BPK admits limits in bank scandal audit

BPK admits limits in bank scandal audit

JAKARTA (JP): Head of the Supreme Audit Agency (BPK) Satrio B.
Yudono said on Tuesday that legal restrictions and time
limitations prevented an audit by PricewaterhouseCoopers (PwC)
from confirming if influential figures were involved in the Bank
Bali scandal.

However, Yudono confirmed that fraud was committed and said it
was now up to the police to investigate further.

"We have handed over (the audit results) to the police because
we're now stagnant," he said after a meeting with several members
of the special investigation team of the House of
Representatives.

Yudono said BPK and PwC were powerless to act when several
influential people declined to be interviewed.

He said the 38 people who could not be interviewed included
the head of the Supreme Advisory Council, Arnold A. Baramuli, and
State Minister of the Empowerment of State Enterprises Tanri
Abeng.

He added that personal bank accounts of several people also
could not be audited.

"We recorded (names of people) who objected and reported them
to the police for further investigation," he said.

The scandal stems from the transfer of Rp 546 billion from the
bank to PT Era Giat Prima (EGP) as a commission for its help in
recouping some Rp 904 billion in interbank loans on closed
institutions. The bank did not need another party's help because
the loans were guaranteed by the Indonesian Bank Restructuring
Agency (IBRA).

There are allegations that the inner circle of President B.J.
Habibie was involved in the scandal, with the payment reportedly
earmarked for political purposes ahead of the November
presidential election.

BPK has been roundly criticized by both the House and the
International Monetary Fund (IMF) for a lack of transparency in
conducting the investigation.

BPK demanded PwC divide its audit into short form and long
form reports. The agency has publicly disclosed the condensed
report, with the full report only provided to the police for
further investigation.

The 36-page summary, a copy of which was obtained by The
Jakarta Post, constitutes a limited report of PwC findings and
recommendations. It does not include the flow of funds from Bank
Bali to EGP, as well as from EGP to other bank accounts.

Yudono said that the full report could not be handed over to
the House and the International Review Committee as requested by
the IMF because of restrictions under the banking law and BPK's
regulations.

He added that disclosing information on bank accounts would
violate banking secrecy codes.

Yudono said the findings could only be made available to the
police, the attorney general and, in a tax fraud case, the tax
office under the law.

PwC said in the report that it "has uncovered numerous
indicators of fraud, noncompliance, irregularity,
misappropriation, undue preferential treatment, concealment,
bribery and corruption during the processing and payment of the
Bank Bali claims".

The alleged fraud was carried out by prominent individuals
including ministers, senior government officials, legislators,
political party officials and leading members of the business
community, it added.

BPK auditing team member Amrin Siregar said that the most
important conclusion was that the Rp 904 billion transfer from
the central bank to Bank Bali was illegal because IBRA deputy
chairmen Farid Harianto and Pande Lubis did not have the
authority to order the transaction.

He noted the transfer was made outside regular banking hours
at 7 p.m. on June 1.

"This is very suspicious," he said.

In a related development, National Police spokesman Brig. Gen.
Togar Sianipar said on Tuesday that dossiers of eight suspects
questioned in the police investigation were being prepared to be
handed over to the courts.

The police have named former members of Bank Bali management,
two EGP owners and IBRA senior official as suspects.

Meanwhile, former Bank Bali president Rudy Ramli sought
protection on Tuesday from the National Commission on Human
Rights because of his fears for his safety, the group's
secretary-general Clementio dos reis Amaral said.

Amaral said that Rudy appealed for the protection in a meeting
with the commission members.

Rudy acknowledged last week the existence of a journal which
purportedly describes the involvement of Habibie's inner circle
in the scandal. However, he did not confirm the contents

Rudy told journalists after meeting with the commission
members that he was often being subjected to terror.
(rei/ylt/emf/rms)