Monthly Archives: March 2012

Lost in Central Kalimantan!

As just mentioned, I’m currently in Indonesia looking at some corruption cases involving the government’s large CDD program PNPM.  Right now I’m in a town called Puruk Cahu in Murung Raya district, Central Kalimantan, taking a look at the process and outcome in this case:

The Head of the Investment Coordination Board for Central Kalimantan, Salingkat Pardosi, said the person who took Rp. 919 million ($100,000) of funds from the National Program for Community Empowerment (PNPM) in Murung Raya in 2009 has been arrested.

“The perpetrator is a facilitator who changed his identity in Muara Teweh and fled to Demak regency, Central Java. In his hometown he built a luxury home, bought a car and established an internet cafe business,” said Salingkat Pardosi, in Palangkaraya, Tuesday (15/03/2011).

Kepala Badan Koordinasi Penanaman Modal Daerah Kalimantan Tengah, Salingkat Pardosi, mengatakan, pembawa kabur dana Program Nasional Pemberdayaan Masyarakat (PNPM) Mandiri Pedesaan Murung Raya tahun 2009 senilai Rp 919 juta sudah ditangkap.

“Pelaku merupakan oknum fasilitator, sempat mengubah identitas diri di Muara Teweh dan melarikan diri ke Kabupaten Demak, Jawa Tengah. Bahkan di tempat asalnya itu sempat membangun rumah mewah, beli mobil dan usaha warung internet,” kata Salingkat Pardosi, di Palangka Raya, Selasa (15/3/2011).

But the main reason I wrote this post is to show the map below.  I’m that pin in what can only be described as an Indonesian version of a frontier town.

It was about a 10 hour drive from the capital Palangkaraya.  I think this is probably one of remotest towns I’ve visited in Indonesia.

Kompas article: Fasilitator PNPM Bawa Kabur Rp 919 Juta.

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BPKP Identifies Misused PNPM funds in Kulonprogo, Yogyakarta

I am currently in Indonesia doing a short consultancy for the World Bank on the prosecution of corruption cases relating to the World Bank supported National Community Empowerment Program (PNPM).   In preparation I have been starring PNPM articles in my Google Reader feed but have not had a chance to add any to the blog.  One popped up yesterday so I thought I’d better add it!

The article in Suara Merdeka reports that a BPKP audit determined that only 50 percent of misused PNPM funds from three sub-districts have been returned.  In total BPKP determined that Rp. 243 million ($27,000) was misused and Rp. 110 million ($12,000) returned.  Interestingly the article reports that one sub-district facilitator disagrees with BPKP’s interpretation:

Chairperson of the PNPM UPK [Financial Management Unit] in Lendah sub-district, Eka Erawati, said the funds were actually used for operational of the TPK [Activity Implementation Team] at the village level and the empowerment of the LPMD (Community Empowerment Office). But in its audit, BPKP determined that [the funds] were used as an incentive for the collection of the program’s loans for productive economic activities.

Ketua UPK PNPM Mandiri Pedesaan Kecamatan Lendah, Eka Erawati mengatakan, dana tersebut sebenarnya digunakan untuk operasional TPK di tingkat desa dan pemberdayaan LPMD (Lembaga Pemberdayaan Masyarakat Desa). Namun oleh BPKP dalam auditnya dianggap sebagai insentif penagih program pinjaman usaha ekonomi produktif.

The micro savings and loan aspect of the program can often be quite problematic and the UPK seems to have quite a lot discretion in the use of its operational funds.  This is something that might need tightening in the program.

Suara Merdeka article: BPKP Temukan Penyimpangan Pengunaan Dana PNPM.

h/t KP2KKN’s media blog, here.

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Judicial Commission: 274 Complaints Received in Two Months

Another article on the Judicial Commission noting that it received 274 complaints about the performance of judges in the first two months of 2012.   The article notes that from 2005 to 2011 the Commission received 6,090 complaints but only recommended sanctions in 134 cases.  This would suggest that the two months are double the average over the past six years, although I’d imagine there were relatively few reports in the first years.  This article from Suara Merdeka (here):

The Judicial Commission (KY) in the first two months of 2012 acknowledged that it received 274 reports from the public on alleged violations committed by judges in the district State Courts, provincial High Courts, the Corruption Courts, and the others in Indonesia. This statistics were provided by KY spokesperson, Asep Rahmat Fajar, on Thursday (1/3).

He said that, in addition to receiving these reports, during the month of January 2012 until February 2012, the KY made inquiries into seven judges and 31 witnesses. “It has implemented a one-time Assembly of Honourable Judges (MKH),” said Asep.

As is known, from August 2005 until December 2011, KY received 6,090 reports from the public (excluding duplicate reports) on the behavior of judges and has issued 134 sanction recommendation.

