SBS DATELINE

October 12 2005

Inside Indonesia’s War on Terror

George Negus: Inside Indonesia's War on Terror Today – as you would almost certainly know – is the third anniversary of the first Bali bombing and our major report tonight provides an alarming twist to the ongoing terror campaign being waged in Indonesia. David O'Shea, a long-time "Indonesia-watcher", reports that where terrorism is concerned in that country – with its culture of corruption within the military, the police, the intelligence services and politics itself – all is never quite what it seems.

REPORTER: David O”Shea: When the second Bali bomb exploded, Australia once again found itself on the front line in the war on terror. But for Indonesians, this was simply the latest in a long line of atrocities. They have born the brunt of hundreds of attacks over the years, most of them unreported in the West. Once again Australia and Indonesia joined forces in the hunt for the Bali killers.

SUSILO BAMBANG YUDHOYONO, INDONEASIAN PREIDENT: We are determined to continuously fight terrorism in Indonesia with an effective global, regional and international cooperation.

JOHN HOWARD, AUSTRALIAN PRIME MINISTER: Tragic incidents such as this so far from driving apart the people of Australia and Indonesia would only bring us closer together.

REPORTER: This show of unity is impressive and it plays well to Australian audiences but many Indonesians don't see it that way.

JOHN MEMPI, SECURITY AND INTELLIGENCE ANALYST (Translation): Why this endless violence? Why are there acts of terrorism year in, year out? Regimes change, governments change, but violence continues. Why? Because there is a sort of shadow state in this country. A state within a state ruling this country.

REPORTER: For seven years I've reported from every corner of this vast nation and seen first hand the havoc that terrorists wreak. Tonight I want to tell you a very different story about Indonesia's war on terror. It contains many disturbing allegations even from a former president.

ABDURRAHMAN WAHID, FORMER INDONESIAN PRESIDENT: The Australians if they get the truth, I think it's a grave mistake.

REPORTER: What do you mean?

ABDURRAHMAN WAHID: Yeah, who knows that the owners to do this, to do that — orders to do this, to do that came from within our own forces, not from the culprits, from the fundamentalist people.

1. TERRORISM – THE CASH COW:

REPORTER: Indonesia's police are doing very nicely, thank you very much, out of the war on terror. They now have all the latest equipment, courtesy of the millions of dollars pouring in from the West. The money ensures the world's most populous Muslim nation remains on side in the fight against terrorism. Mastering all of this new technology represents a steep learning curve for the Indonesian police. Unfortunately today they forget to set up the X-ray machine properly.

POLICE (Translation): Is the film in?

POLICE 2 (Translation): I haven't put it in yet.

REPORTER: Luckily there's an old print lying around from a previous exercise. Because of the war on terror, American and Australian support for the Indonesian police has never been stronger. During Dai Bachtiar's 5-year reign as police chief, Indonesia endured countless act of terror including three major ones – in Bali, then the Marriott Hotel and the Australian Embassy in Jakarta. These massive blasts might have forced the resignation of any other senior official but Dai Bachtiar managed to survive with the backing of powerful friends at home and abroad.

POLICE CHIEF (Translation): I met Paul Wolfowitz.

In Indonesia's parliament earlier this year, I found the police chief boasting about how he gets the star treatment when he visits Washington.

POLICE CHIEF (Translation): I went to Washington, to the White House, to the West Wing. I spoke to Colin Powell in his office. I went to the Pentagon, I met the director of the CIA, the director of the FBI, I met them all.

REPORTER: Indonesia's police are in charge of the war on terror. Years of human rights abuse by the Indonesian military, or TNI, mean it's now out of favour in Washington, but it seems the police can do no wrong.

POLICE CHIEF (Translation): I asked Powell. "You say the TNI has to reform, don't the police have to as well?" Building trust takes time.

REPORTER: Many Indonesians would find the idea of trusting the police laughable. It has long been regarded as one of the most corrupt and incompetent institutions in the country. Former president, Abdurrahman Wahid sums up what many people here belief.

ABDURRAHMAN WAHID: All of them are liars.

