Indonesian President Susilo Bambang Yudhoyono has found himself ensnared personally in a major scandal involving quotas on beef imports to the country.
Luthfi Hasan Ishaaq, the former chairman of the Prosperous Justice Party (PKS), has already been arrested in the case and it has tarnished Hilmi Aminuddin, the party’s chief patron, agriculture ministry officials and a variety of others. PKS is the country’s largest Islamic party.
The president’s name surfaced in testimony last week before Jakartas’s anti-corruption court, where an aide to Luthfi is on trial in a wide ranging scandal centering on whether various PKS figures accepted bribes in exchange for raising beef import quotas. In Indonesia’s politicized cabinet system, PKS, which is nominally allied with Yudhoyono, holds the powerful and lucrative agriculture portfolio.
A witness in the trial, Ridwan Hakim, the son of Luthfi, claimed in court last week that a wiretapped conversation he was caught having with the defendant involved a discussion about a man named Sengman, who he alleged was a courier acting on behalf of the president.
The extraordinary thing is that Yudhoyono was mentioned at all. With his term ending in 2014, the president’s lame duck status and a wide-open race for the top job next year are combining to make him vulnerable to such allegations, whether they are true or not.
The court testimony follows the recent arrest of the head of the country’s top oil and gas regulator on bribery charges related to oil imports. That case has already touched senior figures in the powerful energy ministry and led to rumors that Energy Minister Jero Wacik, a close advisor to the president, could himself be named a suspect.
On Friday, the Corruption Eradication Commission (KPK) denied that an investigation was already underway against Jero. Some government insiders, however, expect Jero to be named a suspect eventually.
One senior source said this week that the spreading number of scandals touching figures close to the president is a sign of his weakening power and influence. "This is all about politics. SBY’s enemies are coming after him," said the source.
In addition to the beef and oil cases, the ruling Democratic Party is also enmeshed in corruption trials stemming from kickbacks involving the construction of a sports complex. The party’s former chairman and a former cabinet minister have both been named in that case and will likely stand trial soon.
Certainly there is plenty of politics in the beef quota case. PKS has been trying to raise the profile of political Islam in Indonesia and while it is a relatively minor force at the ballot box it represents a vocal and influential minority in a Muslim-majority country where no politician wants to be seen as "anti-Islam."
Luthfi resigned in February after one of his top aides was found naked in a hotel room with a college girl while accepting a black suitcase stuffed with Rp1 billion ($103,125) in bribes from executives of a meat importer, Indoguna Utama. The scandal has netted other PKS members and officials of the agriculture ministry while rumors persist that Agriculture Minister Suswono, also a PKS member, could eventually be named a suspect.
With many observers seeing food import quotas as little more than opportunities for bribery, on Tuesday the government cited inflationary pressures in dropping beef import quotas completely. The quotas led to a sharp spike in beef prices, which have benefited a small number of local beef producers and spurred the United States to file a complaint with the World Trade Organization over the restrictions.
The government had said repeatedly that the quotas were intended to spur self-sufficiency in beef.
Indoguna Utama was allegedly attempting to buy the influence of lawmakers in charge of the beef quota, KPK Deputy Chairman Bambang Widjojanto told local media at the time of the arrest. The Rp1 billion was reportedly a down payment on a larger bribe expected to total Rp40 billion, an anonymous KPK source told the Jakarta-based Tempo.com.
But while the beef quota scandal has claimed a flock of secondary politicians, it hadn’t touched the president until last week, when a businessman close to SBY was alleged to have delivered Rp40 million to a man alleged to be the Prosperous Justice Party’s chief patron.
The allegation was made during the trial of Ahmad Fathanah, the Luthfi aide, who was caught naked in the hotel room with the money and the coed. Sengman’s name emerged when Hilmi’s son told the Anti-Corruption Court that Sengman was a courier for the president.
That spurred Carrel Ticualu, a former Democratic Party member and attorney, to urge the KPK to thoroughly investigate whether Yudhoyono received money from fixing the beef import quota.
Such a charge against a sitting president in Indonesia would have been unthinkable just months ago.
The charges smack of political calculations and remind some observers of the pursuit of former Finance Minister Sri Mulyani Indrawati over what many considered trumped up charges involving the bailout of a failing bank during the 2008-2009 global credit crisis. Sri Mulyani, considered to be one of the administration’s most incorruptible officials, was forced out of the government and left the country to become a Managing Director of the World Bank.
The man Sri Mulyani and many others blamed for her demise was Aburizal Bakrie, a powerful tycoon who is the chairman of the Golkar Party and is currently running for president. He reportedly was feuding with Sri Mulyani over back taxes.
Bakrie today is one of the major candidates – and a long shot due to his widespread unpopularity – to succeed Yudhoyono. Other leading candidates are Prabowo Subianto, the former son in law of the late strongman Suharto and a controversial former army general, and Joko "Jokowi" Widodo, the extremely popular Jakarta governor who has yet to formally declare his interest in the presidency.
Yudhoyono’s Democratic Party, once the most popular in the country, has been hit by the long series of scandals and it seems unlikely to be able to resurrect its image in time for the next polls.
In the oil and gas regulator case, investigators say they are looking into reports that the bribes were actually intended to finance the Democratic Party’s upcoming nominating convention, which is intended to name a candidate to succeed Yudhoyono in 2014 presidential polls.
Gede Pasek Suardika, a Democratic Party official, defended the president’s innocence, reasoning that if Sengman was a special envoy for the president and his activities, he would have been a member of the party. But he is not, Pasek says.
Pasek claimed he had never heard of Sengman until recently.
Presidential spokesman Julian Aldrin Pasha said the president may have known Sengman, who is said to be an influential businessman in South Sumatra, but denied that he was the president’s representative on any matter.