Tactical fund: no receipts, no questions asked

Tactical fund: no receipts, no questions asked

Endy M. Bayuni, Jakarta, The Jakarta Post

The ongoing corruption investigation into the General Election
Commission (KPU) centers more on who among its members got how
much money. Naturally, the focus is on the men and women on the
commission because they were picked for their clean reputation
and track records. That they should now fall from grace (or be
about to) because they succumbed to temptation like most other
human beings is what makes this story juicy.

Little attention, it seems, is being lavished on the existence
of what is officially called the tactical fund -- the account
from which the money allegedly being parceled to the KPU members
had come from. We have learned, from the KPU treasurer's own
admission, that the fund itself was money accumulated from
"gratuities" given by KPU's contractors and suppliers.

That the presence of the fund has raised so few eyebrows
reflects, by and large, the wide public acceptance of such an
account and of the business practices associated with it.

There seems to be nothing out of the ordinary about such a
fund.

Many companies, and even most government and non-governmental
institutions in this country, have such an account in their
books, though it may be called by different names. In all
likelihood, the Corruption Eradication Commission (KPK), which is
investigating the KPU case, also runs such a fund.

Essentially, a tactical fund is used for expenditure for which
there will be no receipts. They are items that you find difficult
to account for. When you operate in a country as corrupt as
Indonesia, expect the unexpected. Those who have operated in this
country long enough know this, and have budgeted for this
unexpected, or rather unaccounted, expenditure.

This may include money to bribe petty government officials to
secure business permits and licenses, work permits, visas and
other documents; even if you don't need to offer a bribe, money
helps to speed up the process. It may be payments to journalists
to ensure favorable reporting or to the local security
authorities or thugs to ensure the safety of your premises. On a
larger scale, it may be bribes, gifts, gratuities or kickbacks to
secure your contracts.

In most cases, there are no receipts as proof that such
payments have been made. Hence, it is easy to see where the name
tactical fund comes from: it is spending what is considered to be
part of business tactics. Your accountant may accept this as
legitimate expenditure and book it under that account.

The flip side of the lack of transparency and accountability
of this tactical fund is that it may also be freely used, as in
the case of KPU, as an account to receive money for which, again,
no receipts are required or even made. The KPU treasurer, Hamdani
Amin, disclosed that the commission received $1.15 million as
gratuities -- or kickbacks really -- from its many contractors
and suppliers.

Notwithstanding the amount (and that is a hell of a big tip),
the practice suggests that the contractors won their bids -- for
the ink, the ballot papers and boxes, utensils, and what-have-you
-- not necessarily because they were the most competitive, but
more likely because of collusion involving insiders, whoever they
might be.

If the contractors could afford to return so much money to the
commission's treasure chest in the form of kickbacks, logically
they could have offered much lower prices in the first place, and
they would have saved the nation's taxpayers tons of money. It
also raises questions about the margin of markup they were
allowed to get away with by the KPU. Saving taxpayers' money
obviously is something alien to the contractors and to the KPU.

The practice of taking kickbacks from contractors is also
regarded as nothing out of the ordinary by most people and
seemingly by the investigators of the case, because this has
become a common business practice in this country.

So common perhaps that even KPU members who accepted money
from their treasurer (who is a civil servant loaned from the
Ministry of Home Affairs) never asked questions about the origins
of the money.

They accepted at face value the treasurer's explanation that
the money, which came on top of their Rp 15 million monthly
salary, was for payments for taking part in activities related to
their work at the commission. Had they bothered to ask the
questions, they probably could have prevented this scandal and
returned the money to the rightful owner: the taxpayers.

But then, this is the sort of payments that the less questions
you ask, the better it is for you. You can at least proclaim your
innocence later on, should anyone inquire about the money.

Slush funds have not only been given a degree of
respectability with an official title, but they have also been
deemed as a normal and acceptable way of running a business in
this country, largely because of our indifference.

It is beyond the scope of the investigators at the KPK to look
into the practice of managing tactical funds in this country,
especially since public attention is more focused on the high
profile figures involved. The money involved certainly puts it in
the small league in the normally high stake corruption game.

But the investigation could at least trigger a review of
business practices commonly found in this country, including the
giving of gratuities by contractors and running tactical funds.

If we could have saved $1.15 million alone from the KPK,
imagine the savings we would be making from all the other state
and government institutions if we do away with tactical funds.

The current anticorruption campaign would do well to take up
this issue.

In the meantime, one valuable lesson we can take from the KPU
corruption case is that from now on, lest we want to follow in
the unfortunate steps of the KPU members, we had better start
asking for receipts for all payments we make, and asking probing
questions for all payments received.

The writer is chief editor of The Jakarta Post.