REPORTER: Just to be clear, you have your doubts about the police ability to investigate properly all of this?

ABDURRAHMAN WAHID: Oh, yes.

REPORTER: But none of this seems to worry Indonesia's allies in the war on terror.

POLICE (Translation): Have you just got back?

DAI-BACHTIAR, POLICE CHIEF (Translation): I see this man a lot.

POLICE (Translation): Were you in America? Did you get any more money?

DAI-BACHTIAR (Translation): 10 million. We get big bucks. We got 50 million all up. Sure. They keep asking about 88.

REPORTER: That's Detachment 88, the police counter-terror unit which receives a great deal of the international aid, including substantial assistance from Australia. Like the military, Detachment 88 is controversial. Its members stand accused of repeatedly using torture in interrogation of suspects. But these allegations don't seem to even raise an eyebrow.

DAI-BACHTIAR (Translation): The Secretary-General of Interpol came to visit Aceh. I met him. He said our police were dealing with terrorism in a professional manner. 500 million euros. For the police. Long term. So far I've received directly 500 from Denmark. They gave 5, but 500 all up. The Dutch gave 2.

REPORTER: The money is flowing like water but outside the chamber, unrelated to the anti-terror funding, is a scene that should make donors think twice. A man from the Religious Affairs Commission sitting next door counts cash to be distributed amongst voting politicians. Call it corruption or even the trickle down effect, but it's this kind of informal funds distribution which keeps the wheels turning in the Indonesian economy.

DAI-BACHTIAR (Translation): Well now, for example, the other day I got 2 million from Holland… From America… it was 50. Is it 50 already? You know how much the army got? 600. Then they had to get involved.

REPORTER: With all the cash flowing about, some politicians want to stay as close as possible to Dai Bachtiar.

POLITICIAN (Translation): Isn't our police chief great? That's obvious.

REPORTER: With the cash cow growing fatter by the day, some analysts even suggest the police now have too much to gain from the war on terror.

JOHN MEMPI (Translation): But why is there always this worry about bombings? This subservience to foreigners, this paranoia about bombs. You must help us with money, with equipment and training, so that we can do something. We need funds to combat these terrorists. And to convince the foreigners bombings do happen. Indeed there are acts of terrorism in Indonesia but done by "terrorists" in inverted commas.

2. A TERRORIST ON THE PAYROLL:

REPORTER: To most Australians terrorism in Indonesia means Jemaah Islamiah. Abu Bakar Bashir, Dr Azahari and Noordin Mohammed Top have become household names and we're led to believe they're the masterminds behind every atrocity. But there's another side to the JI story that Australia hasn't heard and it's part of the extraordinary family history of this man.

LAMKARUNA PUTRA (Translation): This is Tengku Fauzi Hasbi after he was released. He returned to working and supporting his family.

REPORTER: Lamkaruna Putra's father was an Acehnese separatist leader descended from a long line of Acehnese fighters. He went on to become a key figure in Jemaah Islamiah. Fauzi Hasbi who used the alias Abu Jihad was in contact with Osama bin Laden's deputy. He lived for many years in the house next door to Abu Bakar Bashir in Malaysia and was very close to JI operations chief Hambali. Umar Abduh is an Islamist convicted of terrorism and jailed for 10 years under the Suharto regime. He belonged to a group that attacked police stations and hijacked a Garuda flight to Bangkok. He remembers Fauzi Hasbi as a hardliner who traded arms was willing to commit acts of violence.

UMAR ABDUH (Translation): Fauzi Hasbi is known in the Islamic movement as someone who, from the beginning, has supported the Jihad as the struggle of the Muslim people, aside from his background in the Free Ache Movement.

REPORTER: Fauzi Hasbi was so relaxed amongst the militants, and they with him, that he even took his son to a critical meeting in Kuala Lumpur in January 2000 as JI was preparing for its violent campaign. The attendance list was a who's who of accused terrorists.

LAMKARUNA PUTRA (Translation): There was someone from MILF in Mindanao, his name was Ustad Abu Rela, commander of the Abu Sayyaf. Ustad Abdul Fatah from Patani was there. People from Sulawesi and West Java came to the meeting. The organisation was managed by Hambali. Rabitah means organisation. It linked Islamic organisations.

