Baligate whistle-blower deals with the fallout
JAKARTA (JP): Banking analyst Pradjoto must be the envy of people who fight a continuing battle against weight gain. He has shed eight kilograms in the past three months, but it was not on purpose.
"I weighed 60 kilograms, but now it's 52 kilograms. My pants are too big," he said.
It is not because he is counting calories or exercising more, but from the fallout of blowing the whistle on one of the biggest scandals in the country in recent years.
He told a seminar at the end of July that a senior official of the Indonesian Bank Restructuring Agency (IBRA) and two executives of the Golkar Party had colluded to force Bank Bali to provide a huge commission -- 60 percent of the transaction -- to help the bank recoup its claims on closed banks.
His statement opened up a Pandora's box of political intrigue featuring such high-profile characters as State Minister of the Empowerment of State Enterprises Tanri Abeng, chairman of the Supreme Advisory Council A.A. Baramuli and even then president B.J. Habibie.
Pradjoto, 46, was terrorized. Several suspicious-looking strangers were seen pacing in front of his house, he received threatening phone calls and a motorist deliberately rammed his car before speeding off.
His wife, Kirana Dewi, received a call demanding that Pradjoto organize a news conference to disavow the truth of his statements about Bank Bali. The caller threatened to kill Pradjoto's family if he refused.
"I asked my wife what she would do if I called a news conference, and she said she would ask for a divorce because she would be ashamed of marrying somebody who was so inconsistent," Pradjoto said.
He had not planned to disclaim his statements, but his wife's comments gave him strength.
The father of four including two teenagers, Pradjoto is also concerned with issues like drugs and sex education.
"I clip articles from newspapers and give them to them to read, and I also buy them books. And then we discuss the writing. We are open about this."
Pradjoto married Kirana, a graduate of the School of Letters of the University of Diponegoro in Semarang, in 1982. Pradjoto graduated from the School of Law of the University of Indonesia in 1980 and then worked at Bapindo, a state bank. He studied foreign direct investment at Tokyo University in 1986. Two years later he returned to Indonesia with his master's degree. From 1988 to 1991 he worked on his doctorate, but failed to finish it when Bapindo refused to provide him with financial aid.
In an interview with The Jakarta Post on Tuesday, Pradjoto, who writes for several media publications, shared his ideas as an expert on the country's banking woes and the aftermath of Baligate.
How did your law firm come into being?
After I was told to resign from Bapindo, I had no permanent job. I did not want to work for conglomerates, I wanted to fly my own flag. So, I visited a "close friend" who was quite successful. I wanted to borrow some money, but as I took a seat he said: "Never owe your personal standing to somebody else." I left right away. But I do not bear him any grudge. I thank God I learned that I should not act like him. And I also learned well what is the difference between a friend and an acquaintance.
A friend then lent me Rp 10 million, which allowed me to rent a 20-square-meter room in the Kartika Chandra building. I divided the office into two, for me and my secretary. I promised to return the money in six months but I was able to do it in four months. He sent it back, saying that it was for my children.
Because I speak Japanese, 95 percent of my clients are Japanese. But now, after the crisis, the number of my Japanese clients has decreased by 75 percent.
When was your most difficult time?
Things were not easy when I was in Japan. The scholarship was not enough as I brought my wife and two children there. I washed dishes, I worked in a gas station, I became a laborer, transporting books when the library moved ... The good thing is that as long as you worked hard, it was fine, the payment was good.
But when I returned to Jakarta, it was totally different.
I bought this (big, attractive) house in 1997. I used to live in a small house in a crowded area in Serua, Ciputat, you bumped into people when you walked outside. I was really poor. My wife made bread and fruit cocktails, packaging them in plastic bags and selling them to several shops.
What made you interested in banking law?
My father was a law graduate -- he was the founder of Perdaulatan Rakyat in Yogyakarta. When I was in junior high school, my father gave me a book by Vivekananda with an introduction by Bung Karno. It was a wonderful book about law, philosophy, humanity ... It made me want to study law. That's why I went to law school.
