Indonesia grapples with graft

Ongoing investigations of several politicians are raising questions about how best to finance campaigns in Southeast Asia's most robust democracy.

By Simon Montlake | Correspondent of The Christian Science Monitor

from the November 20, 2007 edition

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JAKARTA, INDONESIA - Spending public funds on information campaigns is routine for most state agencies. But the amount spent by Indonesia's central bank between 1999 and 2004 was surprisingly generous: about $500,000. More troubling was where the money allegedly went. The recipients, say anticorruption campaigners, were lawmakers on the oversight commission for Bank Indonesia.

Indonesia's Corruption Eradication Commission and the parliament's ethics council are now investigating the allegations that lawmakers extorted money to pass banking laws. Indonesian Corruption Watch, the group that obtained leaked documents from Bank Indonesia, says it has uncovered eight other similar cases of large bribes paid to parliament.

To a public weary of sleaze, the news that lawmakers were on the take barely made a ripple. Opinion polls suggest that parliament and political parties are held in low esteem by ordinary voters, who nevertheless have turned out in droves to vote since democracy was restored in 1999.

Behind the latest scandals is the thorny question of how political parties in Indonesia should be funded and whether political graft is undermining faith in democracy. Campaigners warn that if corruption goes unchecked, Indonesia – the world's largest Muslim-majority country and perhaps the most functional democracy in the Islamic world – may lose its democratic zeal.

It's a dilemma that goes beyond Indonesia, say analysts. In the absence of mass membership dues, many political parties rely on private donations or taxpayers' money to support their activities. Corporate giving is often dogged by accusations of influence-peddling. But making a case for public funding of Indonesian politicians to keep them honest isn't easy.

"It vexes people throughout the world, how to fund politics. What's difficult is that politics and democracy costs money, says Jeremy Gross, elections program manager at the Asia Foundation in Jakarta. "In a country where you have high levels of poverty, it's very difficult for politicians to say they're going to clean up politics by giving large amounts to political parties to function."

No help from higher salaries

Campaign financing is murky in Indonesia. While political parties oversee national campaigns, candidates are expected to raise their own money from private sources. Once elected to parliament, lawmakers sign over a percentage of their salary to the party and start looking for new sources of funding. Critics say those sources include kickbacks from lobbyists seeking favors and from state agencies like Bank Indonesia that grease palms to get legislation approved.

"Lawmakers use their position to raise money because that's what the parties ask them to do," says Ibrahim Fahmy Badoh, an investigator for Indonesian Corruption Watch. "Some of the money goes into their pockets, and some goes to the parties."

Raising salaries probably wouldn't stop the graft, though, as campaigns are getting more expensive, says Alvin Lie, a wealthy businessman turned outspoken lawmaker. He estimates that presidential candidates in the 2004 election, which went to two rounds, spent $900 million apiece.

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