Of that number, 79 sanction recommendations were sent to the MKH or proposed to the Supreme Court (MA). However, 55 recommendations were rejected because they involved the technical aspects of judicial decision-making although it has been sanctioned by the Supreme Court.

Komisi Yudisial (KY) dalam dua bulan pertama tahun 2012 mengakui telah menerima 274 laporan dari masyarakat, terkait dugaan pelanggaran yang dilakukan oleh Hakim di Pengadilan Negeri, Pengadilan Tinggi, Pengadilan Tipikor dan yang lainnya di seluruh Indonesia. Hal ini disampaikan Juru Bicara (Jubir) KY, Asep Rahmat Fajar, Kamis (1/3).

Dikatakannya, selain menerima laporan tersebut, bahwa selama bulan Januari 2012 sampai Februari 2012, telah dilakukan permintaan keterangan kepada 7 hakim dan 31 saksi. “Telah dilaksanakan satu kali sidang Majelis Kehormatan Hakim (MKH),” papar Asep.

Seperti diketahui, sejak Agustus 2005 sampai Desember 2011, KY telah menerima 6090 laporan masyarakat (di luar tembusan) mengenai perilaku hakim dan telah mengeluarkan 134 rekomendasi sanksi.

Kemudian, dari jumlah tersebut, sebanyak 79 rekomendasi diterima dengan dijatuhi sanksi dan diajukan ke MKH atau diambil alih oleh Mahkamah Agung (MA). Tetapi, 55 rekomendasi di tolak, karena dianggap termasuk ranah teknis yudisial walaupun telah dijatuhi sanksi oleh MA.

The low percentage of reports that lead to sanction recommendations and sanctions themselves suggests that those reporting to not fully understand the types of issues that this institutional mechanism can address, that the KY lacks the resources to properly follow-up on reports, or that the KY and the MA are too lenient on the judges.

h/t KP2KKN’s media archive blog, here.

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Judicial Commission: Weak Investigations and Indictments Facilitate Corruption Acquittals

Some interesting comments yesterday from the Head of Judicial Commission’s monitoring body, Suparman Marzuki, acknowledging weak investigations (penyidikan) and prosecution (penuntutan) as a key reason for acquittals in corruption cases.  He also acknowledged that the Commission does not have sufficient resources to properly monitor the courts across the country.  The comments from detik.com (here):

“There are many possibilities the influence a judge’s ruling,” the Head of Monitoring and Investigation of the Judicial Commission, Suparman Marzuki, told AFP on Monday (05/03/2012).

According Suparman, acquittal may result from a weak investigation. In addition, the preparation of a weak indictments is also an important factor in deciding court’s decision.

“But there may also be mistakes in the judge’s ruling,” he continued.

In addition, Suparman acknoweledged that the lack of resources meant the agency [Judicial Commission] is unable to cover all regions of Indonesia.

“Ada banyak kemungkinan yang terjadi dalam putusan hakim,” kata Ketua Bidang Pengawasan Hakim dan Investigasi Komisi Yudisial, Suparman Marzuki, kepada detikcom, Senin (5/3/2012). 

Menurut Suparman, putusan bebas bisa saja diakibatkan dari proses penyidikan yang lemah. Selain itu, proses penyusunan surat dakwaan yang tidak kuat juga menjadi faktor penting majelis dalam memutuskan seseorang.

“Tapi boleh jadi ada yang nggak beres dalam putusan hakim,” lanjutnya. 

Meski begitu, Suparman mengakui, jika kendala utama dari lembaganya adalah kekurangan sumber daya yang mampu meng-cover seluruh kawasan di Indonesia.

h/t KP2KKN’s media archive blog, here.

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Corruption and Lobbying in the United States

Ezra Klein, a policy wonk who blogs at the Washington Post (see here), has an interesting article in the current edition of The New York Review of Books on lobbying and its relation to corruption in the United States Congress.  Drawing on the books Capitol Punishment: The Hard Truth About Washington Corruption from America’s Most Notorious Lobbyist and Republic, Lost: How Money Corrupts Congress—and a Plan to Stop It, he suggests that corruption where lobbyists make political donations in exchange for the votes of Congress men and women is not the most common form of influence.  These two quotes summarises what Ezra argues is the dominant form of lobbying:

If the only possible “corruption” were the corruption regulated by bribery statutes, then I’d be the first to insist that ours is not a corrupt Congress.
Hall and Deardorf proposed an alternative: lobbying, they argue, is

“a matching grant of costly policy information, political intelligence, and labor to the enterprises of strategically selected legislators. The proximate objective of this strategy is not to change legislators’ minds but to assist natural allies in achieving their own, coincident objectives.” […]

In this model, the point of lobbyists is not so much to change votes as to change the legislative agenda. Perhaps you are a legislator interested both in reforming the nation’s drug laws and in cutting taxes on large corporations. If you focus your time on tax cuts for large corporations, you’ll get an enormous amount of money, aid, and attention from lobbyists. If you spend your time on drug policy, you’ll be ignored and your campaign will be underfunded.

