Pertamina case may lead to legislator's prosecution

Pertamina case may lead to legislator's prosecution

Fitri Wulandari, Jakarta

Legislators receiving money from state oil and gas firm PT
Pertamina for a recent overseas trip could face up to 20 years in
prison if they fail to explain the payouts to the government-
sanctioned anti-corruption commission (KPK) within a 30-day
period.

KPK deputy head Erry Riyana Hardjapamekas said on Friday the
lawmakers had to prove the funds were not illegal gratuities from
Pertamina.

According to Law No. 20/2001 on corruption, any form of
gratuity given to government employees or state officials is
considered a bribe if it is related to one's position and goes
against one's duties or obligations to the public.

The law says those receiving gratuities worth Rp 10 million or
more must be able to prove they are not bribes.

"If they fail to report (the money) within 30 days, they could
face a four to 20-year jail term," he told The Jakarta Post.

Erry made the comments amid the controversy surrounding the
sale of Pertamina's two giant oil tankers.

More than a dozen legislators in the House of Representatives
Commission VIII on mining and energy recently made a trip to Hong
Kong to meet representatives from Goldman Sachs, the consultant
for the sale process. The group later traveled to South Korea to
meet with Hyundai Heavy Industries, the manufacturer of the
tankers. The lawmakers, some accompanied by their wives, claimed
the trip was crucial to obtain accurate information about the
sale before deciding whether to recommend or reject it.

However, the Kompas newspaper then reported Pertamina had
financed the trip, raising suspicions it was a bribe to obtain
House approval for the sale of its two Very Large Crude Carriers
(VLCCs).

At first, the legislators insisted the Rp 150 million trip was
paid for by the commission's budget. However, after media reports
revealed a internal memo from Pertamina that indicated the trip
was funded by the company, the lawmakers acknowledged they had
"borrowed" the money but would later repay it.

However in an apparent contradiction, Pertamina, while
admitting such an internal memo existed, on Friday insisted it
did not finance the trip.

"The memo existed but we annulled it because it was not
correct. We did not finance the legislators' trip," president
director Ariffi Nawawi said on Friday.

Erry said the KPK would investigate whether the memo, which
was leaked to the press, was authentic.

After the scandal broke, the House decided to reject the sale,
saying it would be more beneficial for Pertamina to keep the
tankers in the long term. However, they then gave the government
final authority to make the decision.

State Minister of State Enterprises Laksamana Sukardi gave the
go-ahead for the deal, saying Pertamina needed the funds to
resolve its cash flow problems.

Meanwhile, Pertamina said on Friday it had already began the
sale of the vessels to Norway's Frontline Ltd.

Ariffi said Frontline had placed a 20 percent downpayment and
bid bonds worth US$5 million for each vessel. Frontline was the
highest bidder in the tender, agreeing to buy the vessels for a
total of $184 million, he said.

The previous management bought the vessels in 2002 for a total
of $130 million to reduce costs of transporting crude.