Special Report

`Authorized' racketeering
keeps nightclubs afloat

Untouched: Cars roll down the nightclub hub of Jl. Falatehan in South Jakarta at 10:50 p.m. on Tuesday. Outside of the Islamic holy month of Ramadan, the street draws scores of foreign nationals for the open prostitution on offer. The street is just 100 meters from the National Police headquarters. JP/Ricky Yudhistira
Untouched: Cars roll down the nightclub hub of Jl. Falatehan in South Jakarta at 10:50 p.m. on Tuesday. Outside of the Islamic holy month of Ramadan, the street draws scores of foreign nationals for the open prostitution on offer. The street is just 100 meters from the National Police headquarters. JP/Ricky Yudhistira

Pretty girls, a rich selection of alcohol, and rocking disc jockeys are not the obvious attraction that keep a nightclub in Jakarta afloat.

Nightclub owners have learned well that “buying” the thugs, the law enforcers and the local community are a guarantee of smooth and secure business.

Around 80 percent of expenses in the industry are spent on security matters - law enforcers, thugs and mass organizations - and community development, says Adrian Maulete, chairman of the Jakarta Association of Tourism, Recreation and Entertainment Businesses.

"Call it a raid or whatever you will," he says.

"The expense is specifically for the global context of security. This includes paying mass organizations to stay away from us.

"So don't be surprised if you get charged Rp 10,000 *US$1* for a Rp 2,000 bottle of water," he goes on.

"It's because costs for security and community development are huge." He points out the Islamic celebration of Idul Fitri, when nightclub managements buy dozens of cows and hundreds of goats to slaughter for the festivities.

"This goes to this community unit and that goes to that neighborhood unit," he says.

"Not to mention the amount that goes to local mass organizations."

Nightclub owners also have to set aside emergency cash for losses incurred during gang clashes or other violence that transpires in a business that caters in alcohol, drugs and sex.

Adrian cites the example of the management of the Stadium nightclub having to spend big to clean up in the aftermath of a violent clash that transpired last month between Maluku gangsters, killing an unofficial security guard.

The management, he adds, had to pay all the expenses for the funeral and compensate the family of the deceased and the injured.

In Indonesia, the cost of not conforming to these guidelines in a country where more than 80 percent of its citizens are Muslims, on paper at least, means certain bankruptcy.

"It's extremely important for nightclub owners to socialize in their communities, because in Indonesia, a nightclub is a foreign concept," Adrian says.

There are many ways for thugs and local communities to fold a nightclub that lacks the requisite attitude, including by deflating the tires of guests' cars and extorting them on their way out of the club.

The most extreme method is when local figures or competitors send a group of thugs to attack the club in a bid to frighten visitors and deter them from returning.

However, despite the risks and the whopping great fees paid out for security, most nightclub owners can still come away with a profit margin of about 40 percent, Adrian says.

No wonder, then, that many parties are trying to get a slice of the pie.

According to the association, the businesses usually grow by at least 15 percent annually, with 60 percent of the money circulating around the Tamansari district in West Jakarta, which covers nightclubs on Jl. Mangga Besar, Jl. Hayam Wuruk, Jl. Gadjah Mada, the Glodok shopping center and other areas in the vicinity.

The big player of the business in this area is none other than Rudi Rajamas, owner of the iconic Stadium, Malioboro, Rajamas, and Sumo in Kelapa Gading, according to industry players.

He also has shares in several other nightclubs in the area. "Rudi is a typical hard worker," says the former thug Anton Medan, who now runs an Islamic boarding school.

"He started out as an employee, then climbed his way up and gained the trust of the big boss there."

Another big shot in the business is Alex Tirta, who owns the iconic Alexis Hotel and entertainment center on Jl. Martadinata in North Jakarta, according to business players.

Several businessmen with close ties to the National Police top brass also have shares in almost all of the nightclubs in the West Jakarta and North Jakarta area. Nightclubs in these areas are usually packed with ethnic-Chinese clientele who often spend a lot to have the craziest fun in town.

In South Jakarta, nightclubs notably in Kemang and in office buildings of business districts are usually owned by the children of local tycoons and high-ranking government officials, targeting foreign nationals and local corporate executives as core customers.

Nightclubs in South Jakarta tend to be low-profile and less seedy that those in West Jakarta and North Jakarta, where drugs and organized prostitution are as much a part of the decor as the drinks.

Nightclubs that feature strip shows, organized in-house prostitution and drug trafficking usually make big "donations" to law enforcers just to stay in business, Anton says, adding, "But it's not just about the big money.

"The long-standing relations between the businessmen and law enforcers has created trust and friendship, allowing nightclubs to sell women and drugs."

The National Police have often denied allegations of colluding with nightclub owners who accommodate the selling of drugs and sex on their premises.

- JP/Rendi A. Witular and Andra Wisnu

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