JAKARTA (Reuters) - The former treasurer of Indonesian President Susilo Bambang Yudhoyono's ruling Democrat Party was found guilty of corruption on Friday and jailed for nearly five years at the conclusion of a case that has tarnished the president's image.
Muhammad Nazaruddin, Yudhoyono's party treasurer until he fled overseas when graft allegations emerged last year, was convicted of taking about $500,000 to help a construction win a contract to build an athletes' dormitory for the Southeast Asian Games last year in Indonesia.
Indonesia has attracted substantial investment because of its fast-growing economy and political stability but institutional graft and rampant petty corruption are obstacles for businesses.
The sentence of 4 years and 10 months was less than a prosecutor's demand for seven years. Nazaruddin, who was detained while on the run in Colombia, also has to pay a fine of 200 million rupiah ($21,800) or face another four months jail.
Nazaruddin denied the charges and said he had not decided on whether to appeal.
"This is a fabrication done for the interests of those in power who from the start wanted me to be a suspect in a political case like this," Nazaruddin told reporters outside court.
"If I did receive a gift, why I wasn't I told to return the money?" he said.
Yudhoyono was re-elected in 2009 on a platform of fighting graft in the G20 economy, but his failure to remove senior politicians tainted by graft has sown doubts over his commitment to reform.
His popularity has fallen in opinion polls since the allegations against Nazaruddin emerged.
"I have already lost hope with the administration of Yudhoyono and the party," said Rahma Raudani, a 25-year-old communications student, who voted for Yudhoyono.
"I won't vote for the Democrats - I am thinking of abstaining in the next election as this kind of issue will happen again. I have no trust," she said.
Fighting graft is likely to be a major issue in the campaign for a 2014 presidential election. Yudhoyono cannot stand for a third term but he has yet to name a favored successor.
($1 = 9,179 rupiah)
(Reporting by Aditya Suharmoko and Rieka Rahadiana; Writing by Neil Chatterjee; Editing by Robert Birsel)