Discrepancy Arising Over Ministry’s Suspicious Financial Transactions

Commission III decided to hold another meeting to bring together Mahfud MD, Financial Transaction Reports and Analysis Center (PPATK) head Ivan Yustiavandana and Finance Minister Sri Mulyani.

KOMPAS/RONY ARIYANTO NUGROHO

General Hearing Meeting of the Coordinating Minister for Politics, Law and Security Mahfud MD with Commission III of the DPR in the Meeting Room of Commission III DPR RI Building, Jakarta, Wednesday (29/3/2023).

JAKARTA, KOMPAS — A hearing session at the House of Representatives on Wednesday (29/3/2023) exposed differing data interpretations over suspicious financial transactions worth Rp 349 trillion ($23.16 billion) at the Finance Ministry. The hearing was hosted by Commission III, overseeing legal affairs, and attended by Mahfud MD as chairman of the National Coordinating Committee for the Prevention and Eradication of Money Laundering (TPPU). He said the true amount appeared to be much greater than that in the data submitted by Finance Minister Sri Mulyani Indrawati.

Given the discrepancy in the reports, Commission III decided to hold another meeting to bring together Mahfud, Financial Transaction Reports and Analysis Center (PPATK) head Ivan Yustiavandana and Sri Mulyani.

Starting at 3 p.m., the hearing was called off to break the fast before resuming until 11 p.m. Mahfud was accompanied by Ivan Yustiavandana, who is also TPPU committee secretary. Sri Mulyani was not present as she was chairing an economic meeting with ASEAN finance ministers in Bali. Mahfud said the revelation of Rp 349 ​​trillion-worth in suspicious financial transactions at the Finance Ministry had come up following PPATK 300-report analysis on data compiled from the 2009-2023 period. The analysis results have been made available to the Finance Ministry, other relevant ministries and institutions, as well as law enforcers.

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The suspicious financial transactions are divided into three categories. First, the transactions allegedly involving the ministry officials, which amount to Rp 35.5 trillion. Second, those allegedly involving ministry officials and other parties, amounting to Rp 53.8 trillion. Third, the Rp 260.5 trillion-worth in transactions suspected to be related to the ministry's authority as a controlling institution against money-laundering crimes, for which data on the alleged involvement of ministry officials has yet to be obtained. These three categories of suspicious transactions amount to Rp 349.8 trillion in total.

Mahfud, who is also coordinating political, legal and security affairs minister, said the suspicious transactions involved 491 Finance Ministry officials, 13 government officials of other ministries/institutions and 570 nongovernment individuals.

During a work meeting with Commission XI, overseeing financial affairs, on Monday (27/3), Sri Mulyani said out of the analyzed 300 reports with a total suspicious transaction of Rp 349 ​​trillion, the portion related to her aides’ malfeasance only accounted for Rp 3.3 trillion. The remaining portion, she said, was related to corporate transactions with no involvement of the ministry officials (Kompas, 28/3/2023).

KOMPAS/RONY ARIYANTO NUGROHO

Coordinating Minister for Politics, Law and Security Mahfud MD (right) with Chair of the Center for Financial Transaction Reports and Analysis Ivan Yustiavandana (left) attended a meeting with Commission III of the DPR in the Meeting Room of Commission III DPR RI Building, Jakarta, Wednesday (29/3/2023 ).

However, Mahfud pointed to the data submitted by Sri Mulyani as being far from fact. He believed the minister had not been provided with complete reports from her staff and suspected the ministry’s ranks had submitted only a small portion of report analysis with the large portion being reported as part tax-payment irregularities. "There was a misunderstanding [that resulted in] Ibu Sri Mulyani’s inappropriate explanation. It is due to concealed information from below," he said.

Ivan Yustiavandana said the PPATK’s analysis reports had mentioned the names of several officials as well as companies allegedly involved in suspicious transactions. It was found that one official could have relations with more than one company.

“We found them to own shell companies, in which they use the name of wife, child, driver, gardener in deed of company establishment," he said.

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He said it was the issue over these shell companies that caused discrepancies between the data presented by PPATK and the Finance Ministry. Excluding these companies, he said, would reduce the number of money laundering cases in the suspicious transactions. Money laundering is found to be the crime mode used to disguise the perpetrator's unscrupulous acts.

“Excluding those data [of shell companies] would mean we deceived the investigators. We mention the names of the companies and the persons involved. That's where we have found the figure of Rp 35 trillion,” he said about the suspected transactions specifically involving Finance Ministry officials. “If [companies] are removed it would be Rp 22 trillion. Further removal would leave it at only Rp 3.3 trillion," he said.

Grilling session

Commission III members questioned the discrepancy in the data submitted by Mahfud and Sri Mulyani. Concerned about the potential confusion among the public due to the discrepancy, Benny K Harman of the Democratic Party faction insisted Mahfud present the data completely and openly to see who was deceiving the public.

He even moved with a proposal to form a special committee to work on the issue, which was supported by Taufik Basari of Nasdem faction.

Replying to the lawmakers’ questions, Mahfud gave his assurance that he was revealing valid data and there was actually no clashing data between his and the finance minister’s, saying the data discrepancy appears to have surfaced because the data taken by Sri Mulyani was only a sample.

The hearing, which was chaired by Ahmad Sahroni, decided to arrange another meeting with the finance minister; coordinating political, legal and security affairs minister; and PPATK.

This article was translated by Musthofid.