This post is at least a year old. Some of the links in this post may no longer work correctly.
Fleeing taxman Gayus Tambunan leaves Singapore to face charges
Indonesian authorities’ successful attempt to lure a fleeing tax official named Gayus Tambunan home from Singapore to face charges related to bribery allegations and perjury charges stemming from his recent embezzlement acquittal once again points up the fact that crooks for decades have escaped to the island republic with billions of US dollars.
Indonesian police had to talk Gayus into coming home, of course, because the two countries have no extradition treaty. Although a pact was concluded between the two governments in 2007 after 18 years of negotiations, Indonesia’s House of Representatives refused to ratify it, citing reservations over a defense pact that was part of the negotiations.
Gayus, 30, is at the center of a scandal that threatens to overwhelm the National Police. He has been accused of paying and receiving bribes that resulted in him acquiring a hefty US$3 million personal bank account. Former senior police officer Comr. Gen. Susno Duadji reopened a can of worms recently when he accused other police generals of accepting bribes that eventually resulted in Gayus’s acquittal on embezzlement charges in March. Now represented by a famously reform-minded private attorney, Gayus is expected to cooperate with investigators in Jakarta to reveal details of whatever scam he was running.
But first he had to come home. And he did. Despite the fact that Indonesia has publicly pressed for an extradition treaty, neither Singapore nor Jakarta appears to really want one. Singapore maintains extradition pacts with the British Commonwealth, the United States, Hong Kong and others, but if a treaty were to be concluded with Jakarta, Singapore could face the possibility of losing billions in US dollar deposits as skittish absconders seek other places to put their money. In addition, members of the Indonesian legislature, considered among the world’s most corrupt, could fear losing a convenient bolt-hole and bank vault an hour away from Jakarta in case they are ever indicted or on the run.
Singapore’s banks, protected by some of the world’s tightest secrecy laws, are bulging with other people’s money, much of it looted and much of it from Indonesia. In 2007, Asia Sentinel reported that during the Asian Financial Crisis of 1997-1998, crooked bankers plundered more than US$13.5 billion from the Indonesian central bank’s recapitalization funds to 48 ailing banks and moved most of the money to Singapore.
In 2006, an astounding 18,000 Indonesians considered to be worth more than US$1 million were reported to be living in Singapore, population 4.5 million, with an aggregate wealth of US$87 billion, according to a report prepared by Merrill Lynch and Capgemini consulting. Among the latest to have fled were Hesham al Warraq and Rafat Ali Rizvi, former owners of PT Bank Century, which collapsed with losses of hundreds of millions of dollars and led to a massive political scandal in 2009, and businessman Anggoro Widjojo, who is charged with obstruction of justice and attempted bribery.
Nor is Indonesia alone. Bloomberg reported that in 2007 Asia’s dollar millionaires increased overall by 8.2 percent. Singapore’s ones rose by 22.4 percent in the same period despite the fact that its economy grew by only 7.5 percent. Money is said to be flowing in from China as well, as newly minted millionaires seek safe havens for their money. The Philippines has been trying for years to recover at least US$25 million sequestered after the family of deposed former President Ferdinand Marcos allegedly deposited it in Singapore. In 2009, the human rights group EarthRights International charged that members of the military regime in Burma was suspected of depositing nearly US$5 billion with Singaporean banks, which denied the charge.
Without an extradition treaty, the Indonesians say they used friendly persuasion to talk Gayus into coming back. Comdr Gen. Ito Sumardi, the chief of detectives, and two members of the Judicial Mafia Eradication Task Force, met with the fleeing official in Singapore last Tuesday and persuaded him to return to Jakarta. They told him it was only a matter of time before Singapore police arrested him for entering the country on a fake passport. He flew back last week and was formally arrested and charged.
Ito called the return of Gayus “a breakthrough for the National Police. It is possible that this method could be used to arrest more white-collar criminals who escape to Singapore, even without an extradition agreement.” In an interview with the Jakarta Globe, Ito said that bringing home criminals without coercion was possible if the Singaporean authorities were willing to help.
“As long as we can convince the Singaporean government that these people are indeed criminals and need to be arrested, I believe they will assist us, because I don’t think they want to be dubbed a safe haven for Indonesian corruption perpetrators,” he said.
That was hardly a satisfactory answer for Indonesia’s tough Corruption Eradication Commission (KPK), which would prefer a legal way to reel in fugitives hiding in the island republic.
“We have agreements with our counterparts in foreign countries, including to arrest fugitives,” Haryono Umar, deputy chairman of the commission, told reporters. “But with no clear extradition treaty, arrests would almost be impossible. The Anti-Corruption Law states that we cannot meet a person under investigation unless it is to conduct an arrest. We try to prevent fugitives from fleeing the country in the first place,” Haryono said. “But what happens if the suspect has already left?”
Although it remains to be seen if the Gayus case is a one-off, it seems unlikely that criminals who have established lives for themselves in the safety of Singapore — and Jakarta officials have said there are as many as 200 of them — will give up so easily. Ito also said that Jakarta officials do not want to upset the Singaporeans and would step carefully on future cases. “When we are in another country we can’t act based on the laws in our country,” he said.