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Game over for corrupt, wig-wearing Indonesian tax official
Indonesian junior tax official Gayus Tambunan (C) is escorted by police and his lawyer as he arrives at the South Jakarta court January 19, 2011. Credit: Reuters/Beawiharta
By Olivia Rondonuwu
JAKARTA | Wed Jan 19, 2011 8:35am GMT
JAKARTA (Reuters) - A junior Indonesian tax official whose testimony in a corruption trial and exploits out of court have shocked a nation normally used to excess was jailed for seven years Wednesday in a case analysts say tests the country's commitment to tackling graft.
The case of Gayus Tambunan, who had earlier been found guilty of bribery and misusing his position, both entertained and scandalised a nation used to paying backhanders for even routine government services, as well as multi-million dollar graft by officials.
Among Gayus's more daring exploits was to attend a tennis tournament in Bali -- while supposedly in detention awaiting sentencing -- disguised in a wig. Gayus, who was also fined 300 million rupiah (around 21,000 pounds), now faces a slew of other charges and has threatened to provide evidence and testimony that could bring down scores of high profile officials.
Indonesia's economy has ridden out the global financial crisis and become a magnet for emerging market investors keen to tap into a commodity- and resource-rich country offering returns that are the envy of the West. But corruption remains a major impediment, adds millions of dollars to start-up and operating costs and frequently slows infrastructure projects.
Indonesia lay in 110th place last year in Transparency International's corruption perception index. "Gayus has succeeded to rebut all claims about any bureaucratic reform and corruption eradication commitment," said Febri Diansyah of another graft watchdog, Indonesia Corruption Watch (ICW). "Like a sand castle, it was all torn down by a flick of Gayus' fingers."
Details of Gayus's testimony and exploits while under investigation have become so outrageous that President Susilo Bambang Yudhoyono Monday issued a decree ordering officials to investigate all aspects of the case. Corruption has become a significant risk for Yudhoyono, re-elected in a landslide in April 2009 on a promise to clean up graft and reform the civil service.
He remains popular, though corruption issues cut his rating to 63 percent last December from 85 percent in mid 2009. Gayus was a junior official in Indonesia's vast bureaucracy until 2009 when he was charged with accepting millions to wipe vast chunks off the tax books of individuals and companies. After initially being found not guilty, Gayus was re-arrested and charged with corrupting court and law enforcement officials.
VILLAIN OR ROBIN HOOD
In subsequent testimony he admitted giving and taking bribes, and implicated prominent companies and officials including tycoon Aburizal Bakrie, chairman of Golkar, the country's second biggest political party. Bakrie and his firms have denied any wrongdoing.
But it has been Gayus's exploits while supposedly in detention that have caused the most uproar and turned him into both a villain or Robin Hood, depending on perspective. Photographed in the wig at the Bali tournament, he also made trips to Singapore, Guangzhou and Macau on fake passports -- among 60 excursions he apparently made while in detention.
According to other testimony, Gayus had paid $40,000 in bribes to a judge in a previous case against him. Prosecutors said the judge had sent him telephone text messages on the eve of the verdict and on the morning it was announced, asking for greater sums to enable the judge to buy a car for his child. The judge concerned denied any wrongdoing.
Jakarta's Metro TV station frequently fills gaps between programs with a montage of pictures of Gayus in various disguises, set to the theme music from "The Godfather," Francis Ford Coppola's classic about the Mafia.
While he admits his guilt, Gayus insists he is merely a small fish being made a scapegoat to protect bigger criminals.
Wednesday he sat attentively, dressed in a traditional batik-patterned shirt, as chief judge Albertina Ho read the sentencing preamble, her voice cracking after more than two hours of non-stop speaking. Ho said Gayus had been a cooperative witness, but the sentence drew gasps and boos from a court gallery that expected a more severe decision.
Reform watchdogs see the case as critical in showing the government's commitment to overhaul Indonesia's judicial system and the president's decree as vital. "This decree is merely a step forward to process the Gayus case further and to fight judicial mafia, but it will be toothless if the president is not standing firm against rogue officials," said ICW's Febri Diansyah.
Yudhoyono's decree ordered an overhaul within a month of government offices implicated in the case and the removal of any officials found guilty of corrupt involvement. He also ordered an investigation into any firms linked to the case if officials find evidence of tax violations. Local media have reported that Gayus handled the tax claims of about 150 companies, including three controlled by the Bakrie family.
While corruption acts as a drag on the economy, booming exports of commodities such as coal and rising consumer spending mean solid six percent growth is expected again this year. For bond investors, who have piled into government debt to drive down 20-year yields, growth plus falling government debt levels and the prospect of an upgrade to investment grade status this year should outweigh graft risk.
The grim picture of entrenched corruption has long put firms off from investing directly, but FDI grew by one third on the previous year to around $14 billion in 2010, from existing mining firms and manufacturing newcomers, with more seen coming from North Asia.
While some of those nations may be willing to deal with graft, there are also signs more Western firms will take on the risks in Indonesia, which has had success in tackling other threats such as Islamic militant groups and currency volatility.
(Writing by David Fox; Editing by Daniel Magnowski)