REPORTER (Translation): So Hambali was chairman?

LAMKARUNA PUTRA (Translation): Yes, Hambali chaired it.

REPORTER: Hambali and co would have known their colleague Fauzi Hasbi had been captured in 1978 by this Indonesian military special forces unit but they wouldn't have known that he became a secret agent for Indonesian military intelligence. The commanding officer that caught him was Syafrie Syamsuddin, now a general and one of Indonesia's key military intelligence figures. These documents obtained by Dateline prove beyond doubt that Fauzi Hasbi had a long association with the military. This 1990 document, signed by the chief of military intelligence in North Sumatra, authorised Fauzi Hasbi to undertake a special job. And this 1995 internal memo from military intelligence HQ in Jakarta was a request to use brother Fauzi Hasbi to spy on Acehnese separatist, not only in Indonesia but in Malaysia and Sweden. And then this document, from only three years ago, assigned him the job of special agent for BIN, the national intelligence agency. Security analyst John Mempi says Fauzi Hasbi alias Abu Jihad played a crucial role within JI in its early years.

JOHN MEMPI (Translation): The first Jemaah Islamiyah congress in Bogor was facilitated by Abu Jihad, after Abu Bakar Bashir returned from Malaysia. We can see that Abu Jihad played an important role, he was later found to be an intelligence agent. So an intelligence agent has been facilitating the radical Islamic movement.

REPORTER: The extraordinary story of Fauzi Hasbi raises many important questions about JI and the Indonesian authorities. Why didn't they smash the terror group in its infancy? Do they still have agents in the organisation? And what information, if any, have they had in advance about the recent deadly spate of terror attacks? The Indonesian intelligence chief refused Dateline's request for an interview and dead men tell no tales. The man who held all the secrets, Abu Jihad was disembowelled in a mysterious murder in early 2003, just after he was exposed as a military agent. His son, Lamkaruna Putra died in this plane crash last month.

3. PROMOTING TERRORISM:

REPORTER: Fauzi Hasbi's death led to a flurry of speculation about shadowy intelligence links to Indonesia's terror networks.

UMAR ABDUH (Translation): So there is not a single Islamic group, either in the movement or the political groups that is not controlled by Intel. Everyone does what they say.

REPORTER: Umar Abduh says his terrorist group was incited to violence after infiltrators showed a letter saying Muslim clerics would be assassinated.

UMAR ABDUH (Translation): There is a document stating that the Muslim leaders would be executed, we as a younger generation were immediately angered. Damn it, this is not right, we have to kill all those Cabinet members and military leaders, that was our plan.

REPORTER: And he's not the only one who says he was used by intelligence agents. Another convicted terrorist is Timsar Zubil who exploded three bombs in Sumatra in 1978. Although no-one was killed, he paid a heavy price.

TIMSAR ZUBIL (Translation): At first I was sentenced to death, it was changed to a life sentence, I served 22years.

REPORTER: Zubil now believes he was set up by former president Suharto's intelligence agency.

TIMSAR ZUBIL (Translation): We may have deliberately been allowed to grow in such a way, that we young people who were very emotional, were provoked into committing illegal acts.

REPORTER (Translation): Who let this happen?

TIMSAR ZUBIL (Translation): The ones who had the authority to ban us, in this case the ones in power, the Suharto regime. I have only started thinking of this recently, but at the time I was active, I didn’t think it through.

REPORTER: After Zubil was captured, beaten and tortured, something remarkable occurred. The authorities made up a provocative name for his group – Komando Jihad.

TIMSAR ZUBIL (Translation): It hadn’t occurred to us to use that name, but they told us that was to be the name of our organisation. We had no plans to use the name Komando Jihad. They told us to just accept it for the time being and if we wanted to deny it later in court, that was up to us. But it made no difference to the court, they insisted that the name was indeed ours.

