Nov. 4 (Bloomberg) -- Indonesian police released two deputy chairmen of the Corruption Eradication Commission who were arrested last week for alleged abuse of power.

A panel formed by President Susilo Bambang Yudhoyono called for the release of the deputies yesterday after Indonesia’s Constitutional Court played recordings of telephone conversations in which Indonesian businessman Anggodo Widjojo was purportedly heard trying to incriminate anti-graft officials, allegedly with the help of prosecutors and police officers.

Yesterday’s public playing of the phone conversations added another twist in the police investigation against Chandra Hamzah and Bibit Rianto. The case has captured the attention of Indonesians and put Yudhoyono’s drive for clean governance under scrutiny. The president started his second five-year term last week vowing to boost the fight against corruption to attract investment.

“The impact of the recordings will make the people angry and confused that this country can be dictated by a central character called Anggodo,” Adnan Buyung Nasution, a lawyer who leads the president’s team, told reporters at a press briefing earlier today in Jakarta.

“The deferment of detention is not because of external pressure,” Soekarna told reporters in a press briefing aired by TVOne news channel late yesterday.

“This is only a deferment of detention,” Hamzah told MetroTV news channel in an interview after leaving police headquarters today. “The status of the case itself has not been touched.”

Arrest Sought

Nasution said his team, formed Nov. 2 as an independent body to look into the case, asked the police to arrest Anggodo and take action against high-ranking detectives whose names were mentioned in the recordings, including Susno Duadji, head of the police’s criminal investigation division. Duadji has denied any wrongdoing. The independent team doesn’t have legal authority to order arrests or the release of the deputies.

Police Oct. 29 arrested Hamzah and Rianto on allegations they abused their powers when they issued travel bans against targets of corruption probes, including Anggodo’s brother. Both men have denied any wrongdoing. Anti-graft groups have accused the police of using the case to weaken the KPK, as the anti- graft body is known. The agency has convicted governors, legislators and police officers since it was formed in late 2003.

The court today played almost four hours of recordings of more than 60 conversations in which Anggodo purportedly spoke with several people, including those thought to be prosecutors and policemen about a way to bribe KPK officials. In later chats, they changed that plan into an attempt to frame Hamzah and Rianto in a bribery case.

The conversations also mentioned funds needed to secure support from officials in the police and the attorney general’s office for the success of the plan.

Conversations Acknowledged

In an interview with Indonesian news channel TVOne today, Anggodo said the voice on the phone was his, and he said he prepared 1 billion rupiah with which to bribe the KPK officials. He denied that he tried to frame them.

The wire-tapping was part of an investigation by the KPK, Tumpak Panggabean, the agency’s temporary chairman, said in court today. Neither the court nor the KPK confirmed the plan heard in the conversations were real.

“Businessmen are victims in corruption cases but sometimes businessmen can also be actors of corruption when they collude with the officials in the government for their interests,” said Frenky Simanjuntak, who manages the economic governance unit of Transparency International’s Indonesian office, adding “this is still common in Indonesia”.

Yudhoyono was mentioned several times in the conversations. One of the speakers said Yudhoyono “was on the side” of Anggodo, whose brother was being investigated for corruption by the KPK.

‘Completely Revealed’

Yudhoyono “wants the case to be completely revealed and it should be explained how was it so easy for someone to flaunt the name of the president,” presidential spokesman Dino Djalal told reporters today.

Indonesian newspapers for weeks have been filling their pages with what they called “transcripts” of the conversations between a businessman whose phone was wire-tapped and several individuals, including people thought to be a prosecutor and a policeman. News channels have hired actors to play out the alleged conversations.

More than 500,000 people in Indonesia have joined a protest on networking site Facebook against last week’s arrest, and street protests against the police investigation have occurred in several Indonesian cities.

Hundreds of people attended today’s session when the recordings were played, forcing the Constitutional Court to let spectators stand inside the chamber and sit in the lobby.

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

Last Updated: November 3, 2009 12:29 EST