Indonesia parliament Speaker Setya Novanto resigns over alleged kickbacks

Embattled Indonesian parliament speaker Setya Novanto arrives to face investigation by the House Ethics Council in Jakarta on Dec 7, 2015.
Embattled Indonesian parliament speaker Setya Novanto arrives to face investigation by the House Ethics Council in Jakarta on Dec 7, 2015.PHOTO: AFP

JAKARTA - Indonesia’s embattled parliament Speaker Setya Novanto resigned from his post on Wednesday (Dec 16) amidst allegations of him trying to solicit kickbacks from a United States-based mining firm.

The surprise move came as a parliamentary committee was just hours away from ruling that the Golkar Party politician and leader of the country’s House of Representatives had flouted ethics rules when he tried to elicit billions of dollars worth in kickbacks from Freeport McMoran’s Indonesian subsidiary.

No fewer than 15 members of the 17-strong ethics council (MKD) hearing the case had voted against him before the proceedings was adjourned at 5.30pm yesterday. The remaining two members were scheduled to cast their votes when the hearing resumed at 8pm but news broke on Metro TV minutes later that Mr Setya had sent his resignation letter to the MKD.

Mr Setya could not be reached for comment last night and the council was still deliberating behind closed doors at press time.

Mr Setya was accused of attempting to secure shares worth more than US$1 billion (S$1.4 billion) in Freeport's Indonesian unit in return for helping the miner extend its contract to operate the world's biggest integrated gold mine in Indonesia's Papua province.

He had allegedly tried to secure the kickbacks during a meeting with businessman Muhammad Reza Chalid and Freeport Indonesia chief Maroef Sjamsuddin.

It was during the June 8 meeting, held to discuss Freeport's bid to extend its contract earlier than allowed under Indonesian law, that the names of President Joko Widodo, Vice-President Jusuf Kalla and Coordinating Minister for Political, Legal and Security Affairs Luhut Pandjaitan were dropped by Mr Setya.

The meeting was secretly recorded by Mr Maroef and a transcript of which was presented at the public hearing. The hearing started last Monday to determine if Mr Setya had breached ethics rules.

The transcript has also revealed that Mr Reza and the Speaker had implied that Mr Luhut could help convince the President to agree on an extension for Freeport to continue its operations in Indonesia. This would be in exchange for a 20 per cent stake in Freeport's local unit for Mr Joko and Mr Kalla, according to the transcript.

The scandal came to light after Energy Minister Sudirman Said lodged a complaint against Mr Setya with the ethics committee last month, alleging that the Speaker had used the names of Mr Joko and Mr Kalla to demand a stake in Freeport's Indonesian unit.

The latest developments at the MKD come after concerns earlier in the day that Mr Setya may escape punishment when the ethics council delivers its decision.

This came about after some council members had apparently jumped ship on Tuesday, throwing their support behind the decision to absolve Mr Setya, reported The Jakarta Post.

Sources within the council had said that ahead of the final hearing on Wednesday, Mr Setya could win support from at least 10 council members. And, in the event of a vote, the group could defeat the motion presented by seven other council members.