Nazaruddin charged with money laundering

The Corruption Eradication Commission (KPK) on Monday declared Muhammad Nazaruddin a suspect in the 2010 purchase of a stake in flag-carrying airline Garuda Indonesia in an alleged act of money laundering.

It is the first time the antigraft body has laid money laundering charges since its establishment in 2003 —
a breakthrough that many hope can uncover further acts of corruption.

Nazaruddin is currently on trial for his alleged role in a Rp 191.7 billion scandal over the construction of the athletes’ village for the 2011 SEA Games in Palembang, South Sumatra.

The investigation has since led the KPK to suspect that Nazaruddin allegedly used the profits from the SEA Games project to buy shares in Garuda.

KPK spokesman Johan Budi said that it was the first time his office used the charges under the new Money Laundering Law, in which judges have the ability to place the burden of proof on Nazaruddin.

“It is easier to prove the money laundering charges, as the suspect must verify the legality of suspicious assets,” he told The Jakarta Post on Monday.

The disgraced politician is charged with violating Article 3 or 4 of the 2010 Money Laundering Law, which replaced the 2002 law.

The new law provides the KPK power to probe money laundering, along with corruption, as its main target. Previously, only the police and the Attorney General’s Office (AGO) could focus on such offenses.

The articles stipulate that anyone who changes the form of illegally obtained money in order to conceal its source can be punished with a maximum jail sentence of 20 years.

Johan said that the KPK also could “investigate the possible involvement of other people in the money laundering case”.

The KPK also accused Nazaruddin of violating the 2001 Anticorruption Law on accepting bribes or a gratuity. The offenses also carry a maximum jail sentence of 20 years.

Nazaruddin confidante Yulianis, the former deputy finance director of PT Permai Group, testified that Nazaruddin bought a number of shares of Garuda through five companies operated by the holding company. Permai Group was owned by Nazaruddin and allegedly used proxy bids to win projects that were subcontracted in exchange for bribes.

Yulianis said that around Rp 300 billion of Permai Group’s profits from government projects — including the SEA Games project — were used for the share purchases. PT Permai Raya Wisata bought 30 million shares worth Rp 22.7 billion, PT Cakrawala Abadi had 50 million shares worth Rp 37.5 billion, PT Exartech Technology Utama purchased 250 million shares worth Rp 124.1 billion, PPT Pacific Putra Metropolitan paid Rp 75 billion for 100 million shares and PT Darmakusuma acquired 55 million shares worth Rp 41 billion.

Trisakti University criminal law and money laundering expert Yenti Garnasih said that the new charges were the most effective method to track Nazaruddin’s allegedly illicit money, as well as to prove if the money was used at a Democratic Party congress in 2010.

Yulianis testified that she had taken Rp 30 billion and US$2 million from Permai Group, along with $3 million from “donations”, to be used during the 2010 party leadership election in Bandung.

In a telephone interview with the Post, Yenti also said that the charges could also help to recover state funds used in the alleged crimes.

However, she slammed the KPK for not laying money laundering charges sooner.

“The KPK was supposed to use it from the beginning, since the Law was enacted in October 2010,” she said. “Do not just send corruptors to jail and fail to trace their illicit assets.”

But Johan dismissed those claims.

“KPK investigators just found two pieces of evidence to charge Nazaruddin with money laundering,” he said.

The KPK has previously claimed that only the police had the mandate lay money laundering charges and said the Anticorruption Law meant that only gratuity cases could have the burden of proof placed on
a suspect.