Jakarta party graft 'inevitable'

IN barely 12 months as Indonesia's Democratic Party treasurer, Muhammad Nazaruddin gouged 6.04 trillion rupiah ($679.3 million) out of government contracts, according to preliminary analysis by Indonesia's main counter-corruption agency, KPK.

Mr Nazaruddin operated 154 companies, many with his wife who remains abroad and is about to be red-listed as a KPK suspect, and was involved in 31 suspected corrupt contracts with government agencies.

Mr Nazaruddin hasn't confirmed such figures. Sulking in his cell at police Mobile Brigade headquarters after being brought back from Colombia a fortnight ago, he refuses to speak to KPK investigators.

In contrast to his tirades while on the run, and to the relief of most political colleagues, Mr Nazaruddin claims: "I have forgotten everything. (KPK) doesn't need to investigate me, just give me a sentence."

But he has said enough already to ensure his own conviction, wreck the 2014 presidential ambitions of former best friend Anas Urbaningrum, and further weaken party founder Susilo Bambang Yudhoyono's credentials as a corruption-fighting president. (Mr Nazaruddin claims he paid the equivalent of $19m to fix Mr Anas's election as Democrat chairman last year; feeling that Mr Anas left him dangling when KPK bore down in May, "Nazar" turned ugly.)

At that point, though still only 32 and hardly known to voters outside his North Sumatra constituency, Mr Nazaruddin was one of the governing party's key executives.
During the two months he was mouthing off from abroad, Mr Nazaruddin insisted repeatedly that he looted ministerial contracts not for himself but for the party's benefit, and particularly for Mr Anas, its rising star.

Now all parties are trying to ignore the case's most significant lesson: the nature of Indonesian political financing makes political racketeering inevitable.
This week the national parliament begins a revision of electoral laws, but the draft contains no substantial funding reform.

Mas Achmad Santosa, from the Judicial Mafia Eradication Task Force, pointed out in a public call to Dr Yudhoyono that the Nazaruddin case goes to the heart of Indonesia's floridly corrupt political culture.

"The President must invite the leaders of political parties to conceive a way out that covers limits, restrictions, accountability and transparency for political funds, campaign funds, processes for arranging national and regional budgets, the selection of public officials and other such things," he urged.

Dr Yudhoyono has not responded, though yet again last week he proclaimed: "This is the moment to free Indonesia from corruption."

This was his Independence Day address to parliament, an institution that public opinion surveys consistently rate as one of the most corrupted.

But Marcus Mietzner, who is leading a study of Indonesian political funding for the US government development agency USAID, argues that the system itself guarantees corruption.

Funding demands on the main parties and on individual MPs are massive because the official funding system is completely broken, he says.

Party members' fees are negligible, most donations come illegally (because donors want to fund MPs or factions who will owe favours, not parties) and public funding is next-to-useless.

In 2009, a year marked by a huge surge in political spending as Dr Yudhoyono was voted back and a new parliament elected, public funding accounted for less than 0.5 per cent of the total, Dr Mietzner estimates.

In Australia, public funding accounts for about 20 per cent of political party expenditure, and in Germany 30 per cent.

"You have a combination of the collapse of the electoral funding system and an explosion in campaign costs," Dr Mietzner says. "The system is so dysfunctional, it justifies the parties doing whatever they do."

And they don't seem to want to change. Previous parliaments actually made public funding, and the takeover by "sponsors" and the parties' crooked fundraisers, far worse. At the outset in 1999, each vote earned qualifying parties 1000 rupiah, but by 2009 the rate had dropped to 108 rupiah - allowing for inflation, a reduction over a decade of 95 per cent.

As a consequence, parties lean heavily on their own MPs, who are required to donate 40-50 per cent of their salaries straight to the party. They in turn put themselves at the disposal of "sponsors" outside the parliament, and fixers inside such as Mr Nazaruddin. ‘The Australian’