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JAKARTA: Indonesia's new government has been badly shaken by a corruption scandal that has exposed fundamental flaws in its commitment to fight graft and damaged investor confidence, analysts said.
Senior police and prosecutors stand accused of trying to frame two investigators from the watchdog Corruption Eradication Commission (KPK) with accepting bribes, in a case that has transfixed the nation for weeks.
It came to a dramatic head Tuesday when a nationally televised court session heard wiretapped recordings of the alleged conspirators plotting bogus criminal charges against KPK officials Chandra Hamzah and Bibit Samad Riyanto.
So damaging was the evidence, and potentially explosive the public anger at the alleged conspiracy, the police had no choice but to cave in and release the two KPK deputy chairmen late Tuesday night.
Analysts said the scandal is proof that President Susilo Bambang Yudhoyono - re-elected in July on pledges of clean-government and economic growth - is at best duplicitous in his much-touted anti-graft campaign.
"He plays a kind of double game," said Indonesia analyst Greg Fealy of the Australian National University's Research School of Pacific and Asian Studies.
"I'm sure there are people around him who would be happy to see the KPK much weakened by this process, certainly people in his party and in the military, across the political spectrum and particularly in parliament."
On one hand the liberal ex-general publicly backs the KPK, which is seen as the only clean institution in the country. On the other he has stood back while senior police and prosecutors have allegedly waged war against it.
"On SYB's part it's probably more a case of timidity than any sort of malign design," Fealy said, using Yudhoyono's nickname.
One of the alleged conspirators in the wiretap recordings refers to "RI-1", a nickname for Yudhoyono, as being a backer of moves to "close down" the KPK, but Yudhoyono angrily denies any involvement.
Even so, the suspected conspiracy against Hamza and Riyanto "implicated Yudhoyono's government", according to Centre for Democracy and Human Rights chief Asmara Nabanan.
“It was heard in the tapes that several officials were involved. It's a tsunami in the legal sector that Yudhoyono has to handle, and he cannot handle this as if it's business as usual," he said.
A page on social networking website Facebook - set up a week ago to demand the release of the two KPK investigators - had attracted some 700,000 members by Wednesday.
Hundreds of people took to the streets of Jakarta and other towns for a second day Tuesday to condemn the police and demand Yudhoyono step in to protect the officials, who still face charges of extortion and abuse of power.
Indonesia consistently ranks among the most corrupt countries in the world but the KPK has claimed a number of high-level scalps since it was set up five years ago, including senior prosecutors and lawmakers.
It has far-reaching powers to wiretap suspects and probe their bank accounts, a powerful weapon that has frightened its enemies and given hope to ordinary Indonesians and foreign investors alike.
Industry Minister Mohammad Suleman Hidayat warned last week that Indonesia's latest corruption scandal could further undermine investor confidence in Southeast Asia's biggest economy.
"This scandal has clearly tarnished our image in the eyes of the international community and humiliated Yudhoyono," Centre for Strategic and International Studies analyst Bantarto Bandoro said.
"A slow response (from Yudhoyono) will worsen the situation and it's not impossible that foreign investors will be reluctant to invest their capital in this country."
- AFP/yb
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