Ministers tangled in Hambalang

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An investigative audit by the Supreme Audit Agency (BPK) reveals that Youth and Sports Minister Andi Mallarangeng and Finance Minister Agus Martowardojo are responsible for the misuse of funds in the graft-ridden construction of the Hambalang sports center in West Java.

In the BPK audit, Andi and Agus were considered guilty by omission for failing to follow regulations on government projects.

Andi, who is also a Democratic Party politician, was found to have breached a 2003 Presidential Decree that requires a minister to approve any procurements worth more than Rp 50 billion (US$5.26 million).

“AAM, as the youth and sports minister, has failed to perform his duty to determine the winner in the tender for the procurement project because he allowed the ministry’s secretary [Wafid Muharam] to usurp his authority,” the 93-page audit report states, referring to Andi’s initials.

The report further revealed that Andi’s lack of oversight had allowed Wafid to produce crucial documents for the construction project, including a multi-year contract that was later proposed to Agus.

“A lack of oversight has encouraged irregularities [surrounding the Hambalang construction project]. It’s not enough for the minister to claim innocence for procedural violations in the procurement project because he, [Andi] himself, should have been familiar with all the regulations,” BPK chairman Hadi Poernomo told reporters at a meeting with members of the House of Representatives on Wednesday.

The BPK audit report found Agus failed to appropriately exercise his authority by approving the budget proposal from the Youth and Sports Ministry without seeking prior clarification from Andi.

The BPK is expected to deliver its report to the Corruption Eradication Commission (KPK) and other legal institutions who will examine the violations.

“We will soon submit the result of our audit to the KPK and other law enforcement institutions for further investigation because they are the ones that have the authority to punish parties responsible for the oversight,” Hadi added.

Responding to the BPK’s plan to collaborate with law enforcement agencies, both ministers said they were willing to cooperate fully with authorities in the matter, as quoted by Antara news agency.

In the audit, the BPK also found evidence of alleged fraud in the form of fraudulent official documents used to clear the status of a 31.2-hectare plot of land for the sports center’s construction. It also found evidence that the project lacked a feasibility study on the construction site.

The BPK report also dropped a bombshell that could implicate the Democratic Party chairman Anas Urbaningrum.

The investigative audit found indications that Rp 63 billion in project funds were illegally wired to PT Dutasari Citralaras, a firm owned by Athiyyah Laila, Anas’ wife.

PT Dutasari Citralaras was subcontracted for the construction of the sports center by the project’s main firm, PT Adhi Karya.

According to the audit, Dutasari president Mahfud Suroso received the payment before construction began in 2010.

Other individuals alleged to have received illegal advanced payments are Teuku Bagus W.N. of PT Adhi Karya, who got Rp 189 billion, and R. Isnanta of the Youth and Sports Ministry, who allegedly received Rp 217 billion as an advanced payment.

Separately, KPK spokesperson Johan Budi said that BPK’s audit report would bolster the antigraft body’s case.

“The progress of the investigation depends on the evidence [that the KPK obtained]. And the KPK also expects the BPK to disclose how much the state stands to lose from the graft,” he said at a press conference on Wednesday.

Johan also said that the KPK would likely announce major progress in the Hambalang probe later this week.