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‘Political investors’ grease Indon politics

What accounts for Indonesia’s rash of big corruption cases? One explanation is that modern election campaigns are costing more than candidates or parties can afford. So they’re tapping big and often illegal contributions from local and foreign businesses.

Recent graft cases include the former Democratic Party treasurer Muhammad Nazaruddin, now serving a seven-year prison sentence, and former sports minister Andi Mallarangeng, named as a corruption suspect in a mega-project to build new sports facilities.

And last week saw the arrest of Rudi Rubiandini, head of oil and gas regulator SKKMigas, suspected of taking a $400,000 bribe ‘on behalf of the Democratic Party,’ the Jakarta Globe said.

‘In practice, the funds used on campaigns increase drastically as elections draw near,’ said Titi Anggraini, executive director of the Association for Elections and Democracy (Perludem).

Coming elections were also linked to this year’s choking haze from land-clearing fires in Indonesia.

‘There is a link between rampant corruption and today’s forest fires,’ Emerson Yuntho of Indonesia Corruption Watch told the Straits Times (Singapore).

The granting of logging permits spikes ahead of elections, Yuntho said, so local politicians can raise campaign funds.

Fires in Indonesia last month blew dense smoke into Singapore and parts of Malaysia.

While Incumbents can raise money from donors by manipulating legislation, new candidates are sometimes targeted by ‘political investors.’

‘Those investors usually come from the natural resources sectors,’ Titi Anggraini, executive director of the Association for Elections and Democracy (Perludem), told the Jakarta Globe. ‘The policy making in the sector is controlled by influential politicians,’ she said.

Enforcement of campaign funding laws  is lax.

Candidates aren’t allowed under a 2012 law to take money from foreign sources, for example, but they often do.

Contributions from individuals are legally limited to $93,000, and about $700,000 from companies. But reporting of contributions is spotty.

‘Political investors’ expect repayment once the campaigns are over.

Successful candidates often settle their debts ‘by giving companies a favorable edge in policies,’ Titi said.


Richard L. Cassin is the Publisher and Editor of the FCPA Blog. He can be contacted here.

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