A corruption scandal focused on the construction of athletes' dormitories in Palembang in South Sumatra province for the Southeast Asian Games has embroiled senior figures in Mr Yudhoyono's Democratic Party (PD), damaging the party's reputation and public standing. The PD's treasurer, Muhammad Nazaruddin, who was dismissed from his post on May 24th, is suspected of having arranged illegal payments from the project, which was commissioned by the Ministry of Sports and Youth Affairs. The minister for sports and youth affairs, Andi Mallarangeng, is a senior figure in the PD, but he has not yet been implicated in the scandal. The scandal ignited in April, when the Corruption Eradication Commission (KPK) caught a contractor, Muhammad El Idris, providing a kickback of Rp3.2bn (US$375,000) to the secretary-general of the sports ministry, Wafid Muharram. A broker who arranged the meeting, Mirdo Rosalina Manulang, was found to work for a company owned by Mr Nazaruddin. An internal party investigation by the PD concluded in May that Mr Nazaruddin was not linked to the scandal, thereby raising suspicions of complicity and a cover-up in the senior ranks of the party. However, in an embarrassing volte-face, the party's ethics committee then decided to dismiss Mr Nazaruddin, describing the move as "good for the party's image". The former treasurer may also be subject to an investigation by the KPK.

The PD is the largest party in parliament, and Mr Yudhoyono serves as chairman of its advisory board. It was formed in 2001 to offer a clean break from the tainted secular-nationalist political parties established during the New Order era, including Golkar and the Indonesian Democratic Party-Struggle (PDI-P). Its popularity stems from this perception that it has provided a fresh start, as well as its pledges to ensure clean governance and to tackle corruption. The recent scandal therefore has the potential to inflict severe damage on the PD. More worryingly, given its strength in the legislature and its likely influence in terms of shaping the development of Indonesian politics beyond 2014, when Mr Yudhoyono's second presidential term expires, signs that the PD could be succumbing to the corrupt and self-interested ways of other parties auger ill for reform and cleaner governance in the long term.

Parties across the political spectrum in Indonesia are known to use corruption and kickbacks to raise funds, through activities such as the licensing of forestry concessions and land clearance, and mark-ups on procurement and construction contracts. There is a heightened level of risk that corruption will worsen as party fundraising for the 2014 legislative and presidential election campaigns begins. A special report in Indonesia's leading national newspaper, Kompas, in late May highlighted such concerns and detailed how all major political parties are sourcing kickbacks to fund their participation in the 2014 elections.