The policemen's bank accounts
Last week's disclosure of indications of money laundering involving hundreds of billions of rupiah related to the personal accounts of 15 police officers is the biggest test yet of the leadership and integrity of new National Police chief Gen. Sutanto.
The public has long perceived the police as the most corrupt of public institutions, along with the tax and customs services, and this has been confirmed numerous times in opinion polls and surveys. However, the revelation of the questionable accounts was the first strong public evidence of the amount of money involved in the malfeasance within the National Police. It is worth noting that the highest take-home pay for a four-star police general is about Rp 10 million (US$950) a month.
True, the principle of presumption of innocence must always be upheld. But the information about the alleged money laundering is highly credible because it was revealed after a meeting between Gen. Sutanto and Yunus Husein, chief of the Financial Transaction Reports Analysis Center (PPATK), which in many other countries is known as the financial intelligence unit.
At the meeting, PPATK chief Husein reaffirmed the need for strong cooperation between his institution and the National Police in handling money laundering cases. He also submitted to Sutanto a bulky report outlining the indications of money laundering involving numerous bank accounts, including those owned by 15 police officers.
There are two reasons this report is highly credible. First, most banks and financial institutions in the country are hesitant to report suspicious transactions for fear of losing important clients. Hence, once they decide, or feel compelled, to report suspicious transactions to the PPATK, as they did with the policemen's accounts, there is a good chance the transactions are highly suspicious.
The second factor is that lawyers and financial experts at the PPATK, which is in charge of enforcing the money laundering law, thoroughly analyze reports of suspicious transactions they receive from banks and other financial institutions. Only when they are convinced there are strong indications of money laundering will they submit the case to the police for further investigation.
So the indications and evidence of money laundering are thoroughly checked before they are submitted to the police as to the source of the money and the purpose of the underlying transactions.
Sutanto's credibility, integrity and leadership will therefore be seriously questioned if the money laundering cases against the police officers are eventually rejected because of a "lack of evidence".
We got the impression that Husein specifically lobbied for a stronger commitment from Gen. Sutanto because of his frustration with the lack of cooperation and the corrupt mentality within the police. Over the past two years, the PPATK has submitted hundreds of money laundering cases to the police for investigation, but very few of them have reached the Attorney General's Office.
Cooperation between law enforcement agencies and among financial service companies, as well as other state institutions like the customs and tax services and the stock market watchdog, is vital for the effective enforcement of the money laundering law.
If Sutanto fails to act on the allegations of money laundering involving his officers, it will damage his reputation and compromise his integrity. It also would adversely affect the credibility of the nation's campaign against money laundering. This would be a big loss because efforts to fight money laundering are also important for combating corruption and tax evasion, which are rampant in Indonesia. Strong enforcement of the law will make it extremely difficult for those involved in corruption and for tax evaders to launder their ill-gotten money in the legal financial system.
It is also worth remembering that even though Indonesia was removed from the blacklist of the Financial Action Task Force of developed countries last February, it is still subject to periodical evaluation.
Failure to deal transparently and credibly with the questionable personal accounts of these 15 police officers could see Indonesian thrown back onto the blacklist. This would harm Indonesia's economic competitiveness because it would add extra costs to financial transactions with companies and individuals in Indonesia.