Monthly Archives: January 2012

KPK to Supervise BPK in Rembang Case

I’ve been following this corruption case from Rembang, Central Java since early last year.  It involves the mark-up of land bought by a District Government Owned Enterprise (BUMD) that BPK, the State Audit Agency, initially estimated to have resulted in losses of Rp. 5.2 billion ($580,000).  The case involves the current Bupati, Moch Salim, from the Democrat Party.  The case was brought to public attention in 2009 and it has been under investigation since.  Moch Salim won a second term in office in 2010.

For the past year the investigation has been delayed because of confusion over the requirement for BPK to complete the State Losses Calculation (PKN – Perhitungan Kerugian Negara). The police, who are investigating the case, have requested BPK to audit the transactions involved and estimate the losses, but initially BPK advised the Police that it was unnecessary and that they could use the estimate included in the original routine audit that uncovered indications of corruption.  Recently, BPK has agreed to reestimate the losses.  This quote from Suara Rembang.Net (see here)

The Coordinator of the local branch of the Institute for Community Empowerment Research Coordinator (LASPEM), Bambang Widodo, said on Monday (30/1) that the investigation of alleged corruption in the RBSJ Company has delayed partly because of BPK has not issued the PKN [State Losses Calculation].

“The assistance of KPK in the supervision of the PKN are specified in the letter numbered R 232/40-43/01/2012 and dated January 17, 2012 and which we received today (30 / 1),” he said.

The letter, signed by Handoyo Sudradjat on behalf of Deputy Internal Monitoring and Public Complaints of the Corruption Eradication Commission was issued after receiving a complaint LASPEM regarding delays in publication of the PKN relating to alleged corruption in the regional company owned by the Rembang District Government.

Koordinator Lembaga Studi Pemberdayaan Masyarakat (Lespem) Kabupaten Rembang, Bambang Wahyu Widodo, Senin (30/1) mengatakan pengungkapan dugaan korupsi di PT RBSJ terhambat penanganannya antara lain karena belum juga diterbitkannya PKN oleh BPK.

“Bantuan KPK untuk supervisi PKN tersebut tertuang dalam surat bernomor R 232/40-43/01/2012 tertanggal 17 Januari 2012 yang kami terima hari ini (30/1),” kata dia.

Surat yang ditandatangani oleh Handoyo Sudradjat atas nama Deputi Bidang Pengawasan Internal dan Pengaduan Masyarakat pada Komisi Pemberantasan Korupsi terbit setelah menerima pengaduan Lespem terkait belum juga terbitnya PKN atas kasus dugaan korupsi di perusahaan daerah milik Pemkab Rembang tersebut.

KPK’s commitment to monitor the process is helpful, but it’s unlikely to guarantee progress.  It would have more teeth if it was likely that KPK would take-on the case itself.  This is probably unlikely in this case as the initial estimate of state losses is probably too low for KPK.  But other criteria could also come into play.  Will continue to monitor this case–it will be interesting to see if there are any changes from the initial estimate.

h/t KP2KKN, see here.


Presidential Anti-Corruption Dialogue To Be Held Regularly

Last week I made some notes (see here) about the dialogue held between the President and about 40 civil society organizations.  This was followed by a series of media articles quoting the main NGO leaders and which I’m just catching up on (made easy by KP2KKN’s media archive blog).  I thought I should add this response of the President to the request that he become more involved in overseeing corruption cases at the police and prosecutors (as quoted in Kompas here):

President Susilo Bambang Yudhoyono, in the presence of anti-corruption activists, promised active measures to eradicate corruption in Indonesia. … “But it does not mean the President will take over the duties and responsibilities under the authority of the Police, State Prosecutor, and so on.  There’s just no chance [that will happen].  Moreover, their jurisdiction shouldn’t be subject to intervention from anyone,” said the President in dialogue with the anti-corruption activists at the State Palace, Jakarta, Wednesday (25/01/2012).

