Indonesia military identifies three graft suspects over helicopter deal

JAKARTA (Reuters) - Indonesia's military and anti-corruption agency have identified three suspects in a corruption investigation into the controversial purchase of an AgustaWestland helicopter, the military chief said on Friday. General Gatot Nurmantyo said the investigation, in which the police, state auditors and the Corruption Eradication Commission (KPK) participated, found the deal did not follow proper procedures, causing a loss of 220 billion rupiah ($17 million). Originally meant for the use of Indonesia's president, the AW101 helicopter looked set to become a white elephant when Joko Widodo in 2015 rejected the $55-million purchase in favour of continuing to use an older helicopter, media have said. The three suspects are all military personnel on active duty, Nurmantyo said, referring to them only by their initials at a joint news conference at the headquarters of the anti-corruption agency. "In the military, corruption is very detrimental to the soldiers because...those who do it are policymakers and they could endanger soldiers by buying sub-optimal equipment," Nurmantyo said. Investigators have also frozen the bank account of a domestic company linked to the procurement, holding a balance of 139 billion rupiah ($10.5 million). Italian defence group Leonardo Finmeccanica, the parent company of AgustaWestland, could not immediately be reached for comment. Controversy over the Air Force's helicopter purchase deal grew late last year when Nurmantyo sought to cancel it. In response, Air Force officials said they had government and parliamentary approval to continue with the purchase and alter the craft to equip it for search and rescue missions. Nurmantyo then ordered an investigation into the deal. The AW101 helicopter arrived in Jakarta in February but was sealed at the capital's Halim military airbase, media have said. In 2014, India cancelled a $770-million deal to buy 12 AW101 helicopters after the arrest of the then chief executive of Finmeccanica, Giuseppe Orsi, for allegedly paying bribes to secure the deal. ($1=13,294.0000 rupiah) (Reporting by Gayatri Suroyo and Stefanno Reinard; Editing by Ed Davies and Clarence Fernandez)