Indonesia’s political power structure may be set for an earthquake amid revelations that Setya Novanto, the Speaker of the House of Representatives, was caught on tape allegedly seeking to extort shares from the US-based mining giant Freeport McMoRan.
Sudirman Said, the Energy and Resources Minister, who is widely regarded as incorruptible, has launched charges against Setya in the House Ethics Council, alleging the lawmaker invoked the names of Indonesia’s President Joko Widodo and Vice President Jusuf Kalla without their knowledge to demand 20 percent of Freeport shares expected to go on the market as the company begins a forced divestment. The president is said to be outraged at Setya’s purported attempt to use his name during a meeting with Freeport.
Other powerful names being dragged into the allegations include coordinating security minister Luhut Panjaitan, who earlier in the year had a hand in negotiations with Freeport when he was the president’s Chief of Staff but who has since been pushed out of the Freeport matter by Sudirman. In addition, power broker and shadowy businessman Muhammad Reza, a major figure in the oil trading business, was reportedly in the Freeport meeting and his name was raised by Sudirman in the ethics complaint. Luhut’s name was raised by Setya during the meeting, according to a transcript leaked to the media.
The affair seems to expose deep rifts in the cabinet and is being taken by some as a sign of the president consolidating his power over traditional elites. Sudirman is felt to be among the most reform-minded officials in government. It is almost unheard for an Indonesian government official to raise such corruption charges publicly especially against a well-wired politician.
On Tuesday, Setya admitted 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.”
According to sources in Jakarta, elements of the political establishment are angry with Jokowi, as the president is known, for personally negotiating a promise to renew the contract to allow Freeport to continue its operations in Papua past 2021.
The company 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. The deal promised Freeport in a recent letter seemingly cuts political operatives like Setya and others out of the chance to extort large amounts of money from the company or possibly grab a controlling interest in the mining asset. Only Jokowi, energy minister Sudirman and Freeport representatives were said to be in the room to negotiate the promised renewal.
For years, nationalist slogans have been deployed to paint Freeport, the country’s largest taxpayer, as a renegade company out to harm Indonesia.
Already out there
The ethically challenged Setya from the old-line Golkar Party was recently the focus of public criticism after meeting US presidential hopeful Donald Trump in New York in September. At the end of a speech, Trump briefly introduced Setya, asking him what Indonesians thought of him: “Do they like me in Indonesia?” Trump asked. The answer from Setya: “Yes, very much.”
Setya made his name as a successful businessman 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 has 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.
In the latest flap, which grabbed headlines on Tuesday when a transcript of a recording documenting the alleged shakedown found its way into print, the legislator seemingly “requested 11 to 9 percent, saying he would give [11 percent] to the president and 9 percent to the vice president,” Sudirman charged. The bribe attempt reportedly took place over the course of three meetings between the legislator and Freeport executives in June.