Page 123 - SCANDAL AND DEMOCRACY

108 Chapter 6

progress toward democratization promised by the opposition’s victory in the June
elections. There were clear signs that Indonesia could be heading the way of Chile and
other nations where democratic transition had stalled.
Complicating this incipient reversal, however, a campaign finance scandal broke,
striking mortal blows to President Habibie’s candidacy and throwing his party’s deal
making into disarray. While this scandal, dubbed “Baligate,” did not force Golkar to
give up any seats won with fraudulent funds, its impact was profound. The same news
media that had been so cautious in reporting fraud during the elections in June and
July seized upon these new revelations, splashing them across front pages and evening
newscasts for weeks. In the months leading to parliament’s selection of the president
on October 20—the final phase of the 1999 elections—it was the media’s sustained
attention to the scandal, and protests mobilized in response, that returned the uncer-
tainty of open-ended contestation to Indonesia’s electoral process and facilitated a
meaningful circulation of leadership.
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More broadly, if Golkar’s successful engineering of the 1999 legislative elections
examined in chapter 5 demonstrates democratization’s inherent inclination toward
reversal, the convergence of a media-driven electoral scandal and Habibie’s final bid to
retain the presidency illustrates the central role that a competitive media, combined
with civil society, can play in blocking this same reversal. Moreover, close examination
of Baligate offers insight into the phenomenon of political scandal itself, helping to
explain why some stories surface only to disappear, while others escalate to produce
political change.

Baligate
A month after Tempo ’s close-grained investigative report on Golkar’s systematic
campaign fraud in Sulawesi faded with little impact, a similar story of electoral cor-

ruption snowballed into a full-blown scandal reconfiguring the country’s political
landscape. The story began in late July 1999 with an unexpected disclosure at a bank-
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restructuring seminar in Jakarta’s Millennium Hotel. During this otherwise sedate

event, a financial analyst named Pradjoto [one name] exposed a dubious transaction
between the private Bank Bali and a finance company with ties to Golkar. That same

day, the former underground email list SiaR broke the story to its limited readership.
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The following day, Kompas reported it in its English edition. By August 3, it was
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headlined by most of the major news outlets (print and broadcast) and even the gov-
ernment-run news agency, Antara. The story and subsequent revelations rocked the
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nation, capturing media and public attention to an extent not seen since Suharto’s fall.
In a political environment where, as the Straits Times observed, “one scandal a
week [was] the new yardstick,” the Bank Bali story dwarfed everything to date, over-
shadowing nearly all other issues for weeks. “Even if all the country’s top young
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models appear naked on the front pages of local newspapers tomorrow,” commented
the Jakarta Post , “they couldn’t top the latest bank scandal to have hit this country.”
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The scandal had its origin in the banking collapse triggered by the 1997 Asian
financial crisis. As part of a $130 million bailout, Indonesia’s bank restructuring
agency (Badan Penyehatan Perbankan Nasional, BPPN) had taken control of the pri-
vately held Bank Bali. More than a year later, in the middle of the night, an unknown
source dropped a package of documents on Pradjoto’s doorstep. In response to a ques-
tion during the July seminar about holdups in foreign investment, this banking law
expert shared the documents’ revelation that Bank Bali had paid the Golkar-connected