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Kiagus Ahmad Badaruddin: I Can Take Chaos If It Brings Results
The head of the Financial Transaction Report and Analysis Center (PPATK), Kiagus Ahmad Badaruddin. Image credit: Ttjen.kemenkeu.go.id
Tuesday, 31 January, 2017 | 15:40 WIB
Kiagus Ahmad Badaruddin: I Can Take Chaos If It Brings Results

TEMPO.CO, Jakarta - When he was still the inspector-general at the Ministry of Finance three months ago, Kiagus Ahmad Badaruddin, 59, was angered by a report on a sum of Rp 3 billion that had been deposited into his wife's account. It shook him, particularly since he was being considered for the position of chairman of the Center for Financial Transactions Reporting and Analysis (PPATK).

That report spread to the Presidential Palace and to the finance ministry. Finance Minister Sri Mulyani, who recommended Badaruddin to be PPATK chief, took a deeper look at the report. "She asked me what the money was all about," recounted Badaraddin, or Badar as he is familiarly known.

He replied that the money was a transfer from his own account, and that the bank had made an administrative error. "I told her I would refuse to take over the assignment, if it were proven that my wife had received that money from someone other than myself," Badar, who was once bureau chief of finance and planning at the Corruption Eradication Commission (KPK).

As soon as he was set up at the PPATK, with his deputy Dian Ediana Rae, Badar set up three new desks: fiscal issues, narcotics-terrorism, and financial technology (fintech). These three desks represent the basic sources of money laundering. 

Badar promised not to be selective when he investigates suspicious transactions, including those that might involve his former colleagues at the finance ministry. 

Two weeks ago, Badar met with Tempo reporters Sapto Yunus, Anton Aprianto, Agoeng Wijaya, Reza Maulana, and Raymundus Rikang for an interview at his office in Central Jakarta. He shared around his tasks and his new responsibilities, which included looking at the funding sources of terrorists, assisting the finance ministry in digging up potentially taxable income, and finding out to what extent and how law enforcers follow up on PPATK's investigation results. "Even if its chaotic, but if it produces results, I'm okay with that," said Badar.

When did you first find out about your new job as the new PPATK chairman?

I was inspector-general at the finance ministry, when at the end of a routine senior management meeting, I was asked by Ibu Sri Mulyani to come into her office. She said, "Pak Badar, you will be assigned to the PPATK, but the final decision will depend on the President."


Did you immediately accept it? 

I never refuse an assignment. I saw it as part of my long career path as a civil servant, not a special maneuver to get the PPATK chairmanship. I accepted the assignment as a way of giving back to the state, which has given me a job and an education, even an overseas one.


Did Sri Mulyani have any special message for you after you were sworn in? 

Work well. You are expected not only to carry out PPATK's work related to money laundering and tracing terrorism funds, but also to support the financial system and improve the economy.


During the selection process, we heard about a suspicious Rp3 billion transaction into your wife's account. How did you explain this?

Ibu Sri Mulyani asked me about this transaction. The Rp3 billion was money from my personal account to my wife's on January 3, 2013. The rumor that spread at the time was that my wife had accepted the money from some unidentified person. What happened was a simple bookkeeping mistake by the bank. It should have been recorded as an intra-account transaction, not a cash transaction.


Was Sri Mulyani suspicious?

She asked me, "Pak, what was that money?" I replied, "I remember that was my own money, but tomorrow I will ask the bank for an explanation." Not long after, the bank complied, sending us a letter clarifying its error.


What was the transfer for?

I did it because my wife's account had no cash and my account had some money in it. All my life, that was the only time I transferred money to my wife. The transaction did not breach any law because I transferred my own money to my wife's account. Please check the report on my personal wealth, in which the amount of my assets is listed.


(According to the Personal Wealth Report of State Officials uploaded onto the KPK website, Badar's assets were valued at Rp13.5 billion and US$570,000, as of November 30, 2015.)


How can a government official like yourself have so much money? 

I have been a civil servant for 40 years. I was also a commissioner at the (state-owned) State Gas Company (PGN) for about seven years and a (state-owned bank) BNI commissioner for three years. I received a substantial amount of tantiem (company profits shared with commissioners). Today, my income is substantially lower because I am unable to concurrently take up a commissioner's job. Thankfully, my salary is Rp44.5 million per month.


So, why was that transfer seen as suspicious? 

An internal PPATK person who reported it got the information from the bank. When it was traced, my name came up. That's why I got upset at the bank. But on closer look, I noticed that it was money from my account to my wife's in the form of a transfer, not cash. It was then that I refused to take the job as PPATK chief, if it were proven that my wife had accepted money not from me.

What new ideas have you initiated at the PPATK?

We set up three new desks: fiscal, narcotics-terrorism, and financial technology (fintech). These desks represent the basic sources of money laundering. Our collaboration with authorities at the customs and tax offices, the KPK, the state intelligence agency (BIN), the police, the national anti-terrorism agency and the attorney-general's office (AGO) will be upgraded. Our hope is that we will be able to deter those who plan to launder illicit money. We also consistently send reports of our analyses, whether we are asked to or on our own initiative.


What problem would you like to resolve in the short run? 

We will assist the tax directorate-general in seeking out new prospects to increase state revenues through taxation. They need comparative data in order to read the potential of tax-payers. These people do their own self-assessment when they fill out out their tax returns, but many tax-payers are dishonest. As an organization dealing in financial intelligence, we can find the truth of every tax reports.


How do you do that?

Through the banking system. We are authorized to ask for bank data if there is a suspicious financial transaction. For example, a taxpayer reports having 10 accounts, but according to our analysis, the correct amount is 30 accounts. So the unreported accounts could be the source of the person's transactional activities. (*)


Read the full interview in this week’s edition of Tempo English Magazine

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