The Cooperatives and Small and Medium Enterprises Ministry has clarified a statement made by presidential expert staff member Gracia Billy Mambrasar, who claimed that 21 young Papuan entrepreneurs under his company had secured Rp 1.44 billion (US$92,286) from the ministry’s revolving loan management agency.

Minister Teten Masduki was quoted by kontan.co.id as saying on Thursday that the ministry could only channel loans to cooperatives, while the 21 entrepreneurs' companies were not cooperatives. He said the ministry appreciated and fully supported the entrepreneurship training in Papua and he suggested the young Papuan entrepreneurs establish cooperatives.

His statement comes amid public scrutiny of President Joko "Jokowi" Widodo's millennial staff members who have been accused of abusing their positions for personal gain.

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In February, Billy and fellow millennial presidential staffer Putri Tanjung met with Teten Masduki and other officials from the ministry to introduce Billy’s organization, Papua’s Youth Movement, which included business training courses by his company, tempo.co reported.

Billy explained that the movement aimed to support 308 young entrepreneurs in Papua. Billy said the ministry would help channel Rp 1.44 billion in soft loans to 21 Papuan entrepreneurs that had been trained by his company. Each business unit would receive funds ranging from Rp 12 million to Rp 30 million.

He said a company called Kreavi, in which Putri is the chief business officer, would help the Papuan entrepreneurs to “rebrand” their products, tempo.co reported in February.

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Billy’s endeavor and the government support came under public scrutiny after his colleagues within the millennial presidential staff, Adamas Belva Syah Devara and Andi Taufan Garuda Putra, resigned recently following accusations of conflicts of interest.

Gadjah Mada University Center for Anticorruption Studies (Pukat UGM) head Oce Madril said the loan program for Papuan entrepreneurs could lead to a conflict of interest as Billy was leading his company while also holding a position as a presidential staff member.

“He can use his influence for his company’s interests, such as by allowing them to work on government projects,” said Oce. “Officials at the cooperatives ministry could have also acted with a conflict of interest for making a decision that lead to such conflict.” (dpk/aly)

Editor’s note: This article has been updated to include comments on potential conflicts of interest.