Disclose or suffer<\/p>\n
Indonesia's Supreme Court Justices, who are considering a
\nlegal opinion on whether the full results of an independent audit
\nof the transactions relating to the Bank Bali scandal should be
\ndisclosed, must take into account the devastating impact the
\nscandal has had on the country's economic reform program when
\nthey make the decision.<\/p>\n
The scandal, which involves the transfer of Rp 546 billion
\n(about US$80 million on the June rate) from Bank Bali to PT Era
\nGiat Prima (EGP), a company controlled by officials of President
\nB.J. Habibie's Golkar Party, hit at the heart of the reform
\nprogram -- bank restructuring. The case also impinged the
\nintegrity of the Indonesian Bank Restructuring Agency, which
\ncurrently manages Rp 600 trillion ($75 billion) in state assets.<\/p>\n
The scandal prompted the International Monetary Fund, the
\nWorld Bank, the Asian Development Bank and most other government
\ncreditors to suspend further aid disbursements to the country,
\nbecause, as they stated, they no longer trusted the government.
\nAt a time when the state budget relies on foreign aid for almost
\n35 percent of its total revenue, the suspension of aid amounting
\nto $2.7 billion to the end of this year or $4 billion to March is
\nterrifying.<\/p>\n
No less damaging is the loss of foreign investor confidence in
\nthe country because the Habibie administration, instead of
\ntransparently and quickly resolving the high-profile, politically
\ncharged case, resorted to all the tricks at its disposal to cover
\nup the affair which allegedly involved Habibie's close aides and
\nGolkar executives. Habibie and Satrio Billy Joedono, Chairman of
\nthe Supreme Audit Agency, invoked numerous legal pretexts to bar
\nthe public disclosure of the PricewaterhouseCoopers (PwC) audit,
\ndespite the protestations of the IMF, the World Bank, the
\nprevious House of Representatives and most legal consultants.<\/p>\n
Habibie, speaking at a media conference on Friday evening,
\neven resorted to shooting the messenger, in this case PwC, which
\ndiscovered numerous indicators of corruption, fraud,
\nnoncompliance, irregularities, undue preferential treatment,
\nconcealment, bribery and misappropriation in the payments from
\nBank Bali to EGP.<\/p>\n
The President accused PwC of having exceeded its authority,
\nasserting that the company should have limited its work to
\nauditing the books, and not interrogating people linked to the
\nscandal. He quoted the National Police, which is now handling the
\ncase, as complaining that PwC appeared to have usurped police
\nauthority. But this point of argument appears hollow.<\/p>\n
Nothing in the terms of reference in the agreement between PwC
\nand the Supreme Audit Agency, which hired the auditor, indicated
\nthat the audit was simply meant to be a general audit. The
\nassignment was clearly defined as an investigative audit;
\ntherefore the scope of the audit was not limited to checking the
\nfinancial records of the involved parties.<\/p>\n
The terms of reference in the agreement with PwC were quite
\nbroad, including: Reviewing the government guarantee scheme for
\nbank deposits and claims and the procedures for claim payments;
\ninvestigating whether the cession agreement between Bank Bali and
\nEGP influenced the payment of the bank's claim; tracing the flow
\nof payments made by EGP and the flow of return payments;
\nreviewing whether there were other transactions similar to the
\nBank Bali cession agreement.<\/p>\n
According to these terms of reference, interviews were
\nrequired and the process of tracing funds from the Bank Bali
\npayment necessitated checks on a number of bank accounts. But
\nwhen the investigative audit discovered about 150 transactions
\ninvolving the transfer of large sums of money from EGP executives
\nto senior government officials and companies affiliated with
\nGolkar leaders immediately after the Bank Bali payment to EGP,
\nthe government cried foul. PwC was accused of exceeding its
\nauthority. What all the arguments and charges boil down to is
\nnone other than a deliberately orchestrated cover-up of high-
\nlevel corruption, which, by the way, is one of the underlying
\ncauses of our current economic crisis.<\/p>\n
If the Supreme Court justices are serious about enhancing law
\nenforcement, maintaining the commitment to combat corruption and
\nother abuses of power and helping regain domestic and
\ninternational investor confidence in our economy, they should
\nvote in favor of the full public disclosure of the PwC audit
\nreport. Any other decision would only worsen the country's
\neconomic crisis, triggering social and political stability at the
\nrisk of national disintegration.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/disclose-or-suffer-1447893297",
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"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
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