Party Demands Spur Corruption in Politics

Costly campaigns, increasing operational expenses and poor law enforcement make for a thriving graft culture

Disgraced Democratic Party treasurer Muhammad Nazaruddin answers reporters' questions after testifying before the Corruption Eradication (KPK) on August 8, 2013. (JG Photo)

Disgraced Democratic Party treasurer Muhammad Nazaruddin answers reporters’ questions after testifying before the Corruption Eradication (KPK) on August 8, 2013. (JG Photo)

High operational costs in politics are driving corruption in the Indonesian government, analysts say, as dubious sources of income make the situation impossible to supervise.

“Parties don’t have money, that is why they prompt their members working in the legislative and executive bodies to seek funds,” said Boni Hargens, a political analyst from University of Indonesia.

With recent political graft cases — such as those of former Democratic Party treasurer Muhammad Nazaruddin, serving a seven-year prison sentence for graft, and former sports minister Andi Mallarangeng, who has been named a suspect for corruption in a project to build a sports center — in the limelight, analysts are taking a look at the factors behind illicit funds.

In the latest case Rudi Rubiandini, head of upstream oil and gas regulator SKKMigas, was arrested last week on allegations of accepting $400,000 on behalf of the Democratic Party.

Crunching the numbers

A party’s financial affairs can be divided into two categories: income and expenditures.

A party’s income is comprised of its membership fees, financial assistance from the government and donations from the public.

Elected legislators at the House of Representatives have to pay fees of between Rp 3 million and Rp 25 million ($279 and $2,330) to help cover their parties’ costs.

For expenditures, parties have to cover operational costs and electoral campaigns.

Boni said that party members were responsible for covering operational costs, such as answering their constituents’ demands for building bridges and fixing roads.

Furthermore, from year to year, election campaign expenditures continue to climb to enormous amounts — a practice that critics have scrutinized as having little oversight.

“In practice, the funds used on campaigns increase drastically as elections draw near. With the open proportional system used right now, the candidates are trying to promote themselves by putting ads everywhere, especially if they are not well known,” said Titi Anggraini, executive director of the Association for Elections and Democracy (Perludem).

Titi explained that with the open proportional system, candidates running for legislative seats have to meet voters in person in order to secure their support. The budget for such activities is inevitably quite high.

“Some candidates say that you need at least Rp 800 million to be a member of the House of Representatives,” Titi said, adding that she doubted the reported amount came close to actual costs, which could be in the billions.

“The question is whether the amount is only calculated during the official campaign period or through the overall process,” she said.

“I think the amount is much more than that if we count the cost used outside the campaign period.”

Funding the path

With such rising costs, politicians face increasing pressure to raise more money. The Perludem director said that fund-raising methods varied, and might not be lawful.

“For incumbent candidates, the money is obtained illegally by manipulating the policies. They also receive illegal donations from political investors who target potential candidates,” she said.

Political investors are businesspeople who aim to get advantages in policies by sponsoring candidates and campaigns.

“Those investors usually come from the natural resources sectors. The policy making in the sector is controlled by influential politicians,” Titi said.

She added that while such activities were outlawed, the practice continued to thrive amid poor enforcement.

“Indonesia has not applied the campaign fund law professionally, openly or accountably. The law states that candidates cannot receive funds from foreign parties, state-owned corporations and unclear sources — if exceeding the limit,” she said.

A 2012 law states that a candidate can receive personal donations of up to Rp 1 billion, and up to Rp 7.5 billion from companies or other registered organizations.

In reality, donations often exceed the maximum amount, Titi said.

“When a violation occurs, there hasn’t been any enforcement that gives a deterrent effect. For example, if one candidate refuses to give full disclosure on the campaign fund, he can be disqualified. However, the quality of the report itself is not considered, whether the sources are valid,” Titi explained.

Cashing in

Current practices have evolved over years of corrupted politics, Boni said.

“The pattern changed after the KPK [Corruption Eradication Commission] was formed. In each institution, there used to be written and oral commands [to commit corruption], but now, since the KPK actively seeks to eradicate corruption, the command is given carefully because they’re scared of being wire-tapped,” Boni said.

Boni and Titi both cited concerns that political investors must be repaid once a candidate was elected to the House — a debt that is often settled by giving companies a favorable edge in policies.

“What happens now is the policies are set up somehow to look normal but actually it’s swarming with problems. If we look closely, it is corrupted all the way from the proposal stage to the implementation,” Boni said.

Corrupted policies, Boni said, not only harm the country’s economy, but also put the needs of businesspeople above those of the people.

“Corruption is a systemic matter. It doesn’t happen in the executive or legislative agencies. It’s an act done by the bureaucrats, parties and businesspeople together,” Boni said, adding that if a party member was chosen to be a minister, their deeper understanding of bureaucracy opened opportunities to corrupt the system.

  • Sebastian

    “The only way to reduce corruption permanently is to drastically cut back government’s role in the economy.”

  • Suratman

    I’m told the biggest customers for exotic european sports cars are the children of government ministers. Does anybody here seriously believe these criminals have amassed such great wealth on a government salary? Nothing will tell you more about a country than seeing a million dollar sports car negotiating huge potholes in a neglected road running through an impoverished kampung.