4. STATE SPONSORED TERROR:

REPORTER: Indonesia's recent history of terrorist attacks began with a deadly campaign that unfolded on Christmas Eve 2000. Bombs exploded almost simultaneously at 18 sites, mostly churches, across six provinces, 19 people died and 120 were injured. Jemaah Islamiah took the blame. It was the first real mention of the group in Australia.

But Indonesians had another theory – they suspected the military, the only organisation with the capacity to pull off an operation of this scale, a full two years before the first Bali bomb. The respected news magazine Tempo even splashed the allegation on its front cover as part of a special investigation. The most revealing information in the report related to the bomber's network operating in Medan, North Sumatra. The man convicted of making the bombs in Medan is somewhere behind these prison walls.

Our repeated requests to interview Edi Sugiarto over many months have been ignored by the Indonesian authorities. Guilty or not, reputable sources claim he was so severely tortured before his trial he would have admitted to anything. But it's clear he wasn't acting alone.

The Tempo investigation included telephone records revealing sensational information of direct links between the bombers and military intelligence. The records also show that Fauzi Hasbi, the military intelligence agent in Jemaah Islamiah who we mentioned earlier, was at the centre of the plot.

He had spoken to Edi Sugiarto, the bomb maker, seven times and had also called a businessman well connected with the military 35 times. That businessman in turn rang a Kopassus special forces intelligence officer 15 times and the officer had called the businessman 56 times.

With Edi Sugiarto in jail, all further investigation ceased and five years on, sources in Medan are too afraid to talk.

The trail has gone stone cold.

5. TERROR IN TENTENA:

REPORTER: George Aditjondro is an early riser. As Indonesia's leading researcher into corruption in high places there never seem to be enough hours in the day. For two years he's been investigating a terror campaign in Poso, Central Sulawesi. His research reveals that terror in Indonesia is much more complex than we are led to believe.

GEORGE ADITJONDRO: There is a mafia, a corruption mafia in Poso who were defending the interests of themselves because if the corruption leaked, the corruption mafia could be exposed, that means the end of their career and also the end of their additional income.

REPORTER: Aditjondro says this corrupt network of local government officials, police and others is using terror to protect a local racquet in Central Sulawesi.

GEORGE ADITJONDRO: Between corruption and terror, there is a very close link because those who were carrying out the terror were paid with corruption money.

REPORTER: Central Sulawesi had just emerged from years of conflict before the latest outrage on May 28 this year. In the predominantly Christian town of Tentena, 60km to the south of Poso, two bombs left 23 people dead. A blast that claimed more victims than the second Bali attack, but received scant coverage outside Indonesia. The first foreign journalist to arrive on the scene, without any evidence at all reported Jemaah Islamiah was to blame for the attack and then promptly flew back to Jakarta. Like the latest Bali bombs, the two bombs that exploded here were full of shrapnel, designed to kill and maim. The first one went off at 8.05 in the morning when the market is busiest.

WOMAN (Translation): This is a thoroughfare, people are always passing, people who want to go there pass here.

REPORTER: This woman is one of thousands of Christian refugees who found sanctuary in Tentena during sectarian violence that cost hundreds of lives in recent years.

WOMAN (Translation): I’m still traumatised. We were chased out of our villages and came here, but it is not safe here either.

REPORTER: A second bomb blew 10 minutes later around 200m away on the other side of the market. Reverend Rinaldy Damanik says it was placed and timed to cause maximum casualties.

REVEREND RINALDY DAMANIK (Translation): The bits of metal in the bomb flew as far as that church. What’s really going on? They showed they can do it under the police’s noses. That’s the police station, imagine this happening in front of the police station.

REPORTER: Reverend Damanik is a powerful figure in this Christian stronghold. For years he defended his community as Islamic fighters swarmed in to wage jihad. I first met him at Christmas in 2001 after villages all around Tentena were razed. He was convinced the army was behind the violence and had even left a calling card.

REVEREND RINALDY DAMANIK (Translation): This is an ammunition box that we found at the time of the attacks in Sepe. It is clearly labelled, Department of Defence, Republic of Indonesia. 1400 pieces of 5.56mm calibre munitions. This means it was meant for M-16s.