Presiden Susilo Bambang Yudhoyono, di hadapan para pegiat antikorupsi di Indonesia, berjanji akan aktif dalam langkah-langkah pemberantasan korupsi di Indonesia. …  “Tapi tidak berarti Presiden mengambil alih tugas dan tanggung jawab kewenangan Polri, Kejaksaan, dan seterusnya. Tidak mungkin. Apalagi wilayah hukum itu tidak boleh ada intervensi dari siapa pun,” kata Presiden pada dialog dengan pegiat antikorupsi di Istana Negara, Jakarta, Rabu (25/1/2012).

As I commented last week, it’s unlikely the president will want to involve himself in the politics of deciding which cases proceed (and which do not).  And it’s an easy position to make from a judicial independence perspective.  But arguably judicial accountability is just as important as judicial independence (particularly when it comes to the police and prosecutors, which are not themselves judicial institutions).  And from a political perspective, such a statement sends a clear signal to the police and prosecutors to continue, business as usual.  I think it would have been good if the President had acknowledged some of the institutional accountability mechanisms that exist and encouraged their use, such as the praperadilan process as well as the commissions that are meant to monitor these agencies, e.g., Prosecutor Commission.  Right now there’s not really any acknowledgment within the government that there’s a problem.

Finally, it also seems that these dialogues will occur on a routine basis, with the next one scheduled for April. Here’s Tetan Masduki as quoted in (here):

Secretary General of Transparency International Indonesia, Teten Masduki, stated that the Presidential Anti-Corruption Dialogue (dialogue between thepresident and the anti-corruption activists) will be carried out routinely.  The next dialogue will be conducted in April. “We, the anti-corruption campaigners will use the dialogue forum to talk about concrete things that the president needs to follow-up,” he said at the Presidential Office, Wednesday, January 25, 2012.

The President himself initiated the dialogue, Teten continued.  “And the dialogue is a continuation of the Anti-Corruption Day in Semarang on December 9 last year,” he said.

Sekretaris Jenderal Transparency International Indonesia Teten Masduki menyatakan Presidential Anti-Corruption Dialog (dialog antara presiden dengan para penggiat anti korupsi) akan dilakukan secara rutin. Untuk dialog selanjutnya akan dilakukan April. “Kami, pegiat anti-korupsi akan menggunakan forum dialog membicarakan hal-hal konkret yang Presiden perlu menindaklanjuti,” kata dia di Kantor Presiden, Rabu 25 Januari 2012.

Inisiatif dialog sendiri, Teten melanjutkan, berasal dari Presiden. “Dan merupakan kelanjutan dialog saat Hari Anti Korupsi di Semarang pada 9 Desember lalu,” kata dia.

It’ll be interesting to see how these dialogues develop.

h/t KP2KKN’s blog (here)

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Sukawi Pretrial Hearing (Praperadilan) Delayed Again

Last week Suara Merdeka reported that the Community Anti-Corruption Advocacy Team (TAMAK), a local civil society alliance from Semarang, has again delayed their request for the Semarang State Court to review under the praperadilan (pretrial hearing) process the Central Java High Prosecutor’s decision in 2010 to discontinue the corruption investigation of former Mayor Sukawi Sutarip.

The case involves the former Mayor of Semarang, Sukawi Sutarip.  He first took office in 2000 with support from PDIP.  In 2007 he switched to the President’s Democrat Party and in 2008 he ran for provincial Governor, losing to PDIP’s Bibit Waluyo.  Somewhat unusally, in this corruption case the provincial High Prosecutor formally dropped the investigation issuing a SP3 on 29 October 2010, after a prolonged investigation that spanned the gubernatorial campaign.  I say unusual because it is common for cases to be “forgotten” and not proceed from investigation to prosecution but rarely are they formally discontinued.

