Election Campaigns, the Perfect Playground for Money Laundering in Indonesia
In this year's elections, 185 million eligible voters are set to cast their vote. (JG Photo/Yudhi Sukma Wijaya)
Jakarta. With legislative candidates spending trillions of rupiah on their election campaigns, observers have warned against loopholes that could encourage corruption and money laundering by political parties and candidates.
"Money laundering is a complex issue. It is often committed by professionals, criminal organizations or individuals, who commit acts of corruption, drug trafficking and other crime with the purpose of hiding the proceeds of these crimes," University of Indonesia lecturer and political analyst Arbi Sanit told the Jakarta Globe.He claimed that money laundering and corruption were part of political parties' methods of raising campaign funds, although such moves may not necessarily have been detected.
Last year, the Financial Transaction Report and Analysis Center (PPATK) recorded a trend of suspicious transactions before and after the election season.
PPATK chairman Muhammad Yusuf reported that the incidence of these activities rose by 145 percent in 2004 and 2005, and 125 percent in 2008 to 2009. Both periods were election years.
More recently, the Corruption Eradication Commission (KPK) said it had received a report from the PPATK on suspicious transactions by current lawmakers.
"We are currently looking into the report," KPK deputy chairman Busyro Muqoddas said on Thursday, although he declined to reveal the details of the report or individuals mentioned by the PPATK.
PPATK deputy chairman Agus Santoso emphasized the report includes large sums of money.
Titi Anggraini, executive director of the Association for Elections and Democracy (Perludem), attributed such illegal practices to legislative candidates who were more focused on their personal interest rather than on their future responsibility, serving the needs of the society.
"Such motivations have made them eager to solely gain financial benefits after being elected. And as for money laundering, those caught committing it through bank transactions, are likely only the tip of the iceberg. Many use cash transactions
instead," she told the Jakarta Globe.
Meanwhile, Aleksius Jemadu, dean of Pelita Harapan University's Faculty of Social and Political Sciences, attributed the situation to political parties. "The deep-rooted issues in our political system is the permanent concept of trophy-seeking. In political parties, there are people with the mentality of a moneylender and broker, seeking for particular positions," he said.
Failed transparency
The General Elections Commission (KPU) issued a regulation in 2013 stipulating guidelines for the reporting of campaign finances by legislative candidates. Political parties are obliged to open special bank accounts for their campaign's fund, to report the income and expenses as well as endowments, and deliver their financial report to the KPU, while legislative candidates are required to report their campaign budget to their respective parties.
Titi commended this year's transparency plan as an improvement from the 2009 elections, as can now be more informed about political parties' expenditure through the KPU's official website. "The new regulation has forced political parties to reveal their campaign budgets and announce it to the public," she said.
In a report by Detik.com, the total campaign budget of all 12 political parties in this year's election stands at Rp 1.938 trillion ($170.5 million), comprising, among others, Rp 268.1 billion spent by the Democratic Party, Rp 256.3 billion used by the National Mandate Party (PAN), Rp 241 billion by the People's Conscience Party (Hanura), Rp 220.8 billion by the Indonesia Democratic Party of Struggle (PDI-P) and Rp 174 billion by the Golkar Party.
The Great Indonesia Movement party (Gerindra) spent the most on their campaigns with Rp 306.6 billion.
However, Titi expressed doubt that the regulation would be smooth sailing in its implementation, raising the possibility of false reporting by the parties. "The regulation still lacks a fool-proof verification method, enforcement and accountability, since there are high chances that [political parties] could be involved in illegal activities," she said, adding that with the loopholes surrounding the regulation, candidates still have the opportunity for foul play.
"I noticed one candidate who comes from a humble financial background or has an unexceptional job, but held a strong campaign with massive attributions. There is also a candidate who spent Rp 6 billion, but reported [expenditures] less than Rp 1 billion to the party."
Titi also cited a political party which reportedly spent more than its income, "and worse are candidates who choose to stay quiet, neglecting the responsibility in accurately reporting their spending for the campaign," she said.
Aleksius said there were challenges in combatting money-laundering but he emphasized the need for strong commitment from all institutions. "To experience a fair, honest election, to have clean legislative and executive officials, institutions, such as KPU, PPATK and KPK, need to collaborate together and fight against money laundering practices," he said.
He commended their efforts but suggested stepping up their monitoring ahead of indications of financial wrongdoing. "Once they have the smallest indication of suspicious activities, they should look into the cases right away. Otherwise, it will be a continual precedent in the upcoming elections as well as in regional elections."
With the existing possibility of money laundering, Aleksius urged constituents to make informed choices when voting for candidates and political parties by taking time to research their backgrounds, opinions and affiliations.
"Voters must make the effort to find out as much as they can about these candidates. They could tap into the Internet or approach those who have detailed knowledge about the parties and what they represent. Our country's democracy heavily relies on the quality of the representatives who hold pivotal positions in the House," he said.
On the other hand, Aleksius reminded all candidates in the election not to digress from their roles.
"[Legislative] candidates must not merely look for the money, or go after seats, most importantly, they need to fight for the citizens' interests. A good candidate is someone who has the passion and compassion to work as our representative, whose prominence and need for assistance are frequently neglected in this overwhelming democratic chaos," he said
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