The Supreme Audit Agency found possible embezzlement in the state's bird flu vaccine project, awarded to a company owned by convicted businessman Nazaruddin. Legislators and Health Ministry officials may have accepted kickbacks.
RIBKA Tjiptaning, the Health Commission chairperson at the House of Representatives (DPR) thought long and hard to recall an event two years ago. She remembered Muhammad Nasir, a fellow Democrat Party legislator who had once served at the Health Commission. "I have, on two separate occasions, received a bag from him," she told Tempo on Thursday last week.
One was black, and the other white. She received the first bag on June 1, 2010, on her birthday. Ribka recalled that Nasir had called and had invited her to meet him at the Senayan City mall in South Jakarta. However, Ribka claimed she did not turn up as promisedthat day. After all, she belonged to the opposition party, and Nasir was from the ruling Democrat Party. "The Democrats were very strong at the time."
Realizing that Ribka would not turn up, Nasir rang her again and asked if Ribka would like him to buy her something. Spontaneously, Ribka mentioned a bag. The next day, a brand new bag awaited her at her office at the DPR Health Commission. The second bag was presented to her as a Christmas gift that same year. "I forgot its brand," said Ribka.
The gifts were delivered several days after the Health Commission approved an increased budget for bird flu vaccines proposed by the Health Ministry. This Indonesian Democratic Party of Struggle (PDI Perjuangan) legislator claimed she originally rejected the proposed budget of Rp656 billion to develop a full-fledged laboratory and center, focusing on bird flu vaccine production, research and technology transfer facilities. She said there was no urgency to the project at the time.
After a few deliberations, however, the Health Commission gave the green light. Ribka did not joined the decisive meetings, as she had been attending the PDIP national congress in Bali. "Although I was absent, I followed the decision taken in those meetings."
Ribka described the bags she received from Nasir as ordinary presents. Nasir is brother to Muhammad Nazaruddin, a high-profile businessman and former Democrat Party who was recently convicted of fraud. When media reports surfaced carrying details of the financial records of Nazaruddin's companies, Ribka said her family members teased her about the gift bags being recorded in Nazaruddin's company account books. "I wasn't worried. If necessary I can hand over the bags to the KPK (Corruption Eradication Commission)." In addition to the bags, other interesting items were found linked to Ribka in the financial records of Nazaruddin's holding company, Permai Group, which had been seized as evidence by the KPK from the office computer of Yulianis, the company's top bookkeeper. Ribka allegedly received thousands of dollars from Nazaruddin.
Yulianis recorded it under number MK1/10/09/0801 dated September 8, 2010. Money totaling US$10,000, entered at the exchange rate of Rp9,025, was delivered by a Permai Group employee named Ratna, and recorded as payment for Ribka. The fee paid was listed in the records under "Health Ministry Project 2010."
Ribka was not the only one listed in those records. The DPR Budget Council deputy chairman, Tamsil Linrung was also listed as have received US$100,000 on January 11, 2010. The fund was entered at the exchange rate of Rp9,090 and delivered by Permai Group employees, Pardi and Minarsih.
Tamsil was mentioned more than once. On August 27, 2010, two other outgoing payments were recorded for this Prosperity and Justice Party legislator. Handed over by Ratna, they totaled US$ 65,000. This delivery was linked to the Health Ministry's 2010 budget.
Ribka denied she ever received money from Ratna. "I never received it. I don't know any Ratna," she insisted. Tamsil also denied the charges. "This is nothing. I don't know what it's about," he said. "The financial report was fictitious and fabricated."
The Health Ministry's ambitious goal of owning an integrated bird flu vaccine laboratory had been quickly discerned by Muhammad Nazaruddin. Moreover, with a human case of bird flu occurring for the first time in Banten in 2005, the plan to realize the project received more weight.
A Health Ministry official said although the plan for the bird flu vaccine plant construction existed, the ministry had yet to propose a budget for it. This is why officials of the Health Ministry were initially surprised by the notification of an increase in the 2008 state budget for the Health Ministry, valued at Rp 200 billion. This notification was received through a letter of the Directorate General of Budgeting No. S-1256/66/2008 dated May 15, 2008. The additional funds were later slotted by then Health Minister Siti Fadilah Supari to be utilized for the bird flu vaccine project.
"So the budget had emerged first, followed by the project," said the official, who spoke on condition of anonymity.
According to the official, "invisible hands" at the DPR and Finance Ministry secured the budget, before the project was conjured up at the Health Ministry. He alleged that Nazaruddin and his friends were responsible for this. "It was exactly the same as with the construction of the athletes' village for the SEA Games," he added.
Siti Fadilah then appointed PT Biofarma, as recipient of the integrated bird flu vaccine research and production facilities. The Directorate General of Disease Control and Environmental Hygiene was appointed the Budget Utilization authority for this project.
On September 19, 2008, Siti Fadilah sent a letter to Finance Minister Sri Mulyani Indrawati, proposing a multi-year budget increase - to Rp637 billion. Two months later, an approval was issued by the Finance Ministry.
