Jakarta – The ministry of State Enterprise Empowerment acknowledged that it has channelled soft loans to small and medium scale businesses through the ruling Golkar party. The move is seen by many people as an attempt by Golkar to buy votes ahead of the election, said Sofyan A. Djalil, communication deputy for the ministry.

He said it is not a money-politics move since Golkar has only become a mediator to the needy. The credits were meant for Islamic schools (pesantren) and Adi Putra Thaher, head of small and medium scale enterprise department of Golkar happened to be the mediator.

Djalil said his ministry had only given approval based on proposal feasibility. "If the it is a good proposal, meaning they can pay it back and have promising business prospect, we will agree with it. So, for us it is not a matter of who propose or people behind proposal. It is just that Golkar gave the information. Any one can submit proposals for that kind of credits," he said.

Djalis could recall precisely what kinds of state-owned company soft loans that had involved Golkar. "In addition, not all credits were proposed to the ministry. Some proposal were handed directly to the state-owned companies."

Under a government regulation in 1994, state companies are required to set aside three percent of its profits for soft loans for the small and medium scale businesses. Of Rp 1.2 trillion of revolving credit since 1994, state companies had distributed Rp 200 million. The program was halted after Soeharto quitted presidency, resulting in a race between ministries to tap into the fund.

Since March 1997, State Enterprise Empowerment Minister Tanri Abeng has made use of the fund. The Far Eastern Economic Review reported recently that Golkar had used funds from state companies to win votes throughout Indonesia.

Tanri, for example, has ordered the social and manpower insurance company (Jamsostek) to extend Rp 100 mln to co-operatives in Tanah Datar, West Sumatra, when Golkar chairman Akbar Tandjung ran a campaign in the district.

The Review said Golkar leaders in the district acknowledged that move openly and regarded that as Golkar's "sincerity" to deal with Golkar's effort to help solve people problems.

"It was Golkar who made the first attempt to ask for that fund. The first would get it first," said Noer Pamuncak, Golkar leader for West Sumatra province.