For one, the Corruption Eradication Commission (KPK) plans to submit findings that point to potential money-laundering offenses by hundreds of taxmen, KPK deputy for graft prevention Pahala Nainggolan said on Thursday.

Speaking to reporters in Jakarta, Pahala said the KPK had flagged 134 tax officials with stakes in 280 companies in varying sectors, including tax-consulting services. He said investigators were looking at firms that pose a greater risk of corruption, such as those offering ways for taxmen to receive bribes while avoiding detection.

“If they [receive money] through a bank transfer, it will show up in their wealth reports. But if they do it through a company, it would be [difficult to trace] because the KPK has no jurisdiction over the company’s finances,” he told reporters in Jakarta.

Part of the problem, he argued, is that prevailing laws and regulations, such as Government Regulation No. 94/2021 on income taxes, do not outright ban civil servants from owning stakes in companies, making them particularly prone to conflicts of interest.

Pahala also said that most of the 134 staff flagged did not include their ownership of companies in their annual wealth reports, while some have these stakes listed under the names of spouses or other members of their families.

He said the KPK would hand over the results of the probe to the Finance Ministry’s Inspectorate General on Friday.

 

Widening scandal

The probe offers another glimpse into the complex web of white-collar crime within the ministry’s ranks, which was blown wide open after an aggravated assault case put the spotlight on mid-level tax official Rafael Alun Trisambodo.

Rafael’s vast wealth, paraded on social media, prompted an investigation by the KPK. The Financial Transaction Reports and Analysis Centre (PPATK) later found 40 bank accounts worth a total of Rp 500 billion (US$32.5 million) linked to Rafael, leading to his eventual firing.

He is likely to be the first in a flurry of tax and excise officials to be put to the sword, with Coordinating Political, Legal and Security Affairs Minister Mahfud MD disclosing that Rp 300 trillion in “suspicious” cash flows had been flagged at the Finance Ministry since 2009, implicating 460 officials.

The announcement on Wednesday shocked the nation, but Mahfud insisted that it was bound to be uncovered in this era of “open information” and social media.

In the latest case to infuriate the public, PPATK head Ivan Yustiavandana said his office had found indications that another regional customs official, Andhi Pramono, had hired professional money launderers to manage his assets. Andhi had previously been flagged by authorities for suspicious transactions.

Ivan declined to elaborate on the total value of the transactions, but said that the sum was “huge” and that the PPATK had alerted the KPK about it in early 2022.

Andhi, the head of Makassar’s excise office in South Sulawesi, is to be summoned by the KPK next week. His office confirmed on Thursday that he was heading to Jakarta.

The PPATK’s Ivan acknowledged that the Rp 300 trillion figure that Mahfud disclosed was correct, and that the PPATK had reported these findings to the Finance Ministry.

“[The ministry] might not understand how we came to this figure, but we can guarantee its validity. The numbers are correct, and there are indications that these transactions contravene the law,” he told The Jakarta Post on Thursday.

 

Under fire

While Finance Minister Sri Mulyani Indrawati faces increasing pressure to discipline her staff, observers have commended her commitment to stamping out graft in her ministry, which was notoriously corrupt in the past.

Others have criticized Sri Mulyani and called for her to step down or take full responsibility for the corruption.

With the scandal occurring just as the nation entered its annual tax-filing season, growing public disillusionment has fueled more investigations in search of others who appear to be enjoying wealth beyond what their public office could provide.

On Thursday, Sri Mulyani accompanied Jokowi to his hometown of Surakarta, Central Java, where the President made an impromptu stop at a tax-filing facility to see the progress made this year and to promote the digital process.

The finance minister looked at ease alongside the President, a far cry from her emotional appearance on a talk show on national television on Sunday, where she visibly expressed her “deep sense of disappointment”.

At the time, Sri Mulyani insisted that the institution was not taking the recent string of scandals lightly, while also calling on the public to support her battle against graft.

“Restoring public trust in the Finance Ministry is not an easy job; this is a challenge that we must face,” she said during the talk show.

“But we cannot do it alone. That is why we have been open to working with the KPK, the PPATK and whoever else is willing to help us.”