REPORTER: George Aditjondro says that in every Indonesian hotspot, the army foments trouble by funding and arming both sides. In the case of Central Sulawesi, both Muslim and Christian militia.

GEORGE ADITJONDRO: So the money do not have to come from rich people like Osama bin Laden and the weapons doesn't have to come from southern Philippines or from other exotic places but is actually coming from the official sources and that is why I am saying that the kind of terrorism which we see in Indonesia is home grown terrorism. It's a kind of duel function or triple function of the armed forces.

REPORTER: The late reverend Agustina Lumentut told me in 2001 that the Indonesian military was using proxy armies to do their dirty work.

THE LATE REVEREND AGUSTINA LUMENTUT: It is for sure, for sure that the army is behind the jihad, or in front of jihad, yeah. No other interpretation.

REPORTER: It was proved beyond all doubt that one of the extremist groups, the Laskar Jihad, was supplied, transported and incited by the central government to go on its murderous spree.

THE LATE REVEREND AGUSTINA LUMENTUT: Who dare among them to say "Stop going that." Because they have reason for doing that, they are registered officially by the government, the central government.

REPORTER: Indonesia's President Susilo Bambang Yudhoyono is applauded in Australia as a moderate Muslim leading the fight against terror in Indonesia. But as the influential coordinating minister for politics and security, he chose not to stop the Laskar Jihad and was even supporting them.

SUSILO BAMBANG YUDOYONO: They also play a role in defending truth and justice that is expected by Muslims in Indonesia. For me, as far as what they are doing is legal and not violating law, then this is OK.

REPORTER: This was a ridiculous statement.Yudhoyono was well aware of the carnage that was under way. Since 2001 things had improved somewhat, as Reverend Damanik tells these politicians from Jakarta visiting after the May 28 bombs. But local leaders are afraid terrorism is being used to derail reconciliation between Muslims and Christians.

REVEREND RINALDY DAMANIK (Translation): The wounds are very deep but they can be endured. But the question is, what is happening to this country? People can’t work because they?re always on their guard, what can we achieve when we’re like that? What’s happening to our country? We need to think about this, but it’s hard to answer right now.

REPORTER: With weapons handed in and a peace deal holding up well, Reverend Damanik's former sworn enemy is also very suspicious about the times of the bomb in May. Muslim leader Adnan Arsan wonders whether the attack was designed to prevent the army from leaving.

ADNAN ARSAN (Translation): Just when a security unit’s work is over and someone says “We’re going home and I hope there’s no more trouble?”Just as they are being recalled there’s another explosion and more killing.

REPORTER: In the days following the blast, all the big names in Indonesian security and intelligence descend on the area. Central Sulawesi police commander Arianto Sutardi tells me the investigation is going well.

REPORTER (Translation): Sir, have you any idea who the perpetrators are?

ARIANTO SUTARDI, POLICE COMMANDER (Translation): We’ve arrested some already and we’re pursuing others.

REPORTER: Then national police chief Dai Bachtiar, the man receiving all the foreign cash arrives to assert his authority. After less than one hour on the ground, he's made his assessment.

DAI-BACHTIAR (Translation): We all hope? incidents like this are criminal acts, we need to expose the perpetrators and put them on trial. People entrust this task to the security forces.

REPORTER: Considering the evidence of corruption here and the police chief's record of enforcing justice, that's unlikely. George Aditjondro's research has uncovered a scam involving local police who have looted up to $2 million for the resettlement of refugees.

GEORGE ADITJONDRO: You can see a cabal involving both the district head, the acting district head at the time, certain police agents, certain people within the department of social affairs and their friends. They were carrying out both the corruption as well as using the corruption money to pay the terrorists. So you can see we are talking about home grown terrorism paid by home grown corruption.

REPORTER: He says the May 28 Tentena blasts were an attempt to stop honest police uncovering more about their scam.

GEORGE ADITJONDRO: You can say that the bombing can be seen as the apex, the ultimate development of the kind of terror which they were committing. It had gone as far as paying police to decapitate a village head man, the village head man of Pinadapa.

