Tuesday, March 25, 2008, Vincent Lingga, The Jakarta Post, Jakarta
Profit, according to auditors, is an opinion, a matter of definition. You can state profit as gross earnings or net income, after-tax profits or earnings before interest and depreciation, depending on which of your stakeholders you want to impress.
But cash is real, which makes it the king.
So when senior state prosecutor Urip Tri Gunawan allegedly wanted a bonus for a "job well done" he demanded it in cash and in American dollars. Gunawan was arrested by a special team of the Corruption Eradication Commission (KPK) early this month with US$660,000 in $100 bills in a carton in his van as he exited the home of Sjamsul Nursalim, the former controlling owner of the now defunct Bank Dagang Nasional Indonesia (BDNI).
Two days before Gunawan's arrest the Attorney General's Office decided to clear Nursalim of all charges of corruption and other crimes related to the Rp 28.4 trillion ($3.05 billion) in liquidity credits BDNI obtained from Bank Indonesia during the banking crisis in 1998.
Gunawan led the team investigating Nursalim.
Earlier in September, Irawady Joenoes, a member of the Judicial Commission, was arrested by a KPK team at a house in South Jakarta with $30,000 cash in his pocket and Rp 600 million in bank notes stashed in a bag. The South Jakarta District Court ruled last week the money was a commission from businessman Freddy Santoso who had just sold a piece of land worth more than Rp 46 billion to the Judicial Commission.
Joenoes was sentenced by an anti-corruption court last week to eight years imprisonment.
In March, 2007, a joint team of the KPK and the AGO searched the home of Widjanarko Puspoyo, former chairman of the National Logistics Agency (Bulog), who was then facing corruption charges, and found hundreds of millions of rupiah stashed into a big bucket covered with wet laundry in a bathroom.
The South Jakarta District Court sentenced Puspoyo to 10 years in jail in February.
In 2003, after Bank Indonesia's (central bank) board of governors decided to give about Rp 31.50 billion to the House of Representatives to "facilitate" the deliberation of a central bank bill and to fund a public opinion campaign to improve the central bank's image, the money was delivered to House members in rupiah notes.
A senior central bank executive carried the cash in a big suitcase to a room at the Hilton (now the Sultan) Hotel.
Bank Indonesia Governor Burhanuddin Abdullah and two other senior executives of the central bank have been declared corruption suspects in relation to the case.
These are just a few examples of big cash transactions that we know about. Numerous other huge cash deals involving ill-gotten money derived from corruption and other crimes remain unknown or simply ignored by the authorities.
Welcome to the land where big cash transactions are still the rule rather than the exemption and money laundering is the big game in town.
Cash deals are one of the most popular modes of transaction for corruptors and other big criminals because the anonymity of cash limits exposure, does not leave a paper trail and cannot be uncovered by tax officials.
But how can all these huge cash transactions have continued after the enforcement of the 2002 law on money laundering, which restricts big cash withdrawals and scrutinizes other forms of dubious dealings?
Indonesia's anti-money laundering efforts have remained feeble due to a lack of cooperation from the National Police and AGO. Even though the Financial Transaction and Report Analysis Center (PPATK), which in other countries is commonly known as the financial intelligence unit, has reported thousands of suspicious transactions to the National Police, only two or three people have been brought to court on charges of money laundering.
The PPATK has spent almost six frustrating years practically fighting single-handedly against money launderers with little support from law enforcement bodies such as the National Police and Attorney's General Office.
The corrupt mentality within the law enforcement agencies, such as the National Police, rather than inadequate technical competence to investigate complex financial transactions, is mainly to blame for the weak enforcement of the law on money laundering.
Cooperation between law enforcement agencies and financial service companies and other government institutions such as the customs and tax services and the stock market watchdog is vital for effective enforcement of the money laundering law because information sharing is the brain of the anti-money laundering drive.
PPATK chairman Junus Husen came out with a major disclosure in August, 2005, saying there were strong indications of money laundering involving hundreds of billions of rupiah related to the personal accounts of 15 non-commissioned officers and generals of the National Police.
But not a single case has reached the court.
The problem is the PPATK is only authorized to analyze reports on suspicious transactions from financial institutions and to submit money-laundering cases to the police for further investigation and prosecution.
President Susilo Bambang Yudhoyono should act firmly to strengthen cooperation among all law enforcement agencies in the anti-money laundering drive. This campaign is truly an important component in the fight against corruption, tax evasion and numerous other crimes. The crimes covered by the law on money laundering are quite diverse, hitting almost all major sources of dirty money including corruption, drug trafficking, smuggling, bribes, banking crimes and human trafficking.
It is also easier to construct criminal cases through the law on money laundering than the anti-corruption law, because the former legislation puts the burden of proof squarely on those suspected of involvement in suspicious transactions.
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