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Indonesia to probe $38 million scandal 'Kostradgate'

Source
Straits Times - September 23, 2000

Jakarta – The Indonesian Parliament plans to investigate allegations of a 189-billion-rupiah (S$38 million) corruption scandal at a foundation run by the Army Strategic Reserves Command (Kostrad), although the allegation has been dismissed.

House Deputy Speaker Muhaimin Iskandar told reporters on Thursday that the House, currently still in recess, has included the "Kostradgate" in its upcoming agenda. "If the House finds indications of irregularities, it will ask the Attorney-General's Office to initiate legal proceedings," he said.

The scandal first surfaced in April when executives of the Dharma Putra Foundation could not account for a 189-billion-rupiah fund which had been withdrawn from its subsidiary company, PT Mandala Airlines.

The House's Commission I for defence and foreign affairs, and Commission IX for finance and state budget, have been assigned to handle the probe, the Deputy Speaker said. The two commissions will hold a hearing with the State Audit Agency (BPK) and the army's Inspectorate-General to discuss the results of their audits into the foundation's finances.

The army's Inspectorate-General this week cleared Kostrad of any corruption charges in the foundation, although it admitted that the foundation's finances had been managed improperly. BPK has also audited the foundation's finances, but the results have not been made public.

The Deputy Speaker said the House's investigation was necessary to ensure public accountability of all the military's businesses, including Kostrad's foundation. "None of the military units have publicly disclosed the sources of their funds aside from those allocated in the government's budget."

Mr Taufiqurrachman, chairman of the Nation Awakening Party (PKB) faction, said the military is not immune to the law. "This Kostrad case will serve as a good lesson for the military," he said.

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