The praperadilan process allows State Courts to review the decisions of police and prosecutors to halt investigations.  It allows for the defendant, the victim and other “interested third parties” to initiate the praperadilan process. It is not a well used procedure and there is some uncertainty about the definition of “interested third parties”.  I know of at least one case in Solo where the local State Court accepted from the Indonesian Anti-Corruption Society (MAKI), a local Solo-based NGO, a praperadilan request in relation to a corruption case.  (I’ll post on this another time.)

It seems that TAMAK is concerned that there request will be turned-down.  Slamet Haryanto, Director of the local branch of the Legal Aid Foundation (LBH) in Semarang, as reported in Suara Merdeka last week:

TAMAK had previously promised to file a lawsuit [praperadilan] with the Semarang District Court last week. But TAMAK acknowledged that they need to make further changes to their request. It is no longer planned to submit the request on behalf of the non-governmental organizations (NGO) but on behalf of the people of Semarang City.  “This change is to strengthen the lawsuit so as to ensure we do not to lose in court,” said Slamet Haryanto, the TAMAK Coordinator and Director of LBH Semarang, Slamet Haryanto.

Tamak sebelumnya telah menjanjikan gugatan akan diajukan ke Pengadilan Negeri Semarang pekan lalu. Tamak mengaku harus mengubah lagi materi gugatan serta penggugatnya. Rencananya, gugatan tak lagi diatasnamakan lembaga swadaya masyarakat (LSM), namun diganti atas nama masyarakat Kota Semarang. ”Perubahan ini untuk memperkuat gugatan agar tidak kalah di pengadilan,” demikian Koordinator Tamak yang juga Direktur LBH Semarang, Slamet Haryanto.

This is one of the cases I’ve been following for my PhD research.  I’ll need to follow-up with LBH next time I’m in Semarang.

h/t Adi of Suara Merdeka.  See his blog here.

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The Political Economy of Central Banks: Miranda Goeltom Edition

As noted yesterday, Miranda Goeltom was named a suspect in a corruption case relating to her appointment to Indonesia’s Central Bank in 2004.  Testimony from other witnesses indicates that about Rp. 24 billion ($2.7 million) was distributed to 41 of 56 members of Parliament’s finance commission who voted to confirm Miranda.  It is generally thought that Artha Graha Group of Tomy Winata is involved in providing the funds.  The case first emerged in 2008 and I’ve always wondered about the political economy of this case–what it is that those putting up the cash would want in return.  At least three possibilities were suggested in commentary this week.

O’Rourke in his Reformasi newsletter notes that there have been suspicions that the bribes relate to monetary policy and the preference of commodity exporters for a weak Rupiah exchange rate (Artha Graha Group’s portfolio includes palm oil plantations, which is one of Indonesia’s largest export commodities):

At the time of the bribery, suspicions revolved around the influence of resource-sector exporters over economic policy-making: specifically, a depressed exchange rate helps expand the profit margins of resource companies that export commodities, such as palm oil, pulp, paper and coal.

Yunus Husein, the Head of the Financial Transaction Report and Analysis Centre (PPTAK) and quoting an unnamed former Central Bank commissioner, suggests that most appointments are sponsored by problem banks that may require policy leniency or access to short-term financing for liquidity reasons:

“According to one of the deputy governors of Bank Indonesia who was questioned by the Corruption Eradication Commission (KPK), the selection of Bank Indonesia senior deputy governor usually involves sponsors.  Usually the sponsors are troubled banks,”said Yunus Husein, a member of the council that examined the travelers checks, at ICW’s office on Friday (27/1).

“Menurut pengakuan salah satu deputi gubernur Bank Indonesia kepada KPK yang waktu itu diperiksa di ruangan saya di PPATK, dalam pemilihan deputi gubernur senior BI biasanya ada sponsor-sponsor. Biasanya sponsor-sponsor itu bank-bank bermasalah,” kata anggota majelis eksaminasi kasus suap cek pelawat ICW, Yunus Husein, di kantor ICW, Jumat (27/1).

