Budget brokers behind legislator masks

KPK, the Corruption Eradication Commission, operating under its five new commissioners, recently apprehended a legislator from the ruling party, Damayanti Wisnu Putranti, in a sting operation. She was arrested for allegedly receiving SIN$ 33,000 as bribery from Abdul Khoir, a contractor who wished to secure projects from the Ministry of Public Works and Public Housing, or PUPR.

There have been an earlier strong indication that Damayanti pocketed as much as SIN$ 404,000. In DPR, the House of Representatives, Damayanti did not represent constituents from Maluku, where the aforementioned projects were designated. Instead, she was a representative from Central Java IX (Brebes, Slawi and Tegal). Her case gave strong indications that brokerage for budgeting and projects involving legislators across electoral regions and across parties is a common M.O. in Senayan.

Not that long ago, a similar case was charged against Dewie Yasin Limpo, another legislator from Hanura Party who were arrested by KPK for allegedly receiving SIN$ 177,700 from a businessman and top official in Deiyai Regency, Papua, where a micro hydro project is to be constructed in 2016. Dewie, meanwhile, was a legislator representing the electoral region of South Sulawesi, not Papua.

Now that KPK is expanding investigation on Damayanti's case to other possibly implicated legislators, it is strongly alleged that budget brokerage would not involve only a single politician. It is virtually impossible for a legislator to influence budget policy making process on the level of house commissions. Therefore, it’s most likely that other lawmakers are involved in supporting said projects and gained their reward in fees – often known as ushering fees. On the other hand, there are field operators who would directly arrange a list of projects for deliberation that need approval from certain commissions in DPR, depending on each working partner.

Apparently, in spite of a ruling by the Constitutional Court to annul the authority once employed by the DPR's Budget Committee to determine project specifications up to the third unit (activities and type of expenses), it did not deter rogue legislators to find loopholes to toy with project budgets. The double cases of Dewie and Damayanti, both legislators caught in their acts, are solid proof of the weak accountability system and mechanism in designing public policies, particularly on legislative budgeting functions.

A number of possibilities can explain why there are still loopholes left open to exploit their legislative position despite having some of their powers truncated by the Constitutional Court. Firstly, there have not been any breakthrough and singular approach imposed by the chiefs of DPR to limit the space for abuse of power among legislators, especially restrictions laid in ethical codes along with their enforcement. It's common practice for any legislator to meet business persons anywhere anytime, without anyone's knowledge, all on behalf of their function as a legislator. Second, there is no standard regulation in place that address conflict of interest among legislators in performing their duties, either in an enforced Law or any other relevant regulation, when in fact a regulation on conflict of interest is a crucial instrument to curb any chance of transactional politics among legislators that would inevitably manifest only in corruption and bribery.

It seems, the powers that be at Senayan urgently need to make a major breakthrough in order to battle corruption that are devouring it from the inside, as well as to restore public trust to this pillar of democracy.***

Freeport: Instant divestment, centuries of loss

“Only a donkey falls repeatedly into the same pit,” the old proverb seemed to constantly haunt any Indonesian administration with regards to policies in energy, particularly natural resources in oil and gas. In economic terms, this sector is quite strategic as it still contributes a large portion of state income, aside from its features of energy preservation, ecosystem as well as sustainability for future generations.

When engaging in cooperation on exploitation and management of natural resources, accordingly, these strategic aspects should emerge as the primary considerations. The required clause to sell 51% of shares to the state, also known as divestiture, is a manifestation of state sovereignty in the sector of natural resources.

Nonetheless, in reflection of past practices in the mining sector, for instance, the state often failed to manage divestment, while the process often have scandalous scents. Case in point, divest of national coal that involved PT Kaltim Prima Coal and PT Arutmin Indonesia which plunged government elites as well as politicians into a string of scandalous corruption, in addition to causing a significant amount of state loss. The same also happened in the divestment of copper at PT Newmont Nusa Tenggara, where up until 2015 the provincial administration of West Nusa Tenggara (NTB) had yet to receive any dividend, aside from loans.

In the context of long-term national interests, therefore, the option to divest 10.64% of shares at PT Freeport Indonesia (PTFI) for US$ 1.7b is clearly bad business. Especially considering that the PTFI contract will expire in 2021, when its management will automatically be handed over to Indonesian government. In the event that Indonesian Government choose not to buy the shares, they would only need to spend on compensation of investment in equipment and facilities, which will cost significantly lower than the currently offered share prices.

