Ex-central bank director tried for Rp 18t corruption

Ex-central bank director tried for Rp 18t corruption

Muninggar Sri Saraswati, The Jakarta Post, Jakarta

A former director of Bank Indonesia stood trial on Monday at
the Central Jakarta District Court for allegedly abusing his
authority by manipulating the central bank's liquidity support
(BLBI) funds causing the state to suffer Rp 18.164 trillion
(about US$180 million) in losses.

Paul Soetopo Tjokronegoro, 61, along with several other former
Bank Indonesia directors, was accused of amassing wealth for
himself and other parties during his term in 1997.

"The defendant had disbursed state funds to private banks that
were not eligible to receive them," prosecutor Heru Chaeruddin
told the court, presided over by Judge Rusydi As'ad.

The defendant, who looked calm during the hearing, is charged
under Anticorruption Law No. 3/1971, which carries a maximum
penalty of life imprisonment.

The defendant, along with other BI directors, was responsible
for disbursing over Rp 18.164 trillion in state funds to 45
private banks.

According to central bank regulations, the private banks were
not eligible to obtain the funds because the banks' accounts in
the central bank were in deficit.

"The defendant should have imposed sanctions on the private
banks but he did not," Heru said.

On Aug. 15, 1997, the defendant and other former BI directors,
including Hendrobudiyanto, Heru Soepraptomo, Boediono, Haryono,
and Mukhlis Rasyid, and central bank Governor J. Soedradjat
Djiwandono decided that the central bank would disburse the state
funds to banks that were facing liquidity problems during the
monetary crisis.

Hendrobudiyanto is scheduled to be tried on Jan. 21, while
Heru Soepraptomo will appear on Wednesday for the same case in
the same court.

Paul, Hendrobudiyanto and Heru Soepraptomo lead a unit of the
central bank to supervise 76 private banks that were having
financial problems.

But they failed to stipulate clearly the requirements to
obtain the funds that were later disbursed without proper
procedures.

The court will resume on Jan. 23 to hear the response from
Paul and his lawyers.

Paul is the first former government official to face trial
linked to the manipulation of BLBI funds. He was detained from
June 21, 2000 to Oct. 2, 2000, and was put under house arrest
until Oct. 18 last year.

He is not currently under detention.

The former deputy director of Bank Aspac, Hendrawan Haryono,
was acquitted from corruption charges in the first BLBI case in
June last year. Instead, he was sentenced to one year in prison
and was ordered to pay a Rp 500 million fine for violating
banking laws.

Currently, several bankers are being tried for allegedly
misusing the BLBI funds. Among them are Leonard Tanubrata, a
former president of Bank Umum Nasional; Kaharuddin Ongko, a
former deputy commissioner of the bank; Samadikun Hartono a
former president of PT Bank Modern; and former officials Bank BHS
Hendra Rahardja, Eko Edi Putranto and Sherny Konjongian.

Hendra, Eko and Sherny are tried in absentia as they are still
at large.