REPORTER: The corrupt and murderous cabal identified by Aditjondro is now suing him and the police seem to be in no hurry at all to follow up the leads as he identified. Instead on his departure the police chief Dai Bachtiar offers another bland statement about the certain groups responsible for the violence.

DAI-BACHTIAR (Translation): The situation seemed so promising but certain groups have taken advantage of it to carry out actions such as bombings, which of course will again cause fear and anxiety.

REPORTER: As Dai Bachtiar's plane heads back to Jakarta, more bigwigs arrive. Syamsir Siregar is the recently appointed head of the national intelligence agency BIN. His appearance is supposed to inspire confidence in this investigation. But BIN has a long-standing dismal reputation in Indonesia for dirty tricks. The agency is currently fending off damning evidence that it was behind the poisoning of Indonesia's best known human rights campaigner, Munir Said Thalib. As I reported earlier this year, Munir was given a lethal dose of arsenic in his orange juice on a Garuda flight to Europe. On the Tentena bomb investigation, Siregar has nothing to say.

REPORTER (Translation): If you don’t want to talk about this, what about the Munir case? How’s the internal investigation into the involvement of?

SYAMSIR SIREGAR (Translation): You speak good Indonesian!

REPORTER (Translation): If any rogue elements are involved, what will you do? ?

SYAMSIR SIREGAR (Translation): We’ll take action. I?ve given orders to act against rogue elements.

REPORTER: Rogue elements indeed. Travelling with him is Timbul Silaen, he was police chief during the carnage in East Timor. He was acquitted of crimes against humanity, one of several commanders who escaped justice for orchestrating the bloodshed. Now he's officially retired from the police force. So what on earth is Timbul Silaen doing here with the new chief of intelligence? Is he just along for the ride or is he now on the intelligence payroll? Whatever the answer, the continuing role of these same old state terrorists is truly disturbing. It's no wonder the locals are now deeply suspicious of anyone sent in to protect them. While the police can claim some success arresting terrorists in Java, in this region results are few and far between. After years of state sponsored terror, no-one wants to help the authorities. This woman jokes that fear of talking to the police has become a popular movement.

WOMAN (Translation): The tight lipped movement. People don’t want to be witnesses. They are scared so they shut up, if they see something they deny it, they?re scared.

REPORTER: The first real break in the investigation comes a week after the attack and leads police to, of all places, Poso prison. Incredible as it may sound, a police forensics team finds evidence the bomb was manufactured in the workshop, used for prisoner rehabilitation.

POLICE (Translation): It’s a workshop for teaching them welding skills.

REPORTER: The fact that the bomb may have been assembled in a state-run facility further bolsters the central thrust of Aditjondro's remarkable research. That there is high level involvement in terror in Sulawesi.

GEORGE ADITJONDRO: What we have found out is just the tip of the iceberg. It shows a permanent pattern which has been going on for the last five years.

REPORTER: For the record, the authorities reject his allegations.

6. QUESTIONS ABOUT BALI:

REPORTER: Two weeks after the second Bali attack and despite plenty of help from the Australian Federal Police, Indonesian authorities are still pursuing the culprits. But a familiar pattern has emerged. Asia's most wanted men, the so- called masters of disguise, Dr Azahari and Noordin Top have been named as the masterminds. And once again everyone is insinuating Jemaah Islamiah is behind the bombs. That may eventually be proved correct, but so far no evidence has been produced, at least publicly, to back that claim. As we've shown tonight, after enduring years of state-sponsored terror, it's no wonder many Indonesians question what they're being told about this latest atrocity.

GEORGE ADITJONDRO: You hear again the sources – the statements that it was carried out by Azahari and Noordin Mohammed Top and a radical Muslim groups behind it. Although what I heard is this actually shows a rivalry, internal rivalry within the armed forces.

REPORTER: George Aditjondro didn't provide any evidence to back his allegation, but theories like this are hard to write off just yet. Former president Abdurrahman Wahid tried in vain to rein the military and it cost him the presidency. In 2003 just after the Marriott Hotel blast, he was clearly frustrated by foreign intelligence claims that JI were to blame.

