Corruption, Collusion and Nepotism.
My Personal Experience
Crimes committed fifty years ago.
What remained Republican territory (RI) in 1948 was only Yogyakarta and Aceh. The Netherlands Indies Civil Administration (NICA) occupied Jakarta and other parts of Indonesia. The political tussle between the Republic and the Dutch Government was at it’s highest. In the occupied territories, the economy was recovering but practically all goods were rationed. The ministry of Economic Affairs (EZ), kept a tight control on prices and the black market therefor thriving.
My academic pursuit has turned to a dead end. My father told me, that if I was to find a job, to find a position, where there are plenty of opportunities for kickbacks (a "wet job" he said). I mention this not to disgrace him. Only to illustrate, that those who influence us most, for the better or for the worse, are those very close to us. It may even be our spouses.
One of the opportunities he mentioned was the Department of EZ. Among it’s sub departments, was the department of Industrial Rehabilitation, charged with the distribution of industrial supplies. That would be the right place, he said.
My application was immediately accepted. However the job opening was in Cirebon. Having been active in the struggle for independence, working as a Dutch collaborator in Cirebon of all places, could be a danger to my life, I told the Dutch interviewer. My friends will shoot me. I was sent to Pontianak instead, where I was a complete stranger.
I arrived there in April 1949. I was met by the local head of the office of Industrial Rehabilitation and taken to dinner at his bachelor’s home. Then he took me to the house next door. It was completely empty, no electricity, nothing except for a military folding bed surrounded by a mosquito netting. Somewhere in the corner was a burning candle. But my boss assured me that soon things will be different, and indeed it was.
The next day my boss and I visited a couple of shops where we were warmly welcomed. He introduced me as the second in command. When I came home that evening, I found my house already furnished including provisions in the kitchen. Electric power was connected.
The beginning of my Corruption
My rank was commies redacteur, quite a high rank in Pontianak. In that position I was to initial all allocations issued by the office of Industrial Rehabilitation. My boss will then sign it. Recipients of the allocation, as a show of gratitude, will come to my house to drop some banknotes,. That was the beginning. My savings account started to grow.
One of the largest recipients of the rations and who contributed the most to my saving account, came to my house one afternoon. I was having my siesta and reading in bed. I heard my houseboy telling him, that I was asleep, but the visitor insisted: "No problem, just wake him up". When I heard that through the thin wooden walls, I said to myself: "Now that you have sold your soul, the only thing left for you is to obey"
In February 1950 after the Round table conference in the Hague, The Dutch transferred power over all territories to the Republic of Indonesia, except Irian Jaya. I told myself that, as a government official in the Indonesian Republic, I shouldn't accept any more gratuities. Besides I had enough money to study in Holland. So I resigned.
With friends, we discussed, whether accepting money which one did not ask for, was unethical. I believed it was, because they gave money to me, due to my position at an office, which is distributing goods and material to the industry at official prices. Paying to government officials, will add to their cost. When I question myself, why I did what I did, the answer is perhaps that I did not care very much, for the Dutch Government. But under the Indonesian Government that would be unacceptable. How wrong I was.
The savings didn't last long, because of the new measures taken by the Republic. The measures were actualy a devaluation of the rupiah and including all bank accounts was cut in two. So I had only half of the value, and if one was to buy foreign exchange, he now has to pay three times as before.
I returned to Medan, and soon was looking for a job. I visited the Department of Labor, which then was still run by a Dutch official. After interviewing me for an hour and noticing that once I wanted to become an engineer, he said: Rachman you don't have the brains for it. You have shown interest in things technical, why don't you just sell them. That was the beginning of my career.
He proceeded to telephone all Dutch Trading Companies who were in the business of machineries and technical goods. He was auctioning me off literally to the highest bidder. I felt like some sort of a commodity, which perhaps I was. Lindeteves in Medan turned out to be the highest bidder and I accepted.
Credit to this Dutchman. My first month salary, was not to be turned over to him. He is just a government official doing his job.
Corruption
At Lindeteves I controlled the sale of small diesel engines and rice hullers. There was a great demand for them. With security improving, more farmers started to expand their rice paddies.
But foreign exchange control was still in force. Supply was minimal. If someone wants to buy an engine, I will say, that nothing was available. But if he wants one, there was the last one sold the day before, now waiting to be delivered. Maybe the buyer is willing to re-sell, usually at some 10-20 percent higher price. I simply made it difficult for buyers to buy..
If the prospect agrees, I will write an invoice with the standard price in the name of one of my customers, who is completely unaware of it. I pay the cashier, and the delivery order was then presented to the prospect.
One day my boss called me and inquired about this phantom customer, who in the period of six months has taken delivery of twenty diesel engines. I managed to persuade him not to visit the place of the customer. But I did get the message, besides a little lesson in management.
That was the most blatant form of corruption, I ever did.
Nepotism.
From the "earnings" at Lindeteves I got married. My wife was a close relative of the President Director of a Government owned Central Trading Company (CTC) established to compete with the likes of Lindeteves, and other Big Five companies. I got an invitation for an interview.
But the Lindeteves branch manager of the Medan branch was furious. He said it was me who reported that the company I was joining, was the worst company in town. I replied, if I don't improve it, who will……. After all, it was a government owned company, which was not doing well. I consider it my calling to do something about it.