Yunus, speaking at ICW, also suggested that it relates to gaining access to inside information about Central Bank market operations:

According to [Yunus], by sponsoring a Bank Indonesia deputy governor, one can control information and access the Indonesian banking system.

“Moreover, many Bank Indonesia policies, such as open market operations and the sale and purchase of SBI (Bank Indonesia Certificates), relate to intervention in the market. If information is obtained [of these operations] it could of course bring benefits. At the very least one can guard against losses” said Yunus.

Menurutnya, dengan menjadi sponsor deputi gubernur BI, seseorang bisa menguasai informasi dan akses dunia perbankan Indonesia.

“Apalagi BI banyak policy (kebijakan) seperti open market operation dan jual beli SBI (Sertifikat Bank Indonesia) dalam rangka intervensi di pasar. Kalau informasi itu diperoleh, tentunya bisa memberi keuntungan. Paling tidak, mencegah kerugian bagi dirinya,” imbuh Yunus.

Quotes from Suara Merdeka article here.  h/t KP2KKN’s blog here.

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Pressure mounts on Goeltom and Urbaningrum

In this week’s Reformasi Newsletter, O’Rourke reports on developments relating to two high-profile corruption cases:

Senior figures in President Yudhoyono’s Partai Demokrat met to discuss the status of Party Chair Anas Urbaningrum, who increasingly suffers from revelations about budget kickback schemes. The party urgently needs to jettison Urbaningrum, or render him non-active, to rebuild credibility. Advisory Board members apparently beseeched Yudhoyono to demand Urbaningrum’s resignation, but the president has not done so. Complicating factors include internal party rivalries and a dearth of suitable replacements. Prolonging Urbaningrum’s tenure perpetuates damage to the party, with corresponding benefits for Golkar and PDI-Perjuangan. Nonetheless, signs suggest that the Anti-Corruption Commission (KPK) may soon indict Urbaningrum, which would trigger a change.

After a three-year investigation, the Anti-Corruption Commission (KPK) named former Bank Indonesia (BI) Senior Deputy Governor Miranda Goeltom as a suspect. The well-known policy-maker and society figure seems likely to serve at least one year in prison. The move brings the KPK one step closer toward identifying the source of the Rp24 billion in bribes paid to parliamentarians. Witness testimony has affirmed that the funds originated from Bank Artha Graha, owned by Tomy Winata.

Despite these signs of progress, O’Rourke comments that “KPK’s diligent record of securing convictions in corruption cases has exerted little appreciable deterrent effect on corrupt practices throughout state offices.”  My take on this is that the centre is not strong enough–that seriously cracking down on corruption requires a central government not only committed to corruption eradication but which has the political strength to enforce its position.  President SBY rules through a fragmented alliance of political parties, which creates plenty of opportunities for finding support to have corruption charges delayed or dropped.

Note: Kevin O’Rourke’s weekly newsletter Reformasi is an excellent overview of Indonesian politics and policy developments.  It is subscription only, however; more information is available at his website here.

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Money Politics in Local Elections

The national broadsheet Kompas reported comments from Constitutional Court Judge, Akil Mochtar, and Commission II member, Arif Wibowo, on the pervasiveness and negative effect of “money politics” or vote buying on Indonesia’s democracy.

Akil indicated that in a recent election in Waringin Barat City in Central Kalimantan, the Sugianto and Eko Sumarno ticket paid as much as Rp. 150-200,000 ($16-21) per “volunteer”:

“In general almost all candidates practice this [vote buying], only the method is different.  The goal is to influence voters so that they are elected” said Akil while attending a seminar on elections in Jakarta, Wednesday (25/01/2012).

“[The Sugianto and Eko Sumarno ticket] made arrangements to inappropriately pay people to volunteer in the campaign team. This is done by giving a volunteer certificate of the candidate to citizens together with Rp. 150 thousand – 200 thousand,” he explained.

