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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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