A political war?

A political war?

No one can deny that the export loan scam involving Bank
Negara Indonesia (BNI) has done some serious damage, not only to
the Indonesian trade and banking industry, but to the country's
economy as well.

The scandal, which has been the talk of the town for the past
several weeks, involves the issuance of no less than 41
fictitious letters of credit (L/Cs) for a total of Rp 1.7
trillion (US$291.2 million), in a classic case of collusion
between banking officers and businesspeople. Police have so far
named about a dozen suspects in the crime.

The case naturally threatens to damage the already
questionable credibility of the country's import and export
procedures by once again throwing the spotlight on the corruption
that remains rampant in the country's bureaucracy and business
sector. Immediate proof of this damage could be found in the
worsened sentiment on the Jakarta Stock Exchange, as reflected in
the 0.4 percent fall in the composite index at end of last month.

Quite appropriately, 21 witnesses have so far been summoned
for questioning by the police, including 16 BNI employees, two
private company executives and three officers from related banks.
Police have also confiscated US$238,000 in cash and documents,
and ordered 29 bank accounts belonging to companies and
individuals allegedly linked to the scam blocked.

Bank Indonesia, which oversees the country's banking industry,
has for its part blamed the directors of BNI for failing to act
on an internal audit that reported something serious amiss in the
bank, long before the scam became public knowledge.

So much for the sinister practices that apparently still
thrive in parts of our business environment and banking industry.
The question that interests us at this point concerns not so much
the practice of corruption and collusion, or even the scale of
the crime committed, but rather the delay in bringing the affair
to the attention of the public. For if the BNI management was
notified of irregular practices months before the public was made
aware that something was amiss at the bank, the very fact of this
delay could point to yet another problem the country must
confront.

It is tempting in this context to refer to observations made
last week by Ikrar Nusa Bakti, a researcher at the Indonesian
Institute of Sciences (LIPI), to the effect that the scandal --
which was initially thought to be a mere run-of-the-mill affair
-- has taken on a political dimension that could lead to a brutal
political war ahead of next year's general election. In other
words, the scam could be used by one political party to discredit
another, with neither side actually bothering to fix the root of
the problem itself -- which is corruption.

Although no parties were mentioned, it is obvious from the
names of those believed to be involved in the BNI scam that the
LIPI researcher was referring to the Golkar Party. At the same
time, it may or may not be a coincidence that the public furor
over the BNI scam was unleashed at the same time that reports
emerged of a suspicious business deal involving Mohammad Rizki
Pratama, the son of President Megawati Soekarnoputri, who is also
the chairwoman of the Indonesian Democratic Party of Struggle
(PDI Perjuangan).

An investigation team set up by the House of Representatives
reportedly found irregularities involving the contract giving
Mohammad Rizki control of 30 hectares of the 44-hectare Jakarta
Fairground in Kemayoran, which is managed by the State
Secretariat. The findings were announced by Effendy Choirie, who
is a member of former President Abdurrahman Wahid's National
Awakening Party (PKB) and no admirer of Megawati.

Although the President is reported to have asked her son to
withdraw from the venture, the issue could benefit the Golkar
Party in a possible political war kindled, presumably, by the
bloody clash between supporters of the two parties in Buleleng,
Bali, last month.

What is cause for concern here is not so much the possibility
that the as yet passive enmity could erupt into renewed clashes,
but rather that a political war would be likely to end in a
political deal or settlement. If that happens, both the BNI scam
and the Kemayoran case would most likely be buried.

It is primarily for this reason that Indonesians should
welcome the informal talks that have been held in recent days
between leaders of these two major parties. In both the BNI and
Kemayoran cases, let the law take its due course.