Government faces mounting pressure to probe Bank Bali scam
Government faces mounting pressure to probe Bank Bali scam
JAKARTA (JP): The government is facing mounting pressure to
thoroughly investigate the alleged high profile Bank Bali scandal
amid signs of backing off.
Golkar deputy chairman Marzuki Darusman on Saturday warned the
government against trying to cover up whoever was involved in the
multimillion dollar affair.
"The public is already seeing attempts to cover up the
officials involved in the case," Marzuki told reporters on the
sidelines of a discussion on fighting corruption.
He explained that if the government failed to probe the Bank
Bali scandal in a credible way, public confidence in the
government and its policies would dwindle.
"We're very serious about fighting corruption whatever the
risks to Golkar," he said.
Marzuki is regarded as a reformist politician in Golkar who is
trying to distance the ruling party from past wrongdoings of the
Soeharto (New Order) administration.
Marzuki has been appointed head of Golkar's investigation team
for the Bank Bali affair, which allegedly involves several
leaders of the party.
The Indonesian Bank Restructuring Agency (IBRA) confirmed on
Friday earlier allegations made by banking law expert Pradjoto
that Bank Bali paid Rp 546 billion (US$78 million) to private
firm PT Era Giat Prima (EGP) for recouping Rp 904 billion in
interbank claims on closed downs banks.
IBRA chairman Glenn S. Yusuf said the repayment of interbank
claims on closed down banks need not use the services of any
third party such as EGP, because the claims were insured by the
agency through a government blanket guarantee program.
Reports say that Bank Bali used the services of EGP because
the bank owner lost patience with IBRA after waiting for months
for repayment.
EGP is a company owned by Setya Novanto, a vice treasurer of
the ruling Golkar party, raising speculation that part of the fee
was illegally used to finance the party's campaigning activities
or for vote-buying during June's general election.
Setya acknowledged his company dealt with Bank Bali, but
claimed that since EGP was a factoring company which buys out
distressed loans it was a pure business deal.
But IBRA said the cession deal between Bank Bali and EGP was
unusual as it did not involve upfront payment by EGP for Bank
Bali's interbank loans.
Separately, former Bank Bali's commissioners (supervisors)
J.B. Sumarlin and I.N. Suwandha, confirmed in a statement on
Sunday that the bank's management, without consultation with the
board of commissioners, signed on Jan. 11, 1999, a cession
agreement with EGP.
Under the agreement Bank Bali ceded to EGP its interbank
loans owed by several closed-down and taken-over banks and in
turn EGP pledged to give the bank within three months securities
whose value was equal to the amount of loans ceded.
The statement said the board of commissioners was notified on
the agreement only in early April.
But since EGP failed to hand over the securities to Bank Bali
within the allotted period, the board of commissioners
recommended to the bank's board of directors to cancel the
agreement, the statement added.
The bank's management nevertheless bowed to EGP's demand that
the cession agreement be extended until June 11.
"We therefore conclude that there were irregularities in the
agreement," added Sumarlin, a former minister, and Suwandha, who
sat in the bank's board of commissioners until it was taken over
by the central bank on July 23.
Pradjoto also claimed IBRA deputy chairman Pande Lubis and
several other high-ranking government officials close to
President B.J. Habibie were implicated in the scandal.
Marzuki demanded that government officials involved, including
any senior officials at IBRA, be made nonactive to allow a
thorough investigation into the matter.
"He (Pande) must be made nonactive as of Monday," he said.
In a related development, a senior official at the finance
ministry was quoted by newspapers on Sunday as saying that Pande
Lubis would be suspended on Monday.
Another IBRA deputy chairman, Arwin Rasyid, said the agency
was determined to investigate the matter thoroughly.
"This is a very controversial issue and IBRA is under a lot of
pressure," he said at a seminar last week.
Outsiders
Arwin also acknowledged that many outsiders, including well-
connected businessmen and politicians, were trying to take
advantage of IBRA's huge assets.
IBRA, an agency under the Ministry of Finance, was established
last year to help the government in restructuring the country's
ailing banking sector. The agency has become the country's most
powerful and largest economic entity, controlling over Rp 600
trillion in assets.
Economist Sri Mulyani said the Bank Bali affair had become an
acid test to IBRA's credibility.
She said IBRA was supposed to be an agency free of corruption
and rent-seeking activities because its responsibility was to
help rebuild confidence in the country's shaky banking sector.
"The government must have a strong political will to
completely investigate the case," she said.
The Indonesian Democratic Party of Struggle (PDI Perjuangan)
also vowed on Friday to set up an investigation team to probe
into the Bank Bali matter.
PDI Perjuangan senior official Kwik Kian Gie said the matter
must be thoroughly investigated because the revelation made by
Pradjoto was factual and that the authenticity of the data was
beyond reasonable doubt. (rei)