It’s a very interesting form of corruption, and one completing different to that which is commonly practiced in Indonesia–although some of my informants did discuss a social aspect to deal making.  One of the reasons I think that corruption as practiced in Indonesia is so debilitating is because it displaces the role of ideas and evidence in the making and implementation of public policy.  Klein, in contrast, suggests that the process of idea formation, and the collation and dissemination of evidence has been effectively captured and monetised by lobbyists. But he argues in the last third–somewhat in contradiction to the first third–that the lobby industry is less effective when it comes to issues that the public pays attention to and cites the recent healthcare and financial services reforms as examples.

I think there’s a counterfactual problem with these examples.  It seems he’s basically arguing that these reforms would have been much more pro-industry if they were not in the public eye.  But I think he should be comparing what the outcome might have been if there was high levels of public interest–which one would expect for such critical reforms–and much less industry lobbying.

The article is available here: Our Corrupt Politics: It’s Not All Money

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Suspected Mark Up of 6 Sukhoi Fighter Jets

Interesting to see whether this case goes anywhere. PDIP lawmaker and Deputy Chair of Commission I for Defence, Tubagus Hasanuddin, has suggested that 6 Sukhoi fighter jets purchased in 2010 may have been marked up to the tune of $50 million.  These quotes from Kompas.com (here):

Vice Chairman of the House of Representatives Commission I, Tubagus Hasanuddin, suspects prices in the government’s procurement of six aircraft types Sukhoi SU-30 MK2 were inflated or marked up.

Tubagus explained that at the end of 2010 the Parliament approved the purchase of six Sukhoi aircraft worth 470 million U.S. dollars from the Russian government. The Russian government, he said, provided state credit of 1 billion U.S. dollars.  […]

Tubagus added, based on the explanation of Rosoboron [the Russian defence export agency], the price of Sukhoi SU-30 MK2 per July 2011 was about $60-70 million per unit. Whereas the price of Sukhoi previously purchased was only $55 million per unit.

If one uses the highest price of 70 [million] dollars, he said, the maximum price is only $420 million for the six units. “The question is why did we have to use PT X as a broker?  Though there are Russian representative office in Jakarta. Why is there a price difference of up to 50 million dollars?” Said Tubagus.

Wakil Ketua Komisi I Dewan Perwakilan Rakyat Tubagus Hasanuddin menduga ada penggelembungan harga atau mark up dalam pengadaan enam pesawat tempur jenis Sukhoi SU-30 MK2 oleh pemerintah.

Tubagus menjelaskan, akhir 2010 DPR menyetujui pembelian enam pesawat Sukhoi itu seharga 470 juta dollar AS melalui kerja sama dengan pemerintah Rusia. Pemerintah Rusia, kata dia, menyediakan state credit sebesar 1 miliar dollar AS.  […]

Tubagus menambahkan, berdasarkan penjelasan pihak Rosoboron, harga Sukhoi SU 30-MK2 per Juli 2011 sekitar 60-70 juta dollar AS per unit. Harga Sukhoi yang dibeli sebelumnya hanya 55 juta dollar AS per unit.

Jika memakai harga tertinggi yakni 70 dollar AS, kata dia, maksimal harga hanya 420 juta dollar AS untuk enam unit. “Pertanyaannya mengapa harus menggunakan PT X sebagai broker? Padahal ada perwakilan Rusia di Jakarta. Mengapa ada perbedaan harga sampai 50 juta dollar AS?” kata Tubagus.

 He has suggested that KPK should investigate.  I wonder if they dare?
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Make Corruptors Poor!

There was a series of articles about support–including from the President–for impoverishing those convicted of corruption. The idea being that those convicted of corruption would have their assets seized and that the possibility of poverty would deter politicians, civil servants, and others from engaging in corrupt transactions.

This from Luky Djani, Deputy Secretary General of Transparency International Indonesia, as quoted in Suara Merdeka (here):

“If we use all our legal instruments we can impoverish corruptors,” said Transparency International Indonesia Wasekjen, Luky Djani in Sindo Radio discussion at Warung Daun, Jl Cikini Raya, Central Jakarta, Saturday (3/3).

According to him, making them poor criminals will provide a scary “role model” for those who wish to engage in corruption. [This strategy of] impoverishing the corruptors can be applied by the law enforcement agencies.

“It’s necessary to use a variety of legal instruments in order to not only obtain the maximum sentence but also to ensure their impoverishment,” he explained.