The public have already sensed something fishy in the process, particularly after the infamous scandal dubbed “Papa Minta Saham” (Daddy Wants Shares) that involved politicians and businessmen negotiating for extension of PTFI contract, a case which could be deduced as rent seeking politics. Instead of pursuing a contract extension which is permeated with elite interests, the Government should recalculate how much have PTFI been paying in royalties and taxes, and whether the paid sum corresponds with the actual account. In its negotiations with PTFI, the government should stand for the interests of the people, taking these points into consideration.

The alleged corruption scandal in PTFI contract extension process should bring the dawn of decisiveness for Jokowi's administration. For the record, ever since the first operation contract was signed in the 1960s up until now, Indonesia has never been presumed to have any capacity for self-managing the operation. Even when the contract is expiring, PTFI insisted on another extension, which they would probably keep doing until there is nothing left to extract. Jokowi's administration must muster the guts to say to PTFI that enough is enough and begin to manage natural resources themselves, while there's still quite an abundant left to manage.***

WEEKLY SUMMARY

• KPK Chief to push law enforcement officers capacity in fighting corruption - www.antikorupsi.org/Zps

• Transparency International Indonesia (TII) launches anti-corruption documentary - www.antikorupsi.org/Zpe

• Talks on closing Samad and Widjojanto cases should avoid traps - www.antikorupsi.org/Zpn

• For Anda & Bonita, corruption is not just about money - www.antikorupsi.org/Zph

UPDATE STATUS

January 21

• Four suspects of corruption on retention pool project in Muktiharjo Kidul were examined in another trial at Semarang Corruption Court

• Former judge at Medan State Administration Court, Dermawan Ginting, was found guilty of accepting US$ 5,000 of bribery from demoted Governor of North Sumatera Gatot Pujo Nugroho and wife Evy Susanti via lawyer Otto Cornelis Kaligis and M Yaghari Bastara Guntur or Gery. Ginting was sent to two years in prison and fined Rp 200m or another 2 months in prison.

• The State Attorney General of Mukomuko Regency in Bengkulu named four new suspects in the alleged corruption and misuse of the 2012-2013 poverty relief funds at the Regional Development Planning Office (Bappeda).

January 22

• Former Minister of Tourism, also former Minister of Energy and Mineral Resources, Jero Wacik, was charged with 9 years imprisonment and Rp 350m in fines, equal to a further 4 months in prison. He was also charged with Rp 19,790,560,224 for compensation, which could lead to confiscation of his assets should he fail to settle within one month. If his asset cannot cover the charge, it will be converted to another four years in prison.

• Former Chairman of the Maros Regency Electoral Commission (KPUD Maros), Andi Jufri, and his former secretary, Abdul Rahman, are facing a charge of 20 years imprisonment.

• The panel of judges at Bengkulu Corruption Court released one of three accused in the corruption case of state assets embezzlement in Mukomuko Regency, Bengkulu.

• Former Mayor of Palopo, Andi Tenriadjeng, was charged with a maximum sentence of 20 years behind bars and a fine of Rp 1b in a corruption of regional asset management cash funds for his municipality, worth Rp 8b.

• Governor of Banten, Rano Karno, was again questioned by KPK investigators in the alleged bribery to arrange a capital participation of PT BGD within the 2016 local budget for establishing Bank Banten.

January 25

• CEO of State Electricity (PT PLN), Sofyan Basir, was examined as witness by KPK in an alleged bribery for project budgeting in Deiyai Regency to a legislator from Commission VII in DPR, Dewie Yasin Limpo.

• Former General Manager of PT Hutama Karya, Budi Rachmat Kurniawan, was charged with a 5-year sentence and Rp 576.5m in compensation in corruption of the 2011 procurement and construction project of the Sailing Training and Education Center, phase III, in Sorong Regency.

January 26

• Damayanti Wisnu Putranti, a recently arrested suspect in the alleged bribery for infrastructure construction projects in Maluku Province, proffered to be a justice collaborator.

• South Jakarta State Court denied all pre-trial appeal challenges by RJ Lino on his status as suspect in the alleged corruption of quay container crane procurement at Pelindo II.

January 27

• KPK investigators questioned a legislator from Commission V in DPR, a member of the Golkar faction, Budi Supriyanto, as witness in the alleged bribery for infrastructure projects at the Public Works and Public Housing Ministry that implicated CEO of PT Windhu Tunggal Utama, Abdul Khoir, as well as another legislator, Damayanti Wisnu Putranti.