SINGAPORE promotes itself as a model of financial integrity.
But, officials in Jakarta say, the wealthy city-state is a haven
for some of the most corrupt Indonesians and their ill-gotten
gains.
Singapore denies that it turns a blind eye to
dirty money and says that if sufficient evidence is provided, it is
ready to take “swift and necessary action” against corruption
suspects.
But Indonesia’s Deputy Attorney General Darmono said: “Singapore
is the most strategic country for corruptors to run away to.
“It’s geographically the closest to Indonesia and the policy of
the Singaporean government enables corruptors to live there,” he
told AFP.
Precise information on the extent of the illegal wealth
allegedly smuggled out of Indonesia to Singapore is hard to find
due to the small republic’s strict bank secrecy laws and the
sensitivity of the subject.
But a report by Indonesia’s financial intelligence unit in late
2006 said around 200 fugitives from Indonesian state debt were
residing there.
Three years ago extradition requests were lodged with Singapore
for 15 corruption suspects, but the process has stalled due to
complications surrounding a 2007 extradition treaty, Indonesian
officials said.
In a recent update to lawmakers, Darmono said most of 18
suspects currently subject to extradition requests over corruption
were hiding in the city-state.
Another 10 had fled abroad, mostly to Singapore, but were not
subject to extradition requests, he added.
The suspects include bankers who siphoned off hundreds of
millions of dollars in state bailout funds during the 1997-1998
Asian financial crisis, and tycoons of illegal logging, according
to official and independent sources.
“They are living the life there. Their lifestyle in Singapore is
above the average,” Indonesia Corruption Watch activist Emerson
Yuntho said.
Arif Havas Oegroseno, director general for law and international
treaties at the foreign ministry, said the proceeds from corruption
were more than enough to fund lavish lifestyles in Singapore.
“As they’ve invested huge sums of stolen money, which are
increasing in value over time, they no longer need to work,” he
said.
The Indonesian Supreme Court convicted businessman Djoko
Sugiarto Tjandra on June 11 last year for embezzling Rp546 billion
(US$60 million) of state funds linked to bank bailouts in 1999.
Like other suspects before him, he fled to Singapore on the eve
of his conviction and is now the target of Indonesia’s latest
request for extradition, Attorney General Hendarman Supandji
said.
A spokeswoman for Singapore’s Attorney-General’s Chambers did
not comment on Tjandra’s case.
“Requests for mutual legal assistance are confidential,” she
said.
On March 25, Indonesian officials reported that Gayus Tambunan,
a 30-year-old tax official wanted in connection with a suspicious
Rp25 billion in his bank account, had fled the country for
Singapore.
He was apprehended there a few days later by Indonesian police,
prompting questions from officials and journalists in Jakarta about
why this suspect was so easy to repatriate when others continued to
live freely in Singapore.
“Businessmen have a wide reach to anywhere; they have no
boundaries. Civil servants have limited reach,” explained Attorney
General Supandji.
Another fugitive is Anggoro Widjojo, a businessman who police
allege bribed officials to win a forestry ministry contract.
He initially fled to China but police and graft investigators
said that when they wanted to talk to him last year, he was in
Singapore.
Indonesia’s anti-corruption watchdog – the Corruption
Eradication Commission – accuses him of launching a long-distance
campaign through his Jakarta-based brother, Anggodo, to frame
investigators probing his case.
“Our concern is that Indonesia often makes the list of countries
with high corruption levels. But there are other countries with low
corruption levels that become the places of residence for
Indonesian corruptors,” Oegroseno said.
Indonesian economist and politician Dradjad Wibowo estimated
that up to $120 billion worth of “grey money” from Indonesia had
flowed through Singapore, despite that state’s clear laws against
money laundering.
“More than half of that money is funds from corruption,
finance-related crime or other crimes such as illegal logging,” he
said.
“We hope Singapore will show goodwill but it can’t claim to be
one of the world’s cleanest and best governed countries while still
existing as a bolthole for Indonesian corruptors.”
The situation has stoked frustration among senior Indonesian
officials for years, but they appear to be reluctant to speak out
about it for fear of riling Singapore’s leadership.
