BPK says new govt can reopen banking scandals
Zakki P. Hakim, Jakarta
The Supreme Audit Agency (BPK) is conducting an audit into a government policy that allows former bank owners to escape prosecution over misused liquidity aid, in a move that may pave the way for the next government to reopen the mass corruption case.
BPK chief Satrio "Billy" Joedono told the press on Friday that results of the audit, expected to be completed before the next government takes office in October, might contradict official policy of the now-defunct Indonesian Bank Restructuring Agency (IBRA).
"If so, it is up to the government whether or not to follow up on our findings," he said.
Billy was commenting in response to Thursday's announcement by the Attorney General's Office that it had halted its investigation into Sjamsul Nursalim, a corruption suspect.
The former owner of Bank Dagang Nasional Indonesia was issued debt-free status, with IBRA confirming that he had fully repaid his firms' Rp 10.1 trillion (about US$1.12 billion) BLBI debt.
IBRA has so far issued debt-free status to 14 former bank owners (not eight, as reported on Friday).
IBRA was set up by the government during the late-1990s economic crisis to help restructure the banking industry, including facilitating the disbursement of Rp 144.5 trillion in Bank Indonesia liquidity support (BLBI) funds for ailing banks.
However, many bank owners abused the government loan by channeling them for an alternative use, including speculation, causing massive losses in defaulted loans. The bankers also violated banking regulations by channeling most of the banks money to affiliated businesses.
After years of fruitless efforts to reclaim the funds, the government proposed not to pursue criminal charges against the ex-bankers, if they repaid their debts in either cash, assets or a combination of the two.
In 2002, the government issued Presidential Decree No. 8 to implement the policy, which has raised much controversy and strong criticism among the public.
However, several experts have said the assets surrendered as debt repayment had a much lower market value than that claimed by ex-bankers -- leaving taxpayers to cover the difference.
The BPK audit will determine whether the surrendered assets had been sufficient to cover the debts of the ex-bankers, many of whom are well-connected businessmen of the Soeharto regime.
Billy said the BPK would announce its conclusions on whether Sjamsul and others had earned the debt-free status after the audit was complete.
"The Attorney General's Office can reopen a case whenever new evidence comes to light," said Teten Masduki of the Indonesian Corruption Watch.
He said that findings from the BPK audit could be useful in pressuring the next government to reopen the corruption case of "bad bankers".
Teten added that if the government refused to do so, the matter could be taken to the Corruption Eradication Commission.