“Pada umumnya hampir semua pasangan calon melakukan praktek ini (vote buying), hanya cara-caranya berbeda. Tujuannya untuk mempengaruhi pemilih, agar memilihnya,” jelas Akil dalam menghadiri seminar mengenai pilkada di Jakarta, Rabu (25/1/2012).

“Pasangan ini melakukan persiapan pendanaan secara tidak wajar untuk membayar warga yang menjadi relawan dalam tim kampanye. Hal ini dilakukan dengan memberikan sertifikat relawan pasangan calon urut nomor 1 kepada warga diserta dengan uang Rp 150 ribu – Rp 200 ribu,” jelasnya.

While Arif suggested it had become as widespread as a cultural practice and therefore very difficult to crackdown using the tools of law enforcement:

“Money politics has become a cultural practice.  If the government were to crackdown, there would be thousands of people who would be arrested.  While those who have received (money) includes tens of thousands.  I could argue that money politics has become a cultural practice that is not easy to tackle with laws.  I am confident to say that all elections involve money politics.  This is a chronic problem,” said Arif.

“Money politic ini jadi budaya. Kalau pemerintah mau tegakkan, ada ribuan orang yang mungkina akan ditangkap. Yang menerima juga puluhan ribu. Saya bisa menunjuk bahwa politik uang jadi budaya yang tidak mudah untuk ditegakkan secara hukum. Semua pilkada, saya berani mengatakan tidak ada yang tidak menggunakan uang. Ini masalah yang paling kronis,” pungkas Arif.

Regional corruption often has its origins in election campaigns.  Some of my informants from Central Java indicated that candidates must expend at least Rp. 10 billion (about $1.1 million) to become Bupati.  Those who win–and those who lose, but continue to hold positions in government–need to recoup these costs somehow and generally this involves corruption or extortion of one form or another.


Conference Presentation on Local Corruption in Indonesia

Back in August last year I presented at the ECPR bi-annual conference in Reykjavik.  My thinking has developed but I thought I’d post my presentation here for posterity!

Kabupaten Karanganyar at the Supreme Court

The Supreme Court recently ruled on two interesting cases from Karanganyar district in Central Java. One involves a former Deputy Bupati (Mayor) and one the husband of the current Bupati.

Sri Sadoyo Hardjomigoeno was Deputy Bupati from 2003-2008, although the case concerns corruption of the 2001 District Budget while he was Deputy Chair of the District Representative Council. In 2009 the local State Court acquitted Sri Sadoyo of both the primary and secondary corruption charges.  The local prosecutors Umum Endang and Dwi Nurhayati appealed straight to the Supreme Court–as Indonesian procedures stipulate that appeals skip the High Courts at the provincial level when a State Court acquits all charges.  Interestingly, the Supreme Court convicted Sri Sadoyo on the secondary charge of violating article 55 para 1 of the Penal Code (juncto article 65 para 1) but not the primary charge of violating article 2 para 1 of the Corruption Eradication Law (Law No 31/1999 juncto Law No 30/2001).  He was sentenced to 6 years imprisonment and a fine of Rp 100 million ($11,000) and ordered to pay compensation of Rp. 55,786 million ($60,000).  This is quite strong as sentences seem to have become lighter in recent years.  It’s not insignificant that he is no longer in power.  My research suggests that corruption prosecutions are more likely to happen after the suspect leaves office as he or she no longer has the political power (and funds) to prevent criminal proceedings from proceeding.

