Selasa, 18 Agustus 2009

Campaign funding: Lesson from Watergate

Campaign funding: Lesson from Watergate

Natsir Kongah ,

General elections can stimulate political enthusiasm and economic growth, as well as wasteful spending.

There are indications that budgets for general elections and regional elections in Indonesia have surpassed election funds in other countries, even the US, with sums allocated to Indonesia's recent elections reaching US$50 billion.

Substantial election financing, however, can induce economic activities on multiple levels. While the financial crisis plagued many other countries, in Indonesia funds spent by legislative candidates - some already securing seats now - filled the drained pockets of marginal communities.

Sur, a customer at a Deli food stall at Daan Mogot Mall in West Jakarta, said she had got Rp 150,000 from three campaign teams of different parties after casting ballots in the recent legislative elections.

"Each of them gave me Rp 50,000. I just voted for the ones with money," she said, casually.
During the post-election week, the stall had trouble providing enough small change because many customers paid with banknotes in big denominations that they had apparently received from campaigning election candidates.
Medium and large-scale economic sectors also enjoyed extra benefits from the election season. A new national TV station achieved its breakeven point after a year of operation and its management paid bonuses to its employees.
This was for the greater part due to added income from broadcasting political party commercials and their derivatives.

Questions have often arisen as to the sources of campaign funding spent by candidates for the posts of regent, mayor, governor, member of the House of Representatives or Council of Regional Representatives, president or vice president. Were the funds obtained legitimately, and if from legal activities, were these conducted in compliance with state regulations?
The above questions should be examined in the light of the historic Watergate case, which implicated former US president Richard Milhous Nixon. While the setting and judicial aspects of this case are indeed a long way away from present conditions in Indonesia, similar crimes have frequently been committed by election candidates here.
However, the tricks, models and technology employed today are certainly more sophisticated and adjusted to recent developments.

The practice of money laundering is often undertaken by organized crime circles and is also applied in political activities to back campaign funding, as in the Watergate case.
John Madinger & Sydney A. Zalopany in their book Money Laundering: A Guide for Criminal Investigations (1999) describe how law enforcers uncovered the Watergate case.
The involvement of Kenneth Dahlberg, Dwayne Andreas and Bernard Barker/Maurice Stans was detected from a check worth $25,000 drawn by Kenneth Dahlberg from his account at First Bank and Trust Company in Boca Raton, Florida.
The check, drawn on April 8, 1972, originated from Dwayne Andreas, and had been given to Bernard Barker. Kenneth claimed he was involved in fundraising in the Midwest for the campaign to re-elect President Nixon.

During the fundraising, Dwayne Andreas, the president director of Archer Daniels Midland, a conglomerate engaged in agriculture in the Midwest, made a contribution through Bernard Barker and the check was later conveyed to Maurice Stans, the financial chairman of the Committee to Re-Elect The President (CRP).

This money was believed to have been used for President Nixon's re-election campaign.
Bank drafts worth $89,000 (comprising $15,000, $18,000, $24,000 and $32,000), that were identified as being drawn by Banco Internacional on April 5, 1972 from Manuel Ogarrio D'Aquaerro, a public prosecutor of Mexico, who also owned Compania de Azuere Veracruz, S.A (CAVSA), provided a clue in the investigations.

Investigators were trying to discover the origin of the fund obtained by the prosecutor, and then what it had to do with Maurice Stans in the above case. They knew CAVSA was a subsidiary of Gulf Resources and Chemical Company, Houston, Texas, and that it was no longer active.
According to their investigations, on April 3, 1972 Gulf Resources transferred $100,000 from its account at First National City Bank, Houston, to prosecutor Manuel Ogarrio in Mexico City.
They were informed that after buying bank drafts, Manuel Ogarrio delivered the $100,000, made up of the $89,000 worth of bank drafts and $11,000 in cash, through a courier, to Houston on April 5, 1972.

From Houston the money was given to the oil entrepreneurs committee, in which the Gulf Resources CEO was a member.
Investigations of Robert Allen, the CEO of Gulf Resource and Chemical Company, provided the following information:
On April 3, 1972, Gulf Resources transferred money to Manuel Oggario D'Aquaerro worth $100,000 for his services in closing CAVSA; However, Robert Allen said he possessed promissory notes issued by Manuel Oggario.

On April 5, 1972, Manuel Ogarrio lent $100,000 to the Informal Finance (Trust Account - Barker and Associate Inc), and at the same time Manuel Ogarrio received promissory notes.
On April 6, 1972, the $100,000 was conveyed to the Committee to Re-Elect The President (CRP) in the form of four bank drafts worth $89,000 and $11,000 cash.
Robert Allen's information was contradictory to the statement of Bernard Baker - that the $89,000 had been obtained from an American entrepreneur who had deposits in an offshore account.

What else was wrong with this case? On Feb. 7, 1972, President Nixon had signed the Campaign Fund Allocation Reform Act, which came into effect two months later and prohibited the granting of contributions to presidential candidates in the form of cash and donations from anonymous sources.

The contribution made by Dwayne Andreas via Kenneth Dahlberg, Maurice Stans and Bernard Barker involving the Trust Account on April 8, 1972 was provided as an anonymous donation.
The Watergate case is similar to the findings of Indonesia Corruption Watch wherein many donors have allegedly contributed to certain parties without stating clear identities.
In many cases names are given but addresses are unclear and in other cases unemployed persons earning no income have been listed as donors contributing large amounts of funds.
The case shows an indication of money laundering and attempting to conceal or obscure the source and ownership of the fund. The parties involved realized what they were doing was criminal in nature and conspired to cover this up.
Essentially, the crime (already committed) was the granting of a donation for presidential campaign activities by a company, which was prohibited by law.
But the backer then failed to properly report the amount contributed and attempted to hide the names of donors.

Presidential and vice presidential candidates can learn a lesson from the Watergate scandal, to avoid getting entangled as experienced by Nixon.
Political fervor needs further development and economic vigor an extra boost through election campaigns, but the extent of extravagance should be reduced accordingly.
The writer is a PR officer of the Financial Transaction Reports and Analysis Center (PPATK). The opinions expressed are personal.

2 komentar:

kopdang mengatakan...

Bapak juga mengkaji untuk Stolen Asset Recovery Initiatives dari World Bank atau Program Kerja UNCAC..?

chandra mengatakan...

Thanks for the wealth of resource!
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