Sept. 30 (Bloomberg) -- A bill that makes an Indonesian anti-corruption court permanent may weaken President Susilo Bambang Yudhoyono’s drive to end graft because it maintains a system tainted with wrongdoing, Transparency International said.

The Corruption Crimes Court Law, approved late yesterday by Indonesia’s parliament, reverses a rule that mandated most of the Jakarta-based panel’s judges be chosen from independent professions rather than “career” justices who have been in the system for years.

The special court and its partner, the Corruption Eradication Commission, or KPK, were formed by former President Megawati Soekarnoputri as an independent alternative to pursuing cases through Indonesia’s police, prosecutors and district courts. Since Yudhoyono’s election to a first term in 2004, the institutions have convicted legislators, governors, police, former ministers and other officials.

“The Yudhoyono anti-graft campaign hinges on the achievements of the KPK and the corruption court,” Teten Masduki, secretary general of Transparency International’s Indonesian branch, said in an interview today. “If those bodies are weakened, that campaign becomes hollow because there has been little reform in the regular justice system.”

Yudhoyono won a second five-year term in July, partly on his pledge to crack down on corruption and attract investors to Southeast Asia’s biggest economy. While Indonesia’s ranking in Transparency International’s corruption-perception index has improved, it was 126th of out of 180 on the 2008 index, lower than Nigeria and Vietnam.

Sibling Rivalry

Indonesian Corruption Watch, the nation’s leading anti- graft watchdog, said it will file a challenge against the new bill as “it weakens the anti-corruption campaign,” said Febri Diansyah, a legal researcher at ICW.

“The rivalry between the anti-graft bodies and other government agencies is not a secret,” Diansyah said. “It is all out in the open for us to see.”

Three of the KPK’s five leaders were suspended after the police named them as suspects in criminal cases. Yudhoyono suspended KPK chief Antasari Azhar in May after police implicated him in a murder case. On Sept. 21, the president suspended two KPK deputies, Chandra Hamzah and Bibit Rianto, after they were charged with abusing powers in issuing travel bans against two people being investigated for graft.

Yudhoyono told the KPK and the police July 13 to settle “frictions” between the two agencies and improve their coordination.

“The president should do more than talking about eliminating corruption. He should save the effectiveness of the KPK,” Diansyah said.

KPK Denies Wrongdoing

National police chief Bambang Hendarso Danuri said Sept. 25 the police have no intention “to deflate KPK like some have said.”

Rianto and Hamzah have denied any wrongdoing on the KPK’s Web site. Hamzah said the accusations against him were “cruel lies,” Kompas newspaper reported Sept. 27.

The Corruption Crimes Court “was formed to break the chain of graft that circled the justice system and now the parliament has returned it” Masduki said. “I think Indonesia’s position will drop in the perception index because of this bill.”

To contact the reporter on this story: Achmad Sukarsono in Jakarta asukarsono@bloomberg.net

Last Updated: September 30, 2009 03:43 EDT