Tony Iwan Haryono is the husband of the current Bupati of Karanganyar, Ira Iriani.  He was prosecuted for corruption in relation to the construction of social housing in the district.  If I recall correctly, he acknowledged either in the State Court proceedings (or it might have been to the press during the investigation) that his wife was involved in the corruption and benefited from the transaction. Indeed, it seems highly unlikely that his wife, who, as I mentioned, is the current Bupati, was not somehow implicated.  However, the local prosecutors didn’t consider widening the investigation.  The Supreme Court rejected the appeal, and thus upheld the provincial High Court’s sentence of 4 years imprisonment, Rp. 300 million ($33,000) fine, and the payment of Rp. 3,247 billion ($360,000) compensation.  It will be interesting to see whether Ira Iriani faces the courts only after she leaves office (local elections are due in 2013).

h/t Adi from Suara Merdeka — see here and here.


The President’s commitment to corruption eradication

President SBY met with the heads of a number of anti-corruption civil society organisations today, including Indonesia Corruption Watch (ICW), Fitra and Transparency International Indonesia.  Yuna Farhan, Secretary-General of the Forum for Budget Transparency (Fitra), was quoted in Tempo as stating that the President is not making the most of the institutional mechanisms available to him.  He suggested that the president review the police and prosecutors every three months to ensure cases progress and do not become “jammed” (macet).  He also proposed five agenda items:

Yuna explained a five point agenda for the president to prioritise. They are  law enforcement, regional and natural resource corruption, bureaucratic reform, strengthening of civil society and anti-corruption education as well as budget accountability and efficiency.

Yuna menjelaskan, ada lima agenda yang harus diprioritaskan oleh presiden. Kelima agenda itu adalah penegakan hukum, korupsi daerah dan sumber daya alam, reformasi birokrasi, penguatan gerakan masyarakat sipil dan pendidikan antikorupsi serta akuntabilitas dan efisiensi anggaran.

Good to see that regional corruption is included (this is my research topic).  It is, however, unlikely that the president will directly interject himself into the specifics of police and prosecutor case processing, which is what the three month review would entail.  This would make it more difficult for him to stay above the political fray of corruption prosecutions.  It is also rather depressing that increasingly activists have to make their appeals to the president himself.  It suggests that those around him and within his party–who obviously enjoy significant discretion of which cases are brought to his attention–are only weakly committed to corruption eradication.

The Tempo article is available here (in Indonesian).

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A Lawyer President in 2014?

I have been assuming that Bakrie would become Golkar’s presidential nominee for the 2014 election and that (based on the current dearth of quality potential candidates) a Bakrie and Mega run-off election was a depressing outcome.  Of course a lot could happen between now and the election.  And last week Bakrie indicated that his nomination was not guaranteed:

“It is not yet certain that I will be declared as a putative presidential candidate. Golkar possesses a mechanism in putting forth a nominee, through internally conducted opinion polls. We will see the results later… Everything depends on the results of surveys that depict the preference of the people. Whoever is the figure, the candidate from Golkar will be the best son or daughter of the nation.”

O’Rourke also notes in his latest Reformasi Newsletter that there have been discussions between Golkar strategists and the current Chief Justice of the Constitutional Court, Mahfud Mahmodin:

Golkar’s ex-military strategists appear to be considering diverse alternatives for the party’s 2014 ticket, based on signs that retired generals aiding Aburizal Bakrie, the Golkar chair, have met recently with Constitutional Court Chief Justice Mahfud Mahmodin and Solo Mayor Joko Widodo.

As I said, it’s all a long way off, but this is an interesting development.  Should Mahfud (somehow) win it would be the first time Indonesia had a President with a legal background.  Sukarno studied civil engineering, Suharto was a general, Habibie was also an engineer, Megawati studied agriculture and psychology but didn’t complete either programs, and the current president, SBY, is a former general.

The next president is important for corruption prosecutions.  Not only does the President have considerable influence over the selection of the Attorney-General, National Police Chief and the commissioners of the Corruption Eradication Commission (KPK), but the signals the President sends vis-a-vis corruption prosecutions has an important impact on how legal officials and bureaucrats behave.

Note: Kevin O’Rourke’s weekly newsletter is an excellent overview of Indonesian politics and policy developments.  It is subscription only, however; more information is available at his website here.