The manager also reminded me that it was a breach of ethics. If one resigned from a company one should NOT immediately join another, in an identical line of business. In the new company I was to be in charge of technical goods, diesel engines, farm tractors and the like.
CTC agreed on my conditions in leaving Lindeteves, which was to triple my salary, to provide me a house and a car, a one year stint in Europe and a 5 year contract at a Public Notary. I assumed that they would not like me stealing, like I did at Lindeteves. Little did I know.
Collusion
I was doing well with tractors and diesel engines, but my marketing skills were put to the test when the company obtained a large foreign exchange allotment for cement. Our allocation for Medan was half a shipload.
I tried to get the market price, with only 2.5 percent of sweeping (part of consignment not in calculated). Nobody wanted it. Many prospects offered less than market price and 5 percent sweeping at that. Only one buyer was agreeable on market price, however with 5 percent sweeping. For weeks we haggled about the percentage of the sweeping.
When the ship was about one day out of port I succumbed. After all has been delivered and paid, the buyer came to my house with a bundle of money wrapped in old newspaper, which was exactly 2,5 percent of the price which I have wanted in the first place. (It did not dawn on me that this was Collusion in the purest sense. In large shipments the market will bundle together, and have only one spokesman to do the dealing.)
Next day I took the money to the cashier, and told my assistant to write up an extra debit note to the buyer, which will be on top of the earlier invoice. The manager had to sign the note. Later in the day, with that note in his hand, he came to my table and said: "But Rachman, this is your own money". I said no. If he is prepared to spent that amount of money, which I have asked at the start, then that money is the company's money, as I was bargaining on company's behalf. I insisted that he signs and have it delivered. Probably the Manager was in the collusion too.
I was promoted to manager of the Technical Department at the Head office in Jakarta in August 1955. Within a few weeks I discovered an employee doing exactly the same thing I was doing at Lindeteves, i.e. selling for 10 reporting for 8. I apprehended him and fired him on the spot. In the evening he came to my house saying that there are three others, doing the same. I called them into my office the following day. I told them, what the guy I fired has told me. I just said: "Now that you know that I know, you guys can stay." The three became exceptional employees.
Collision Course
Soon I was in a collision course with top management.
The Technical Department, which I ran, was the only department of the 5 departments, which is showing a profit in the fiscal year of 1956. I demanded our share, based on the statutes of the company. After putting aside all required contributions and reserves, I still would end up with a 10-month salary bonus for my employees.
But the board countered that the losses in other departments have to be offset by those making profit. But I am paid, only to run my department I said. I cleaned up my department and they should have done the same. I added that I would be more than willing to become the general manager. I also said that I couldn’t help to notice the sumptuous living standard of the board. The way they live is at the level of twenty times my salary, while I am only one echelon below them.
That did it. A clash was inevitable. On September, 1 1957 I was out of the company after 4,5 years with them. Later my wife received a funny telephone call, from the wife of the company’s president. What's wrong with your husband? Let him steal a little don't be such a puritan.
I have mentioned corruption, collusion and nepotism. I experienced them all.
Could I do without it? That is the following tale.
After I left my job, a pribumi company approached me to join them.
Never heard about them, so it must be a lousy company. When they said, they just signed the distributorship with International Harvester for the distribution of Farm machinery and Heavy Equipment, my eyes popped out. If you are good enough for them, I am good enough for you.
Apparently they had investigated me, and found out that leaving my former employer was not because of mal performance. And they needed me to run their agricultural tractors.
They have me trained in Australia, where I learned not only about tractors. I learned that an employee has to serve the shareholders, customers and employees alike, all at the same time. Now better known as stakeholders.
Back from Australia I proposed to our company, that we too should adopt a credo. Are we going to rob the country or should we only participate in projects, which benefits it? We chose the latter. We have done well in supplying construction and heavy equipment, to the Jatiluhur and the Brantas Irrigation projects. Dump trucks to the Jakarta Bypass Project. Construction equipment to the airport in Bali. Not to mention Palm oil factories and Locomotives. On farm machinery we have pushed my former employer out of the market.
One day the Bank of Indonesia invited us to participate in a tender to equip fully mechanized Rice Estates, at three locations, each the size of 10000 ha. That was in the latter part of the Soekarno regime. This was crazy plan, we pointed out to them. It can only collapse, with millions of losses. We refused to participate. Another company got the order. Czechoslovakian tractors and equipment were used, which ended up as scrap within five years.
So I conclude that
Corruption is a crime, even if you did not deliberately asked for favors. In the end it will be the customer, who has to pay, and the supplier or contractor who will be cutting corners.
Collusion is a way of working together to produce the largest benefit to the group. It is unethical, if used to cover up or to smother competition.
Nepotism to protect security is an idiosyncrasy. Your closest relatives can turn out to be most unreliable (like me VBG).
But if you care about your place of work, there is no need for KKN. I did not care about being a NICA employee. I did not care as an employee of a Dutch company. But I did care, when working at an Indonesian state company, but unfortunately my bosses, did not.
The only place I had really cared was at the pribumi company where I served for about 35 years.
Hope you enjoyed reading.