http://www.thejakartapost.com/detaileditorial.asp?fileid=20070827.E02&irec=1

      Print August 28, 2007 
     
     
      Conflicts of interest a source of corruption 
      Opinion News - Monday, August 27, 2007 

      Kristian Tamtomo, Jakarta

      Despite the progress Indonesia has made in stamping out corruption, there 
is still limited public understanding about the concept of "conflict of 
interest".

      This emerged during an informal discussion on anti-corruption held at the 
Partnership for Governance Reform office earlier this month attended by experts 
Richard Messick (World Bank), Larry Makinson (Center for Responsive Politics) 
and Brian Radford (Canadian government). 

      According to Messick, the most visible sign of this lack of understanding 
is the fact that many officials, both at the national and local level, continue 
to hold positions or have holdings in private sector institutions without any 
noticeable public scrutiny. Thus, what is regarded in many countries as a 
potential conflict of interest does not seem to be a problem in Indonesia. 

      The notion of conflict of interest basically refers to a situation in 
which the private interests of an individual holding public office may 
potentially distort or are in conflict with the decisions he/she has to make on 
behalf of the public. 

      Many examples of this can be found in Indonesia, where prominent 
officials turn out to have connections to private businesses, thus increasing 
the possibility of a conflict of interest or policy bias existing when they 
make decisions in areas where these businesses operate. 

      This is distinct from the illegal corrupt practices of officials, or even 
worse, institutions, in receiving (or demanding) bribes, kick-backs, fees or 
proceeds from policy decisions, institutional services and positional 
influence. 

      The public disclosure of personal assets is particularly important in 
anti-graft moves. In his presentation, Messick showed how the instatement of 
legal mechanisms to disclose private assets in a number of countries helped 
authorities uncover ill-gotten assets. 

      In Indonesia, the public disclosure of the private assets of candidates 
for state posts has become a legal requirement during the selection process, 
but this system needs improvement. 

      While ill-gotten wealth can be uncovered in a relatively straight forward 
manner, identifying conflicts of interest is a more difficult task requiring 
analysis that goes beyond uncovering sources of assets. This is what Larry 
Makinson from the Center for Responsive Politics (CRP) sought to show. Through 
his analysis of U.S. election campaign finance, he said every candidate faces a 
potential conflict of interest in relation to the sources of their campaign 
funds. 

      Thanks to Watergate, the U.S. system of tracking campaign funds has 
become more transparent, significantly reducing cases of illegal funding. 
Meanwhile, the amount of money and donations involved in campaign funding has 
constantly increased. The question here is whether these mounting funds can 
pose a potential conflict of interest for elected officials, between serving 
the public interest or accommodating the policy agendas of campaign donors. 

      By analyzing patterns of campaign funding, the CRP concluded that 
incumbents hold a huge advantage over newcomers and reduce competition among 
candidates, particularly in the House of Representatives. Their studies also 
revealed that groups, investment banks for example, tend to support one faction 
over the other. In the end, Makinson questioned whether American democracy has 
become a "dollarocracy", as sources of financial support seem to favor those 
who hold power and vice-versa. 

      Thanks to the U.S. Freedom of Information Act, NGOs such as the CRP have 
the right to access campaign finance data. Through their analysis of campaign 
data, they can produce portfolios on candidates and their top contributors as 
well as reports on how certain businesses and interest groups choose which 
party and which candidate to fund. 

      This kind of funding analysis goes beyond the disclosure of private 
assets and reveals the connection between capital (through campaign funding) 
and policy formulation. 

      In cases where officials are directly linked to business or private 
interests, the potential for a conflict of interest can be clearly identified. 
However, to prove a conflict of interest exists, an analysis is required that 
can unveil an official's private gains (especially through illicit or dubious 
means) through their policies or position. 

      In the case of Indonesia, there is a lack of political commitment to 
fully establish the legal framework required to follow up concrete findings 
involving corruption. Crucial legal mechanisms, such as the Anti-Corruption 
Law, and legal entities, such as the Corruption Eradication Commission (KPK), 
still need empowerment. 

      Here, investigations map out the patterns between trends in capital 
support and the direction of policy, revealing the way different interest 
groups support certain candidates to push for specific policy agendas. 

      To enable watch groups, the media and the wider public to conduct such 
studies, it is necessary to enact a law on freedom of information as the legal 
framework through which the public can access related data and documents. 
Compulsory disclosure is not enough. 

      It is necessary that watch groups and the media play an active role in 
accessing and analyzing documents related to the public's interests (so-called 
"open secrets") to uncover possible conflicts of interest behind policy 
formulation. 

      The effect of such an in-depth analysis could be quite sobering. 

      If we are able to explicitly map out the connections between capital and 
politics, then we might come across the disturbing realization that many social 
actors (state, private, civil society) are not exempt from conflicts of 
interest. 

      Nevertheless, if we are committed to eradicating corruption, implementing 
good governance and achieving a healthy democracy, this form of investigation 
is an important step toward improving the way policies are formulated and the 
way governance is conducted. 

      On a wider social scale, it presents an important form of political 
education that can create a literate, critical and politically mature public 
able to identifying corruption and see the hidden connections behind policy 
decisions. 

      The writer works at the Partnership for Governance Reform. The views 
expressed in this article are personal. 
     

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