By Kanupriya Kapoor
JAKARTA, Dec 17 (Reuters) - Indonesia's anti-graft agency named a prominent provincial governor a suspect on Tuesday in the latest in a series of high-profile corruption cases that have eroded public trust in President Susilo Bambang Yudhoyono's ruling coalition.
Over half of Indonesia's 539 regional leaders are now under investigation for graft corruption, helping keep Southeast Asia's biggest economy near the top of the list of the world's most corrupt.
Ratu Atut Chosiyah, governor of Banten province, on the western tip of the island of Java and sharing a border with the capital, Jakarta, is suspected of being involved in two corruption cases, including bribing a top judge, who is already under arrest over graft.
"The governor of Banten is officially a suspect in a bribery case involving the Constitutional Court chief justice and election rigging in ... Banten," Abraham Samad, head of the Corruption Eradication Commission (KPK) told reporters.
"She is also declared a suspect in a case involving the procurement of medical equipment in Banten."
A spokesman for Chosiyah and her family said they were surprised and regretted the decision to name her a suspect.
"She has cooperated fully with the KPK investigation and everything shows that she is not involved in any corruption," spokesman Nur Ikhsan said via text message.
"The family believes the more the case is investigated, the more innocent she will look."
The agency's major arrests this year include the head of the energy regulator and a former sports minister and close aide of President Yudhoyono.
The former minister is accused of involvement in a multi-million dollar corruption case that has ensnared several other senior members of Yudhoyono's ruling party, whose popularity has been tumbling ahead of next year's general election.
Yudhoyono, coming to the end of a second and final five-year term, swept to power largely on an anti-graft platform in Indonesia's first direct presidential election in 2004.
But the country's rank of 114 out of 177 in Transparency International's latest annual corruption index has not changed from the previous year, putting it in the same company as Egypt and Ethiopia.
The case against Chosiyah has also exposed the impunity some regional leaders enjoy in the young democracy's decentralised political system.
As Indonesia's first female governor and a prominent member of the second biggest political party, Golkar, Chosiyah is also the head of a political dynasty that has long held sway in Banten province, where some six members of her family occupy senior government posts.
Public scrutiny of the family's stranglehold on the largely impoverished region mounted as details emerged in the media of their massive wealth - including mansions, a fleet of luxury cars, and overseas shopping sprees.
The graft investigation into Chosiyah's family started with the arrest of her brother, Tubagus Wardhana, in connection with election rigging. A subsequent investigation named his wife, the mayor of a city in Banten, and the governor herself, threatening to bring down a family empire that has been in place for more than a decade.
"Banten as a province has suffered because of the poor governance," said Agus Sunaryanto of Indonesia Corruption Watch.
Chosiyah has not been detained by the KPK and remains governor of Banten, the Ministry of Home Affairs says. (Editing by Jonathan Thatcher and Robert Birsel)