As project executor, the Directorate General of Disease Control and Environmental Hygiene prepared two phases of the construction. The first covered the construction of the bird flu vaccine production, research and technology transfer facilities for the fiscal period of 2008-2010, worth Rp718.8 billion. The second was the construction of connecting breeding system facilities and infrastructure for the research and technology of bird flu vaccines for humans, projected for the fiscal period of 2010-2011, valued at Rp663.4 billion.
The same official said that Nazaruddin's men moved quickly when the procurement committee prepared the tender for the first phase at the end of October 2008. He revealed Nazaruddin and his older brother Nasir met several times with Health Ministry officials to discuss the project. "These discussions included the minister," he said.
The high-level lobbying proved effective. On November 28, 2008, Anugrah Nusantara, Nazaruddin's primary company, was declared the winner. Alfindo Nuratama Perkasa and Mahkota Nusantara were named first and second selections. These two were later known to be also affiliated with Nazaruddin.
After Anugerah's victory in the first round, Nazaruddin again aimed for the tender of the second phase, which began in mid-2009. Exartech Technology Utama, his other company, won the tender for the construction of the connecting breeding system facilities and infrastructure for the research and technology of bird flu vaccines for humans. In this project Exartech cooperated with state-owned housing firm Pembangunan Perumahan.
A Tempo source said that in their effort to secure the Rp1.3 trillion projects, both companies plied Health Ministry officials with bribes. Not just key officials, but tender executors also got their share. "All of them received [money]," he added.
Yulianis, Deputy Finance Director of Permai Group, neatly recorded all these "items of expenditure" for the vaccine project in Permai Group's books. From September 15, 2008 to January 23, 2010, money was spent 199 times. The code was "goods purchase and support funds."
In copies of records obtained by Tempo, some expenses in large amounts went to officials of the Directorate General of Disease Control and Environmental Hygiene. The official making commitments, Tunggul P. Sihombing, received money most frequently.
On March 30, 2010, Tunggul was listed in the records as having received US$300,000 from a Permai Group employee named Yayan. Later Rp 500 million followed on July 17, from Ratna. Tunggul had his last share on January 12, 2011, US$50 thousand which was again handed by Ratna.
Guntur Budi Wanarto, Secretary of the Director General concurrently the budget utilization authority, was also allotted big sums of money, all of which were paid out in 2010. On April 19 of that year, the total was US$31,000 through Darsono and on July 16 he got Rp500 million. On August 30, Guntur was given US$200 thousand registered by Yulianis for the downpayment of a house.
The Director General of Disease Control and Environmental Hygiene Tjandra Yoga Adhitama also appeared in the records. Under the item of "DP (downpayment) for UPT P2PL Project purchase", an expense is entered at US$30 thousand on April 11, 2009.
Three executive directors of Biofarma were also noted to have each received respectively Rp10 million for holiday allowances on September 2, 2010. The delivery of the money coded "Connecting Bird Flu 2010" was entirely done by Ratna.
Tunggul denied he received bribes. He claimed he had no big power in the process of tenders. "As far as I recall there was no such money flow," he said. "Just let the Corruption Eradication Commission verify it."
Tjandra also made his denials. "My name is spelled as Tjandra, not Candra," he said. Guntur could not be reached for a confirmation. His whereabouts were unknown.
President Director of Biofarma, Iskandar, claimed he had once been offered "THR" (holiday allowances) by a messenger of Anugrah. "But we declined the offer as our company already provides us with THR," he said. Meanwhile, Nazaruddin said he knew nothing about the expenditures of Anugrah.
The stench of corruption permeating from the bird flu vaccine project was caught by the Supreme Audit Agency (BPK). In its 2012 audit, it discovered some irregularities in the project which consumed Rp926.1 billion of state funds.
While discovering equipment and buildings scattered across seven locations in neglected and deplorable conditions, state auditors also detected unhealthy cooperation with tender winners. State losses linked to this project are estimated at Rp693.2 billion.
In audit documents, the BPK also obtained minutes of a meeting attended by Muhammad Nasir in the Planning Bureau meeting room on December 11, 2008. At the meeting, Nasir proposed the mechanism of downpayment disbursement.
Nasir denied the meeting. "Since 2004, I've no longer managed the company," he said.
Siti Fadilah seemed forgetful when asked about the chaos surrounding the vaccine project. "I'm still trying to find the documents," she said.
BPK member Rizal Djalil affirmed the bird flu vaccine project had been problematic from start to finish. He said the auditors had found indications of corruption involving officials and politicians. "They should be held responsible," he pointed out.
Johan Budi SP, a spokesman for the KPK, gave assurances the investigation of corruption allegations in the bird flu vaccine projects would continue.
By Setri Yasra, Ananda Badudu, Anton Septian (Jakarta), Ahmad Fikri (Bandung)
No. 44/12, June 26, 2012
Researchers in the Avian Influenza Research Center laboratory, BSL-3, Campus C, Airlangga University, Surabaya.