” He estimates that more than US$7 million is embezzled by Indonesia's main parties each year. The Golkar Party and Megawati’s part allegedly were involved, as was the Democratic Party.

“The money came non-budgetary funds and was given to most parties,” he said.

On the same wavelength, Frenky Simanjuntak from Transparency International Indonesia, the local branch of the global watchdog, said that “ministers' non-budgetary funds are in a grey area and difficult to trace. This is neither normal nor allowed, but I cannot say that it is unusual in Indonesia.”

“If it is proved that Yudhoyono received money in this way, it could be very, very damaging for him. But some damage has already been done, regardless,” he added.