Fauzi Accused of Diverting $5.8m Into Jakarta Governor’s Campaign

By webadmin on 08:57 am Sep 19, 2012
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Ronna Nirmala & Markus Junianto Sihaloho

Just days before Thursday’s Jakarta gubernatorial runoff election, revelations have emerged that the administration of Fauzi Bowo may have laundered up to Rp 55 billion ($5.8 million) through welfare grants to finance his campaign.

Darwanto, a researcher with the nongovernmental Indonesia Budget Center, said on Tuesday that the signs of misappropriation were based on an investigation of grant payments by the city administration to charitable institutions and community organizations since May.

“Institutions or community groups with apparent political links to the incumbent received a total of Rp 17.14 billion in grants,” he said.

He added that all 12 recipient groups in this category were either known donors to Fauzi’s re-election campaign or had ties to the campaign team.

Darwanto also said the IBC found indications that grants totaling Rp 20 billion were given to institutions and foundations chaired by Sri Hartati, the governor’s wife.

“There was also Rp 18 billion in grants given to two institutions where the governor himself chaired the board of trustees,” Darwanto said.

Triple down

Other findings revealed in the IBC investigation included payments totaling Rp 225 million to eight institutions that turned out to be non-existent, as well as Rp 310 million to 10 institutions that had the same listed address, indicating that they were shell organizations.

There were also several institutions that received a combined Rp 140 million without even knowing that they were recipients of the city’s social welfare funding program.

“What’s really interesting, though, is that some institutions were offered funding by the governor’s campaign team, but were denied any money after they refused to endorse the incumbent’s bid,” Darwanto revealed.

“There were four of these institutions or community groups, which were expected to get a total of Rp 65 million.”

Darwanto said the IBC investigation was prompted by suspicions about the huge increase in grant payments being made this year by the Jakarta administration.

The IBC noted that in 2008, Jakarta earmarked Rp 367 billion in grants to social and charity organizations, while the figure rose to Rp 434 billion in 2010. No elections were held in either of those years.

This year, the city’s budget for grants tripled to Rp 1.3 trillion.

Paging the KPK

IBC researcher Roy Salam previously said that welfare grants were particularly prone to misappropriation by officials because there were no stringent requirements for accountability.

“The funding is determined by the regional head and its use is never detailed in the region’s annual accounting report,” he said.

“How this fund is used is at the discretion of the regional head and can easily be exploited to the advantage of incumbents seeking re-election.”

Arif Nur Alam, the IBC executive director, said his organization has collected substantial evidence indicating the alleged misappropriation by Fauzi’s administration. He planned to submit his information to the Corruption Eradication Commission (KPK) and the Elections Supervisory Committee (Panwaslu).

He said the evidence pointed to electoral violations as well as criminal embezzlement.

“We hope the KPK can follow up immediately on this report that there has been corruption by the governor in the management of the city budget for welfare,” Arif said.

Arif also criticized the Home Affairs Ministry for not keeping closer tabs on how regions allocated their welfare budgets, saying this case highlighted the need for a moratorium on discretionary grants that were not transparent or openly accounted for.

“This should serve as a warning to the central government,” he said. “There needs to be a policy in place whereby a moratorium on grants is imposed two years before a regional election. This is the way to prevent misappropriations for re-election funding.”

Bureaucrats on the prowl

The Indonesian Forum for Budget Transparency (Fitra) has also leveled allegations of budget irregularities by the city administration in connection with the gubernatorial election.

Fitra coordinator Uchok Sky Khadafi said on Tuesday that his group found evidence that billions of rupiah allocated for the election had been spent on questionable projects that are seemingly designed to allow bureaucrats to siphon off the money.

This included Rp 8.5 billion to build election monitoring posts across the city, including some on unpopulated land in the Thousand Islands district.

Uchok also cited the case of a project to provide food for polling station officials in North Jakarta. The bid of Rp 298 million was won by a catering service based in South Jakarta.

Uchok pointed out there were two companies that had submitted bids — of Rp 285 million and Rp 259 million.

He said that the higher bid was chosen because it allowed for a bigger kickback to the officials overseeing the project.

He said this project was typical of the myriad other projects linked to the polls, which he called “a windfall for the city’s bureaucrats.”

“No matter who wins the election, the bureaucrats in the Jakarta administration will be the ones who come out ahead,” Uchok said.

Justifiable funding

The city administration, however, has denied any wrongdoing with regard to the welfare grants, saying it can easily justify the marked increase in grants this year.

Sukri Bey, head of the Jakarta Financial Management Body (BPKD), said his office had repeatedly explained that there were a series of “large-scale activities” this year that the city was funding through grants, including sending a contingent of athletes to the National Games (PON) and an increase in school operational aid (BOS) for public and private elementary and junior high schools.

He pointed out that although the money for the BOS came from the central government, it was distributed by regional authorities through grants, under the terms of a 2011 decree from the Home Affairs Ministry.

“And finally, we’re also funding the election this year, including the operations of the KPUD [Jakarta General Elections Commission] and Panwaslu, which is done in every election through grants,” Sukri said.

Sidebar: Indonesia Budget Center Reveals Billions in Funding ‘Irregularities’ to Support Fauzi

The Indonesia Budget Center has released findings of what it calls
irregularities in allocations for grants and welfare funding, reportedly
farmed out to support Governor Fauzi Bowo’s re-election campaign. The
following are some of the findings:

Welfare funding:

Rp 11.9
billion given to 11 organizations, including four Betawi groups and the
Indonesian Council of Ulema, with direct ties to Fauzi’s campaign team

Rp 20 billion given to 10 organizations chaired by the governor’s wife

Rp 18 billion given to two organizations whose boards of trustees are
chaired by the governor

Rp 140 million withheld from nine recipients,
including eight Islamic foundations, previously approved for funding

Rp
65 million withheld from four recipients, including one school and two
Islamic foundations, because of their alleged refusal to support the
incumbent

Rp 135 million removed from funding for three Islamic
foundations

Grants:

Rp 240 million given to 10 organizations,
including five Islamic foundations, with direct ties to Fauzi’s campaign
team

Rp 310 million given to 10 recipients, including two Islamic
foundations and six police- and military-linked institutions, with the
same address

Rp 225 million given to eight recipients, including nine
Islamic foundations, that do not exist