Indonesia went through a major reform process in 1998 after the fall of its authoritarian leader, Suharto. This reform has, to a certain extent, progressed towards transforming the economic, political and social landscape of the country. However, one of the biggest challenges of this reform today still lies in its attempt to eradicate the endemic (systemic) corruption that makes Indonesia one of the most corrupt countries in the region. (ref. TI Ranking) Suharto's demise was seen as a promising step toward getting rid of systemic corruption in the country, but over the past fifteen years, progress toward accountable and clean governance is still uneven. According to The U4 (ref), endemic corruption occurs when it has become an integrated and essential aspect of the economic, political and social system where the major institutions and processes of states are regularly dominated and used by groups of corrupt individuals . This article argues that Suharto's The Legacy of Corruption, Collusion and Nepotism (KKN) has not only institutionalized structurally systemic corrupt governance, but has also eroded morality and ethics at the individual level of the nation . The biggest challenge in eliminating corruption in Indonesia is at both the structural and individual levels. This article will begin by examining the extent to which corruption in Indonesia is systemic and Suharto's role in institutionalizing it. The McLeod model of Suharto's "franchise" system of patronage will be used to explain the nature of the KKN in Indonesia and how it still persists during the reform period. Finally, we will examine arguments about the importance of also considering agency factors (and not just a structural approach) in the formula...... middle of paper ......al Hill. Asian Wall Street Journal. ISSN 03779920. Yudhoyono's six challenges for Indonesian growth; By Hal Hill 2004, Victoria, Hong Kong.< http://search.proquest.com.virtual.anu.edu.au/docview/315500514>Hill, H. (May 17, 2010). Where the power lies in Indonesia. The Wall Street Journal Asia. Retrieved from http://search.proquest.com/docview/288074498?accountid=8330Robertson-Snape, F. 1999, “Corruption, collusion and nepotism in Indonesia”, Third World Quarterly, vol. 20, no. 3, pp. 589-602. “Supreme Court recovers Rp 9.43 t in 2010.” The Jakarta Post, December 31, 2010, accessed at http://www.thejakartapost.com/news/2010/12/31/supreme-court-retrieves-rp- 943t-2010.htmlUnderstanding or defending Suharto 2002, , PT Tempo Inti Media Tbk (“TEMPO”), Jakarta.< http://search.proquest.com.virtual.anu.edu.au/docview/198937505>U4. http://www.u4.no/info/about-u4/