“Kalau kita menggunakan semua instrumen hukum kita bisa memiskinkan koruptor,” kata Wasekjen Transparency International Indonesia, Luky Djani dalam diskusi Sindo Radio di Warung Daun, Jl Cikini Raya, Jakarta Pusat, Sabtu (3/3).

Menurutnya, membuat koruptor miskin akan memberi “teladan” menakutkan bagi mereka yang ingin korupsi. Memiskinkan koruptor bisa diterapkan oleh penegak hukum.

“Harus menggunakan berbagai instrumen hukum, agar tidak hanya memperoleh hukuman maksimum tapi juga dimiskinkan,” jelasnya.

And this from the President as quoted in Kompas.com (here);

President Susilo Bambang Yudhoyono supports verdicts that impoverish corruptors. The decision of judges to confiscate all the property of those convicted of corruption could provide a deterrent effect. This penalty can also make people think twice before committing corruption.

“This makes the fight against corruption more effective through the emergence of a deterrent effect. Thus there is a preventive element. Thus we would expect that the number of those who wish to engage in corruption would decline.” said presidential spokesman, Julian Aldrin Pasha, Friday (2/3), at the Bina Graha, Jakarta.

Presiden Susilo Bambang Yudhoyono mendukung vonis yang memiskinkan pelaku korupsi. Putusan hakim yang menyita semua harta pelaku korupsi dinilai bisa memberikan efek jera. Hukuman ini juga bisa membuat orang berpikir ulang sebelum melakukan korupsi.

”Hal ini membuat upaya memerangi korupsi menjadi lebih efektif dengan timbulnya efek jera. Ada unsur preventif. Mereka yang ingin melakukan korupsi diharapkan semakin berkurang,” kata Juru Bicara Kepresidenan Julian Aldrin Pasha, Jumat (2/3), di Bina Graha, Jakarta.

I’m sceptical this would have much impact in the standard criminal justice system.  Like those who argue for the death penalty for corruption (which is something I should post about soon), this essentially amounts to increasing the possible punishment for corruption and hence the bargaining power of law enforcement agents in their deals with suspects.  The reaction of local politicians would probably be to invest in the central political connections required to block investigations.

h/t KP2KKN’s media archive, here.

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Former Democrat Bupati of Pematang Siantar Prosecuted

The former Mayor of Pematang Siantar in North Sumatra, Robert Edison Siahaan, is currently being tried in the Medan Corruption Court.  The prosecutors have demanded seven years for embezzling Rp. 10 billion ($1.1 million).  Not sure if the article means in one year or over a period of five years, but the article suggests this amounts to 70% of the local government’s annual budget!  This from detiknews (here):

The Public Prosecutor (JPU), Irene Putri, declared that Robert Edison Siahaan legally and convincingly proven to be personally involved in the corruption of money in 2007 from the Pematang Siantar budget worth Rp. 10 billion, of the total available budget of Rp. 14 billion.

In the case file 550 pages thick, Irene also presented the former Mayor’s modus operandi for corrupting the government budget between 2005 and 2010. This involved gathering all relevant SKPD officials (Local Government Work Units) and demanding that 40 percent of self-managed funds be placed into his personal account.

Dalam tuntutannya, Jaksa Penuntut Umum (JPU) Irene Putri menyatakan RE Siahaan terbukti secara sah dan meyakinkan melakukan pidana korupsi dana swakelola APBD tahun 2007 Pemerintahan Kota (Pemkot) Pematang Siantar senilai Rp 10 miliar lebih, dari total anggaran yang disediakan sebesar Rp 14 miliar.

Dalam berkas tuntutan setebal 550 lembar, Irene juga memaparkan modus Walikota Pematang Siantar periode 2005-2010 tersebut dalam melakukan korupsi. Caranya yakni dengan mengumpulkan seluruh pejabat SKPD terkait dan meminta 40 persen dana swakelola dimasukkan ke rekening pribadinya.

This is an interesting case for me because it highlights some of the difficulties of prosecuting a regional leader from the dominant ruling party. It’s significant that the prosecution is going ahead after leaving office and relinquishing his position as head of the Regional Leadership Council for the district.  I suspect, however, that KPK’s involvement was critical.  This is not mentioned in the current articles but was covered by Metro TV News last year–see here.  It’ll be interesting to see the court’s decision.

Note also that the case file runs to 550 pages! I’ve had to trawl through a couple of these files for the cases I’ve researched in Central Java.  At first I thought these must take armies to produce but more often than not it’s only a few key people who work hard and, perhaps most importantly, have support from their superiors.  For a first time investigator it would be daunting, but once you’ve done one or worked with someone who has, there’s no technical capacity reason why police and state prosecutors couldn’t produce complete investigations and produce these documents.

h/t KP2KKN’s media archive blog, here.

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