From 1986 to 1988 I studied foreign direct investment in Japan. When I returned to Indonesia in 1988, I learned that the government had issued a banking deregulation, called Pakto 88. That deregulation opened the barrier to entry, so that traders could enter. This could result in the interlocking of ownership and transfer of pricing on a large scale, which would end in the collapse of the banks. How could they make such a policy? And then I became interested in the issue, I would watch closely this issue. And you see, it really happened.
Our banking sector is now in ruins. What's the first thing to do to fix it?
The new government must have a vision about how important it is to rebuild the banking sector. We need integrated actions to guard this sector. The problems have become systematic, so we need systematic restructuring. In fact, I prefer the word reconstruction because it is completely shattered. We can't solve it with detached policies, there must be comprehensive steps.
What has happened is that amid the lack of these comprehensive actions, the banks were assaulted with things like in the case of Bank Bali. How sad.
I divulged the scandal because I knew for sure that there were 12 banks which would suffer because of a similar scam -- Habibie even admitted that there were 20 banks -- I did not have much time, less than one week. If I was late, the mediation process for the other 12 banks would have started.
I had no political motives at all. But it turned out that there were "monsters" behind the case. There might be a power which systematically runs this mediation business. Whatever the risk, I will fight because this is very dangerous. If the banking business falls, then the economy will collapse.
The media, the public, observers pointed their fingers at Habibie, Baramuli, Tanri Abeng and some other people as if they were suspects. We can't say that they are guilty, but we can't say that they are innocent, either. But how can we say that they are guilty or innocent if they are not thoroughly examined? The legal process must not be affected by psychological burdens.
After you disclosed the case, you were terrorized. Has it continued?
No, at least not physically, not like in the month after I revealed the scandal. I was like a drug kingpin who must be arrested.
After the scandal was disclosed, for one whole month I received a flood of invitations to speak in seminars on more or less similar topics. I was fed up. Once I had to speak three times a day, in the morning at the Regent Hotel, in the afternoon at Hotel Borobudur and in the evening at the Financial Club. I arrived at home really tired. But for me it is like ibadah (religious service). If I work in my office, I could make much more money without having to go out.
But it is not like this all the time. When we have to do something for the public interest, we need to set aside our private interests. I never refuse any invitations and I never set my price. If I have to speak in front of students, I even dig out my pocket for the organizing of the event.
I returned to my normal life only early this month and I started to go to my office only last week.
I did not think that this Bank Bali case would be that big, that it would make the International Monetary Fund put pressure on us.
How do you see the pressure?
Let's look at the matter clearly. Some people in the (Habibie) government said that the IMF, World Bank and Asia Development Bank threatened Indonesia. They said this to stir up nationalism, but I think that is narrow-minded nationalism. I think we should not see it as a pressure, but as an effort to make us get back on the right track, to uphold prudent, good governance.
It is impossible for us to say goodbye to the IMF. Thailand and South Korea could say so because they have recovered even though the crisis there, like here, started at the same time, in 1997. Thailand was very firm, the government was changed immediately, and officials who made mistakes were sent to jail.
What about IBRA?
It was quickly set up to handle the crisis, but it is a subordinate of the government, so it is easily interfered with. It must be independent, held responsible to the House of Representatives and under the supervision of the Independent Review Committee. The organization structure, personnel management, human resources, the working system, must be improved. The way they handle the issues does not show that they are handling a crisis.
I recommend that IBRA divides the debts into two, those assumed before the crisis and those after the crisis. IBRA can handle those before the crisis, while the banks which have debts because of the crisis are handled separately. Assets of these banks would then be auctioned in the banking sector so that the process of restructuring would be faster.
What about our situation compared to other countries?
It is very specific. There are many countries which faced similar problems, like Mexico, Thailand and Japan. They also dealt with crises, but Indonesia is different. While other countries are really serious in handling the problems, we pretend to be serious. (sim)