Cutting Employee Incentives, Sidoarjo Regent Ahmad Muhdlor Ali Detained by KPK

Sidoarjo Regent Ahmad Mudhlor was detained by the Corruption Eradication Committee (KPK) because he was suspected of enjoying tax incentive deductions worth IDR 2.7 billion.

KOMPAS/RONY ARIYANTO NUGROHO

Sidoarjo Regent, Ahmad Mudhlor Ali from East Java, was escorted to a detention vehicle after his arrest was exposed at the Corruption Eradication Commission (KPK) Building in Jakarta on Tuesday (7/5/2024).

JAKARTA, KOMPAS — The Corruption Eradication Commission finally detained the Regent of Sidoarjo Ahmad Muhdlor Ali , suspect in the alleged corruption case of cutting incentives for state civil servants collecting taxes and levies at the Regional Tax Service Agency or BPPD Sidoarjo, East Java. Muhdlor is suspected of enjoying deductions and incentives from state civil servants of up to IDR 2.7 billion. Currently, KPK is also investigating the possibility of money laundering in this case.

Muhdlor, who was named a suspect in a corruption case on April 16th, finally answered the KPK's summons on Tuesday (7/5/2024) after twice failing to appear. The Sidoaro regent was arrested by the KPK after being questioned for approximately 6.5 hours as a suspect in Gedung Merah Putih, Jakarta.

In a press conference at the KPK building in Jakarta on Tuesday afternoon, KPK Deputy Chairman Johanis Tanak explained that the detention of Muhdlor was a development in a previous case related to alleged corruption in the environment of the Sidoarjo Regency Local Tax Services Agency. Previously, the KPK had detained the Head of the General Sub-Section of BPPD, Siska Wati, and the Head of BPPD, Ari Suryono.

HIDAYAT SALAM

Deputy Chairman of KPK, Johanis Tanak (center) explains that KPK has detained Sidoarjo Regent Ahmad Muhdlor Ali regarding a corruption case in the environment of BPPD Sidoarjo Regency, at the KPK Building in Jakarta on Tuesday (7/5/2024).

"Based on the findings of the investigation team, AMA (Ahmad Muhdlor Ali) as the Regent of Sidoarjo is suspected of being involved in the flow of money from parties who were previously arrested by KPK. AMA was detained for the first 20 days from May 7 to 26, 2024 at KPK's branch prison," said Tanak.

According to Tanak, as the regent, Muhdlor has the authority to regulate awards for specific performance in implementing tax collection and retribution in the Sidoarjo Regency Government (Pemkab) environment. With this authority, Muhdlor made a regulation in the form of a Regent’s Decision as the basis for disbursing regional tax incentive funds for employees in the Sidoarjo BPPD environment for four quarters in the Fiscal Year 2023.

With that authority, Ari Suryono as the Head of BPPD instructed Siska to cut the tax incentive funds for civil servants (ASN) in BPPD Sidoarjo by 10-30 percent, in accordance with the size of the incentive received. Throughout 2023, Siska was able to collect incentives from employees amounting to Rp 2.7 billion.

Based on the investigation team's findings, AMA (Ahmad Muhdlor Ali) as the Regent of Sidoarjo is suspected of also enjoying a flow of funds from the parties previously detained by the Corruption Eradication Commission (KPK).

"The money is intended for the needs of the US (Ari Suryono) and the money is predominantly allocated for the AMA," said Tanak.

Ari Suryono also managed the technical aspect of cash delivery from Siska to a close associate of the Regent of Sidoarjo. Not only that, Ari also coordinated the allocation of incentive fund to Muhdlor through several intermediaries trusted by the Regent of Sidoarjo.

"Regarding the process of receiving money from AMA, the handover was directly carried out by Siska on AS's orders in the form of cash, some of which were handed to the Regent's driver. Every time the money was handed over, Siska always reported it to AS," said Tanak.

Delve into money laundering

Tanak stated that the investigation team is still looking into the possibility of money laundering committed by Muhdlor. Investigators will continue to question several witnesses related to the alleged corruption case.

For his actions, Muhdlor was suspected of violating Article 12 letter f of Law Number 31 of 1999 concerning the Eradication of Corruption Crimes as amended by Law Number 20 of 2001 concerning the Eradication of Corruption Crimes juncto Article 55 Paragraph ( 1) 1st Criminal Code.

Director of Investigation of the Corruption Eradication Commission, Asep Guntur Rahayu, added that the investigation team has other information from witnesses and evidence that has been obtained. The discovery of deposits up to IDR 2.7 billion serves as initial evidence for investigators to trace the flow of its usage. "At this time, we cannot provide certainty on the total amount of money received by the suspect because the developments are still being carried out by the investigation team. So, please wait,” said Asep.

During that occasion, Asep also explained the accusation of the slow handling of Mudlor's case because several parties allegedly involved had been caught in a sting operation (OTT) on January 24th. According to Asep, the KPK's OTT at the time was not perfect because it only managed to capture Siska, not the Regent of Sidoarjo.

Previously, Siska was arrested along with 10 others in a sting operation on January 24, 2024. However, only Siska was named a suspect. In the operation, KPK investigators confiscated cash amounting to Rp 69.9 million from alleged embezzlement and acceptance of Rp 2.7 billion in 2023.

Also read: KPK Summons Sidoarjo Regent to Clarify Case of Withholding Tax Incentives

"We need to explain that this operation (OTT) is not perfect, meaning not all the officials that we targeted in the operation were successfully taken in. We only brought in Ms. SW. However, in the development of the investigation, the Head of BPPD and the Regent of Sidoarjo were also implicated," said Asep.

The arrest of Sidoarjo Regent Ahmad Muhdlor Ali, who is suspected of being involved in a corruption case regarding the deduction of local government revenue agency (BPPD) civil servant incentives worth Rp 2.7 billion, adds to the list of Sidoarjo district heads who have been caught up in corruption cases. Prior to Ahmad Muhdlor Ali, the former Sidoarjo Regent who was replaced, Saiful Ilah, was also declared a suspect by the KPK in a corruption and gratification case. The previous regent, Win Hendarso, who served two terms (2000-2010), also stumbled upon a corruption case regarding district funds worth Rp 2 billion. (Kompas.id, 31/1/2024)

KOMPAS/ADRYAN YOGA PARAMADWYA

Director of Investigation and Acting Deputy of Enforcement and Execution of the Corruption Eradication Commission (KPK), Asep Guntur Rahayu, KPK Vice Chairman, Johanis Tanak, and KPK News Division Head, Ali Fikri (from left to right) provided a statement to the press at the Corruption Eradication Commission (KPK) building in Jakarta, on Wednesday (11/10/2023).

Regarding this matter, Asep stated that all cases that have been dealt with by the Corruption Eradication Commission (KPK) will immediately be sent to the KPK prevention deputy. Consequently, the practice of corruption will become a prevention material by the KPK prevention deputy.

"So, when the case is over, we won't do this. "There are lessons learned from the completed investigation process, such as creating a workshop so that it doesn't happen again," said Asep.

Muhdlor, who was questioned by reporters about the corruption case that implicated him after a press conference, chose to remain silent. Muhdlor continued to lower his head as he walked towards the detention vehicle that brought him to the KPK Branch Detention House.