July 18, 2017 12:28 am JST

Indonesian speaker named in massive graft case

Investigators link Setya Novanto to $170m identity card scam

WATARU SUZUKI and ERWIDA MAULIA, Nikkei staff writers

Indonesian House Speaker Setya Novanto © AP

JAKARTA -- Indonesia's Corruption Eradication Commission, a state agency commonly known as KPK, named House Speaker Setya Novanto on Monday as a suspect in a procurement scandal for electronic identity cards that allegedly saw over $170 million embezzled.

Novanto is chairman of Golkar, the second largest party in President Joko Widodo's ruling coalition. The scandal could affect support for the president in his 2019 re-election bid.

KPK has been investigating the case for a number of years, and has already arrested at least three suspects. Their evidence in court has convinced the agency of Novanto's involvement, KPK Chairman Agus Rahardjo told reporters on Monday.

Rahardjo alleged that Novanto as head of the Golkar faction in the house in the 2009-14 parliament collaborated with businessman Andi Agustinus to unlawfully select winners for the procurement of the electronic identity cards, or e-KTP. Agustinus headed the local consortium that won, and has himself testified in court.

"S.N. through A. A. allegedly conditioned participants and winners for the procurement of goods and services for e-KTP," said Rahardjo. "S.N. through A.A. allegedly played roles in both the planning stage and deliberations for the e-KTP procurement budget at the house of representatives."

The alleged scam took place in 2011 and 2012 during the presidency of Susilo Bambang Yudhoyono, and may have cost the state 2.3 trillion rupiah ($172.5 million) in padded procurements.

On Friday last week, KPK investigators questioned Novanto for five hours. He is expected to be questioned further before an arrest warrant is issued. A court hearing the case in March heard that the stolen funds may have been distributed among some 100 people -- half of whom were members of parliament, many still serving. 

The large number of people who could be facing jail terms has caused a backlash. Despite strong public opinion, some lawmakers want a special committee they recently established to investigate KPK officials and their performance.

Novanto is not new to bribery allegations. In 2015, he was forced to resign as speaker of the house amid allegations that he asked for shares in the local subsidiary of U.S. mining company Freeport-McMoRan in exchange for lobbying to extend its contract at a giant copper mine.

Despite that controversy, Novanto was elected chairman of Golkar in May 2016, and reappointed house speaker in later that year. Since then, Novanto has rallied Golkar -- previously part of the opposition -- in support of Widodo. He is on the record promising to back the president in the 2019 election.

Bobby Nugroho in Jakarta contributed to this story

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