ABDURRAHMAN WAHID: They can say whatever they want but we are here, we live here, we know them. But I won't say who.

REPORTER: But you know who it is, you think?

ABDURRAHMAN WAHID: No, no, I don't know. When I said that I meant we cannot know – we cannot know the truth about that. That is the problem always.

REPORTER: But that bomb has been blamed also on Jemaah Islamiah.

ABDURRAHMAN WAHID: Yeah, I know but you don't have any kind of proof. The proof is that the bomb is similar to that belong to the police. It's a problem for us then. Every bomb there until now it belongs to the government.

REPORTER: Today is the third anniversary of the first Bali attack that saw 202 people killed, including 88 Australians. Abdurrahman Wahid now has questions about that attack as well. While some regard him as an Eccentric, he is the former president and is often described as the conscience of the nation, revered by tens of millions of moderate Muslims. As such, he's one of only a few people publicly prepared to canvass the unthinkable – that Indonesian authorities may have had a hand in the Bali atrocity. He believes that the plan for the second, massive at the Sari Club, which caused the majority of casualties, was hatched way above the head of uneducated villagers like Amrozi.

ABDURRAHMAN WAHID: Amrozi was involved in the lighter bomb. That's a problem always. Even though I agree that he should be given a stiff punishment, but it doesn't mean that he is involved. No, no, no.

REPORTER: So you believe that the Bali bombers had no idea that there was a second bomb?

ABDURRAHMAN WAHID: Yeah, precisely.

REPORTER: And who would you suggest planted the second bomb?

ABDURRAHMAN WAHID: Well, it looks like the police.

REPORTER: The police?

ABDURRAHMAN WAHID: Or the armed forces, I don't know.

REPORTER: Wahid's speculation is chilling and again there's no evidence to support it. But there's no doubt that he's a barometer of how many Indonesians view the whole terror campaign.

7. BACK TO THE FUTURE:

REPORTER: This ceremony in July marked a significant moment in the evolution of Indonesia's fight against terrorism. The nation's most senior police watched as their chief, Dai Bachtiar, was replaced by General Sutanto, touted as a cleanskin. Following his swearing in, he made an impressive start – launching a high profile anti-drug campaign and promising to crack down on rampant corruption within the police force. But for now, he's getting familiar with the rhetoric required for the job.

GENERAL SUTANTO (Translation): We are sharing experience with other countries in order to eradicate the terrorism.

REPORTER: But it's not the experience sharing with other countries that matters, like every police chief before him, he will only ever play second fiddle to the army and will struggle to control the cabal of rogue elements who still wield massive power here. Abdurrahman Wahid says that no policeman would dare to properly investigate repeated allegations that their big brothers in the military are involved in the terror campaign.

ABDURRAHMAN WAHID: They know it's against see, what they do – was against you see, several, you know, senior officers, even of the police itself. So they don't want to be involved.

REPORTER: Because?

ABDURRAHMAN WAHID: Of the fear.

REPORTER: The fear of what? Of the senior officers that are involved in this?

ABDURRAHMAN WAHID: Yeah, yeah, yeah.

REPORTER: At the moment it's the police who are receiving all the equipment, support and training to take on the terrorists. At the opening of this multimillion dollar training facility, which is part funded by Australia, the Indonesians were keen to show off their skills. The war on terror has brought the two nations closer together, but any Australian concerns about corruption and human rights in this new partnership appear to have been put aside for now. But the Indonesian police's leading role in the fight against terror may be about to change anyway. In the wake of the latest attack in Bali, President Yudhoyono has taken steps to rehabilitate the military's tarnished name and bring them back into the counter terror drive. For those who risked their lives opposing Suharto's brutal military, it's a disturbing thought. That the retired general, President Yudhoyono, known in Indonesia by his initials Sbyeah, may be ushering in a return to those bad old days.

GEORGE ADITJONDRO: Now, General SBY, himself, he doesn't like to be called general SBY, he likes to be called Dr SBY has made the statement that the military is ready to help, to assist the police in chasing the terrorists. In other words, the military is looking for an alibi for a reason to reconsolidate their power as during the Suharto period.