Kostrad cleared of graft charges

JAKARTA (JP): The Army's Strategic Reserve Command (Kostrad) has been cleared of corruption charges over the use of massive financial resources managed by its foundation.

But Army Inspector General Maj. Gen. Djoko Subroto, who led the investigation, faulted past Kostrad leaders for mismanaging the foundation.

"Despite the administrative disorder, we found no irregularities in the way the foundation was run," Djoko said at a media briefing.

He said this was the conclusion from three separate audits by the Army, the State Audit Agency (BPK) and a public accountant Herman Yuwono.

The verdict effectively cleared Lt. Gen. Djadja Suparman, who commanded Kostrad for five months until March, of earlier allegations of corrupt practices.

His successor, Lt. Gen. Agus Wirahadikusumah, launched the investigation into how Djadja had managed to spend Rp 190 billion (US$21 million) of the foundation's money during his brief term at Kostrad.

Agus lost his Kostrad job in July just as he stepped up the investigation into the financial irregularities.

Both Djadja and Agus now occupy less prestigious posts in the military hierarchy. Djadja is commandant of the Joint Staff and Command School of the Indonesian Military (Sesko TNI) while Agus is a senior officer at the Army Headquarters.

Agus on Tuesday called the outcome of the investigation an attempt to deceive the public and Kostrad soldiers.

"The (Army) audit's results have deceived the people and the republic. This goes to show once more that the truth is hard to come by in Indonesia," he was quoted as saying by Detikcom.

The inspectorate general's findings were different from those determined from the audits by BPK and the public accountant, he said.

Agus called on TNI Chief Adm. Widodo A.S. and Army Chief of Staff Gen. Tyasno Sudarto not to accept the inspectorate general's report and to pursue the corruption investigation further.

Djoko told reporters that both BPK and the public accountant had given "no opinion" on the foundation's finances because of the administrative disorder.

"The foundation has never been audited since it was established in 1963. The way it was managed did not meet normal standards. Expenditures were based on assessments rather than on real calculations and Kostrad repeatedly changed its bank accounts," he said.

BPK has recommended that Kostrad show more transparency and greater public accountability in the way it manages the foundation because its assets should be considered a part of the government's nonbudgetary funds, he said.

Djoko said he had recommended that the Army leadership reprimand the Kostrad commanders and impose administrative sanctions on the foundation's treasurer as the person most responsible for the administrative chaos.

Kostrad was wrong for using the foundation's profit to finance military operations and purchase equipment, he said.

"The profits should have been used to improve the welfare of Kostrad's personnel," Djoko said.

The auditors said it learned that Kostrad received a dividend of Rp 160 billion from PT Mandala Airlines in August last year.

Kostrad subsequently spent more than Rp 74 billion to finance some of its military operations and for the procurement of officers' cars, antibullet vests and modern parachutes.

Another Rp 44 billion was put into Kostrad's trust funds which grew to Rp 189 billion, and another Rp 26 billion was spent on the provision of housing facilities for Kostrad personnel.

Djadja subsequently returned Rp 41 billion of the dividend money to Mandala, he said.

Djoko declined to account for the discrepancy between the Rp 160 billion dividend from Mandala and the more than Rp 200 billion that was spent and returned by Kostrad's leadership.

He said that last year was the first time Kostrad had ever received a dividend from Mandala because the airline had always operated at a loss prior to 1999.

When asked, he declined to disclose the wealth held in Kostrad's foundation or the businesses owned and managed by the foundation. (rms)