When the frustration does boil over, they accuse Singapore of
undermining an Asian neighbour’s fight against corruption – deemed
vital to Indonesia’s economic and democratic development – in order
to enrich its banking sector.
“The country’s income comes mainly from selling (financial)
services, and with more money floating around it has the
opportunity to strengthen its economy,” said Darmono, the deputy
attorney general.
“It tries to gather as much foreign capital as possible.
Unfortunately, the incoming funds include ‘illegal funds.’”
Then-vice-president Jusuf Kalla was blunt in a 2007 interview
with the Financial Times. “They’re thinking on the business side…
That’s all it is. It strengthens Singapore’s economy,” he said.
Foreign Minister Marty Natalegawa avoids such stridency, but
told AFP he planned to hold “informal talks” with Singaporean
leaders about the issue later this year.
“What we want to be focusing on is not necessarily the legal
instrument but more the political commitment,” he said, referring
to the long-delayed extradition treaty.
He added that Indonesia believed Singapore recognised “the
importance of dealing with these cases” and helping its neighbour
to “enforce its core positions” against corruption.
Singaporean officials bristle at the suggestion the regional
financial hub’s integrity is being muddied by illegal loggers,
dodgy tax officials and shady businessmen from across the Malacca
Strait.
“Singapore takes a serious view of crimes committed in Singapore
and will not tolerate any criminal or illicit activities being
conducted through Singapore,” the spokeswoman for the state’s
Corrupt Practices Investigation Bureau said.
“In regard to foreign corruption fugitives, as long as
sufficient evidence is provided to show that money laundering or
any other offence has been committed in Singapore, the law
enforcement authorities will take swift and necessary action to
investigate and/or seize assets.”
Indeed, Transparency International ranks Singapore as one of the
cleanest countries in the world – and Indonesia as one of the
grubbiest.
Singapore was the world’s third cleanest country on
Transparency’s corruption perceptions index for 2009, the only
Asian nation in the top 10. Indonesia was a lowly 111th.
Under Singapore’s Corruption, Drug Trafficking and other Serious
Crimes (Confiscation of Benefits) Act, any person who knows or
suspects that property may have come from criminal conduct is
obliged to report this information.
But a 2008 report by the Financial Action Task Force (FATF), an
inter-governmental body tasked with developing international
policies to fight money laundering and terrorist financing, rated
Singapore as only “partially compliant” with its
recommendations.
It said “no enforceable powers have been exercised to require
financial institutions to apply stringent or additional …
counter-measures” in relation to money from countries that do not
abide by FATF standards.
Singapore’s money-laundering laws were “not effectively
implemented” and there was a focus on domestic cases, leaving
foreigners largely unmolested, it said.
The Monetary Authority of Singapore said the report “affirmed
the high standards” of Singapore’s anti-money laundering regime and
rated the state on a par with Britain and the United States.
“In particular, the integrity of Singapore’s financial system is
safeguarded by our rigorous customer due diligence measures as well
as clear and efficient process for mutual legal assistance,” a
spokeswoman said.
“These procedures are applied to both local as well as foreign
customers.”
But in a study released in December on illegal logging in
Indonesia, Human Rights Watch described Singapore as a “safe haven”
for cashed-up Indonesian corruption fugitives.
It said that while Jakarta bore the main responsibility for
requesting assistance and pursuing cases, Singapore had to “ensure
that its own banking and anti-money laundering regulations are
rigorously enforced”.
Human Rights Watch added that Singapore had an international
duty to ensure it did not allow its banking system – the
cornerstone of Southeast Asian finance – to be used to wash dirty
money.
“Although proud of its strong ratings on fighting corruption
domestically, Singapore in particular is often used as a safe haven
by business tycoons fleeing law enforcement in Indonesia,” said the
report, entitled “Wild Money”.
“Corrupt fugitives from justice continue to reside peacefully
and house their assets unmolested in Singapore.”
Indonesia’s parliament has not ratified the extradition treaty
because of Singapore’s insistence on linking it to defence ties,
officials in Jakarta said.
Foreign Minister Natalegawa said the pact was in “abeyance” due
to “complications in the way it was presented and the way the
discussions developed”.
“That notwithstanding, there is still room for cooperation
between our two governments,” he added.
By Alvin Darlanika Soedarjo
Agence
France-Presse
