BI Governor's conviction<\/p>\n
The Central Jakarta District Court's sentencing of Bank
\nIndonesia's Governor Sjahril Sabirin to three years in jail for
\nhis involvement in the 1999 Bank Bali scandal surprised most
\nlawyers and analysts, who had expected his acquittal after three
\nprincipal defendants in the same corruption case had earlier been
\njudged as innocent.<\/p>\n
As Sjahril has decided to appeal, we should let the higher
\ncourt or the Supreme Court make a final legal decision on that
\nmatter, a process that may take until the central bank governor
\nofficially ends his five-year term in March, 2003.<\/p>\n
The verdict should be welcomed as evidence of a more concerted
\neffort by the government to combat corruption. But the decision
\nraised questions as to why Sjahril was convicted while the
\npersons who were primarily responsible for and were the main
\nconspirators in the crime were declared innocent.<\/p>\n
We are also troubled by the inconsistencies in the judgment
\nand the discriminatory manner in which the Attorney General's
\nOffice prosecuted those suspected of involvement in the scandal.<\/p>\n
Sjahrir was found guilty of corruption, as he approved Bank
\nBali's claims for Rp 905 billion (US$80 million based on the
\nrupiah rate in mid-1999) in inter-bank claims in violation of
\nprudential banking regulations. However, three main defendants --
\nRudy Ramli, Pande Lubis and Djoko Tjandra -- were acquitted
\nbecause the judges decided that because the Bank Bali scandal
\ncaused no losses to the state, it could not be classified as
\ncorruption.<\/p>\n
If breaches of prudential banking rules were the main reasons
\nthat led to Sjahril's conviction, then justice is not blind here,
\nbecause the decision to pay Bank Bali's claims went through a
\nmultistep process involving then minister of finance Bambang
\nSubianto, deputy chairmen of the Indonesian Bank Restructuring
\nAgency (IBRA) Farid Harianto and Pande Lubis and several
\ndirectors at the central bank.<\/p>\n
The Bank Bali scandal was indeed a classic case of corruption
\nand patronage politics within the government, which has been
\nassessed as one of the most corrupt in the world.<\/p>\n
A special investigation of the scandal conducted by
\nPricewaterhouseCoopers at the request of then IBRA chairman Glenn
\nYusuf and the Supreme Audit Agency in late 1999 uncovered
\nnumerous indications of fraud, noncompliance, irregularity,
\nmisappropriation, undue preferential treatment, concealment,
\nbribery and corruption during the processing and payment of Bank
\nBali's claims.<\/p>\n
PwC discovered, with the support of more than 37 documents as
\nexhibits to validate its findings, that Bank Bali's claims, which
\nhad been rejected as ineligible for payment under the blanket
\nguarantee scheme by IBRA and the central bank, suddenly gained
\nspecial attention from both institutions in February, 1999 .<\/p>\n
The claims were not only reexamined by both institutions soon
\nafter Rudy Ramli hired PT Era Giat Prima, a company owned by
\nleaders and supporters of the Golkar party, as a broker to
\ncollect the loans. The joint ruling of the minister of finance
\nand the central bank on the requirements for claims to be paid
\nwere suddenly amended in May, 1999 to make the Bank Bali claims
\neligible for payment.<\/p>\n
The PwC report describes a flurry of meetings between then
\nminister of finance Bambang, Rudy, PT Era Giat Prima's directors
\nDjoko Chandra and Setya Novanto, Golkar leader A. Baramuli, IBRA
\ndeputy chairman Pande Lubis, minister of state enterprises Tanri
\nAbeng and several other Golkar executives between February and
\nMay, 1999, discussing the processing of Bank Bali's claims. Yet
\nthe report mentioned only one such meeting at which Sjahril was
\npresent.<\/p>\n
The investigations also discovered how almost all the senior
\nofficials involved in the processing of the claims had actually
\nknown of the \"cessie\" (debt collection) agreement between Bank
\nBali and Era Giat Prima.<\/p>\n
The debt collection service was unnecessary because if the
\nclaims did not meet the requirements set by the minister of
\nfinance and the central bank, nobody could have made them valid
\nanyway.<\/p>\n
But the fact was that it was only after the signing of the
\nagreement, Bank Bali's claims were reviewed and made valid and
\neligible for payment after both the minister of finance and the
\ncentral bank amended their joint ruling on the requirements.<\/p>\n
PwC also discovered how numerous transfers of funds suddenly
\nflowed out of Era Giat Prima's and Djoko's accounts, immediately
\nafter Bank Bali paid Rp 546 billion in broker's fees to the
\naccounts of a number of Golkar leaders and many other senior
\ngovernment officials and businessmen affiliated with the Golkar
\nparty. These transactions involved techniques commonly associated
\nwith money laundering, such as currency swaps, foreign exchange
\ndeals and cash withdrawals.<\/p>\n
But then attorney general Marzuki Darusman, himself a Golkar
\nleader, did not make any effort to follow the money and uncover
\nthe whole truth about the scandal.<\/p>\n
The report describes how IBRA deputy chairman Pande Lubis and
\nBank Indonesia's director and deputy director for banking
\ndevelopment division Erman Munzir and Dragono Lisan seemed to be
\nthe most responsible for verifying and processing the claims. Yet
\nonly Lubis has thus far been brought to court, and was eventually
\ndeclared innocent.<\/p>\n
Sjahril's conviction will therefore not help to improve the
\npublic's confidence in the government's credibility and
\nresoluteness in law enforcement, notably in the fight against
\ncorruption, if others strongly suspected of involvement in the
\nBank Bali scandal are not prosecuted.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/bi-governors-conviction-1447893297",
"image": ""
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"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
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