Disclose or suffer

Indonesia's Supreme Court Justices, who are considering a legal opinion on whether the full results of an independent audit of the transactions relating to the Bank Bali scandal should be disclosed, must take into account the devastating impact the scandal has had on the country's economic reform program when they make the decision.

The scandal, which involves the transfer of Rp 546 billion (about US$80 million on the June rate) from Bank Bali to PT Era Giat Prima (EGP), a company controlled by officials of President B.J. Habibie's Golkar Party, hit at the heart of the reform program -- bank restructuring. The case also impinged the integrity of the Indonesian Bank Restructuring Agency, which currently manages Rp 600 trillion ($75 billion) in state assets.

The scandal prompted the International Monetary Fund, the World Bank, the Asian Development Bank and most other government creditors to suspend further aid disbursements to the country, because, as they stated, they no longer trusted the government. At a time when the state budget relies on foreign aid for almost 35 percent of its total revenue, the suspension of aid amounting to $2.7 billion to the end of this year or $4 billion to March is terrifying.

No less damaging is the loss of foreign investor confidence in the country because the Habibie administration, instead of transparently and quickly resolving the high-profile, politically charged case, resorted to all the tricks at its disposal to cover up the affair which allegedly involved Habibie's close aides and Golkar executives. Habibie and Satrio Billy Joedono, Chairman of the Supreme Audit Agency, invoked numerous legal pretexts to bar the public disclosure of the PricewaterhouseCoopers (PwC) audit, despite the protestations of the IMF, the World Bank, the previous House of Representatives and most legal consultants.

Habibie, speaking at a media conference on Friday evening, even resorted to shooting the messenger, in this case PwC, which discovered numerous indicators of corruption, fraud, noncompliance, irregularities, undue preferential treatment, concealment, bribery and misappropriation in the payments from Bank Bali to EGP.

The President accused PwC of having exceeded its authority, asserting that the company should have limited its work to auditing the books, and not interrogating people linked to the scandal. He quoted the National Police, which is now handling the case, as complaining that PwC appeared to have usurped police authority. But this point of argument appears hollow.

Nothing in the terms of reference in the agreement between PwC and the Supreme Audit Agency, which hired the auditor, indicated that the audit was simply meant to be a general audit. The assignment was clearly defined as an investigative audit; therefore the scope of the audit was not limited to checking the financial records of the involved parties.

The terms of reference in the agreement with PwC were quite broad, including: Reviewing the government guarantee scheme for bank deposits and claims and the procedures for claim payments; investigating whether the cession agreement between Bank Bali and EGP influenced the payment of the bank's claim; tracing the flow of payments made by EGP and the flow of return payments; reviewing whether there were other transactions similar to the Bank Bali cession agreement.

According to these terms of reference, interviews were required and the process of tracing funds from the Bank Bali payment necessitated checks on a number of bank accounts. But when the investigative audit discovered about 150 transactions involving the transfer of large sums of money from EGP executives to senior government officials and companies affiliated with Golkar leaders immediately after the Bank Bali payment to EGP, the government cried foul. PwC was accused of exceeding its authority. What all the arguments and charges boil down to is none other than a deliberately orchestrated cover-up of high- level corruption, which, by the way, is one of the underlying causes of our current economic crisis.

If the Supreme Court justices are serious about enhancing law enforcement, maintaining the commitment to combat corruption and other abuses of power and helping regain domestic and international investor confidence in our economy, they should vote in favor of the full public disclosure of the PwC audit report. Any other decision would only worsen the country's economic crisis, triggering social and political stability at the risk of national disintegration.