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Graft probe: The fallen victors and the broken promises

  • Hendi Yogi Prabowo

Yogyakarta | Wed, March 6 2013 | 08:40 am

After the naming of former Prosperous Justice Party (PKS) chairman Luthfi Hasan Ishaaq as a suspect in the recent beef import bribery scandal, the Corruption Eradication Commission (KPK) once again made a bold move by naming former Democratic Party chairman Anas Urbaningrum a suspect for his involvement in the Hambalang graft case. Several legal and political scholars maintain that the KPK’s decision was influenced by a certain group of senior people in government who had a grudge against Anas.

The KPK has denied this speculation, stating that its decision was based solely on professional judgment without any external interventions. Similar to the beef import scandal for the PKS, many believe that the Hambalang scandal will prove to be the Democratic Party’s Achilles’ heel in next year’s election.

With a number of its high-ranking politicians, including the former chairman himself, allegedly involved in fraud, regaining public trust and winning the next election seems like a long-shot for the party.

As reported by mass media, several corruption suspects from the Democratic Party featured in at least one anticorruption advertisement as part of their party’s political campaign several years ago, which is now viewed by the public as a bitter irony. To use a business analogy, this is where the sellers (i.e. politicians) who, after receiving advance payments (i.e. votes) from the consumers (i.e. voters), fail to deliver the promised commodity (i.e. public goods and services).

The cause of politicians’ failures to deliver public goods and services has been the subject of many studies. Many of these studies argue that corruption is one major cause for an “agent” (i.e. a politician) failing to perform his/her duties to their “principle” (i.e. the people). In this situation, politicians are seen as acting rationally to maximize their own utility.

In so doing, they may be tempted to engage in “illegal product” transactions with third parties in which the politicians, in exchange for some financial reward, may offer to use the power of their positions in government to assist those parties to meet their own ends. The “product” in this case is the politicians’ assistance to the third parties.

Many political corruption cases are attributed to politicians’ “rent-seeking and self-serving” behavior as part of their rational mind-set according to which they weigh the costs and benefits of their actions. As prominent criminologist Donald Cressey proposed in a well-known study more than five years ago, “pressure” is a major cause of violating trust among otherwise honest people. For political parties, studies suggest that lack of funding puts a great deal of pressure on politicians to find alternative funding sources, some of which may be shady.

Historically speaking, since the fall of the Soeharto regime, the lack of political party funding has become a major problem, even for large parties. Despite several regulatory efforts by the government in the past few years, political parties are still struggling with this problem. The various regional elections, for example, often require participating candidates and their parties to spend a fortune on their campaigns to secure votes. Next year’s presidential election will undoubtedly increase tension between political parties and thus create more pressure to obtain funds to win the race.

Studies on Indonesian politicians have revealed that some chose to enter politics to pursue their personal interests instead of serving the public. Some seek the financial benefits of being in government while others, who were already wealthy, simply seek power and prestige. In relation to limited political party funding, evidence suggests that one alternative source of funding comes from the parties’ politicians themselves. Evidence also suggests that lawmakers, for example, often have to give a portion of their salaries and allowances to their parties. From a rational cost-benefit point of view, this means that the politicians need to compensate for their lost income by seeking alternative income sources.

According to various global studies, the most observable behavioral symptom of fraudsters is their lavish lifestyle, living well beyond their financial means. Apparently, such behavior is also commonplace in Indonesia. Many politicians are often seen living extravagantly, to a degree that even their high salaries as public officials cannot support. With these pressures, once an opportunity — albeit unjustifiable — to earn more income from their political position presents itself, they may be willing to take the chance to engage in corrupt practices.

The lack of sufficient legal deterrence is often thought to be a major reason for burgeoning corruption in Indonesia. Moreover, corruption cases investigated by the KPK cost the nation vast sums of taxpayers’ money.

In other words, those who indulge in corruption can become millionaires overnight from the proceeds of their offenses. Therefore, the fact that graft convicts who have gained enormous financial benefits often receive light sentences in Indonesia increases several-fold the “net benefit” of committing corruption in the country. Mixed with the pressure from the lack of political party funding, it is little wonder that many politicians at regional and state levels “rationally” decide to commit corruption.

Accordingly, reducing the “net-benefit” of corruption should be part of the nation’s antigraft strategy. To do so, which would include increasing sanctions on offenders, increasing the chance of detection and increasing the success rate of investigations and prosecutions, to name just a few, would be viable ways to increase the cost to graft offenders. Of course, there are other measures, such as nurturing an anticorruption mentality in the minds of the younger generation as well as changing the mind-set among the current generation about tolerating corruption.

The writer is director of the Center for Forensic Accounting Studies within the accounting program at the Islamic University of Indonesia, Yogyakarta. He obtained his Master’s and PhD in forensic accounting from the University of Wollongong, Australia.


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