Optimization Money Turned Into Slush Fund - House Members Playing with Projects

The Corruption Eradication Commission (KPK) has suggested that the optimization funds be taken out of the state budget because it suspected they were prone to being misused by corrupt House of Representatives members. A number of legislators are alleged to have acted as brokers to champion certain projects to receive funding.

The optimization funds, which amounted to Rp 58.36 trillion in the 2016 revised state budget, were meant to be a change from macro-management so as to meet the state revenue target and increase the efficiency of state spending. The fund was supposed to be used for the additional spending of ministries and state institutions, as well as regional spending.

The project that was "managed" by I Putu Sudiartana, a House of Representatives Commission III member with the Democratic Party who was arrested by the KPK on Tuesday, was allegedly funded out the optimization funds. The project was the construction of 12 road segments in West Sumatra worth Rp 300 billion.

In his efforts to manage the project, Putu, who has been named as a suspect by the KPK, allegedly accepted Rp 500 million in bribes.

The KPK's deputy for prevention, Pahala Nainggolan, on Thursday (30/6/2016) said that there have been a few examples of corruption involving the optimization funds. For example, there was the case of former Commission V lawmaker Damayanti Wisnu Putranti who was arrested by the KPK in January for allegedly receiving a bribe linked to a road project in Maluku.

Former House budget committee member, Wa Ode Nurhayati, was accused of receiving a bribe for helping some regencies get onto a list of recipients for the 2011 regional infrastructure adjustment funds.

Influence

A budget committee member from the Hanura Party, Dadang Rusdiana, said that principally the allocation details of the optimization funds are determined by the Finance Ministry and House budget committee. However, in its formulation, House members who have extensive connections can influence the government's allocation decisions. Such House members may or may not sit on the budget committee.

House members who act as brokers would contact a regional government or a businessperson in a certain region who wants to receive some of the optimization funds. The House member then asks the regional government or businessperson to send him their proposals, which the legislator will then support by lobbying the central government.

Usually, as recompense, the House member would receive a bribe or kickback from the businessman or regional government seeking to land the project. "Whatever system is put in place, it will still be breached by some members of the House. The loopholes will always be there," Dadang said.

A budget committee member from the National Democratic Party faction, Johnny G. Plate, added that the malfeasance could take place at the state budget committee level because the optimization funds are deliberated and decided there. "However, usually the opportunity to lobby presents itself outside of the committee's deliberations. In fact, by the time it reaches the committee, it seems as though everything is in accordance to the rules," he said.

Commission V Chairman Fary Djemi Francis said that the project involving 12 road segments in West Sumatra, which was allegedly managed by Putu, was never discussed by Commission V when it was first proposed by a work partner. The project only came up after the discussion was continued by the budget committee and the government.

"Commission V also does not know the details because we have never discussed road projects in regions in our initial deliberations. If it is like that, then it could be that it was regional transfer spending that was deliberated by the budget committee," Fary said.

Meanwhile, Johnny Plate explained that the road project in West Sumatra managed by Putu had been included in the spending list of the Public Works and Public Housing Ministry. He said it is possible that the project was inserted at the work committee level at the budget committee because it did not come up in the initial proposal to the commission.

Budgeting mechanism

The KPK has recommended that the optimization funds be abolished. The result of the KPK's study of the funds in the 2014 state budget has shown that there was potential corruption in the form of requested programs at ministries and institutions through them. This is indicated by, among other things, the KPK's analysis of the preview of the process, planning and use of the 2014 state budget, which shows programs or activities that used optimization funds that were not proposed by the ministry or the institutions.

Furthermore, there were also programs that were not proposed to the Finance Ministry and the National Development Planning Agency and also were not in accordance with the strategic plan. Some of the final results of the programs that used optimization funds were unclear and could not be measured.

Generally, the KPK is also working to close the "dark" spaces in the House budgeting system that are often taken advantage of by project brokers. The KPK plans to recommend the formation of a team to oversee the crucial stages of budgeting, as well as the removal of the optimization funds from the state budget.

KPK deputy chairman Laode M. Syarif said that the KPK will propose the involvement of a KPK team as observers during every budget deliberation at Commission V, which oversees infrastructure. He hopes that Commission V can give information about the stages of deliberation that are prone to corruption so that the KPK can carry out prevention measures before corruption takes place.

"We realize that the KPK does not have the right to intervene in internal House affairs, but if the KPK is asked it will be ready to help so that such incidents do not happen again in the future," Laode said.

Regional Autonomy Monitoring Committee executive director Robert Endi Jaweng said that supervision over planning, budgeting and disbursement must be tightened.

Robert also said the Constitutional Court ruling of 2014 that stated that the House no longer had authority over certain activities and kinds of spending must be implemented.

"With that Constitutional Court ruling, the House cannot discuss a budget down to the details of a project. As termed, the authority of the House is over the budget politics. This means that the House's job is to ensure that the budget politics is in line with the national development priorities," Endi said.

However, the arrest of Putu and a number of other House members by the KPK for allegedly accepting bribes linked to certain projects indicates that House members still have a say over everything, down to the details of the project.

House speaker Ade Komarudin said that he does not mind if the supervision of the budget deliberation process is stepped up. "Maybe tighter supervision can be done of the budget deliberation process, from the commission to the budget committee. Prevention is needed because the loopholes are always around there," Ade said.

If the optimization funds prove to bring about more corruption in the House, Ade proposed that the situation be resolved by using budgeting and macro-assumption determining models that are more accurate. "Of course, this must be discussed with the other House speakers, as well as with the finance minister," Ade said.

National Development Planning Minister Sofyan Djalil said that to prevent the state budget from becoming a corruption minefield, the government is trying to focus on funds and programs that are the priorities. The government is also trying to do the same at the central and regional levels.

source Kompas, Friday, July 1, 2016