House launches investigation into bank scandal

House launches investigation into bank scandal

JAKARTA (JP): The House of Representatives launched on Monday
a special investigation into the high-profile Bank Bali scandal.

The investigation team is expected to have special power to
check bank accounts of suspects in the scandal.

House deputy chairman Hari Sabarno said that all of the five
House factions approved the establishment of a 23-member special
investigation team.

"All factions agree to exercise the investigation rights," he
told reporters after a plenary session.

According to the constitution, the House has the right to
conduct its own investigations of high-profile cases.

Hari said the team was expected to complete its investigation
before the term of the current House expires on September 24.

The special investigation team is chaired by legislator Lili
Asdjudiredja, who will be assisted by five deputies each
representing the five House factions.

The Bank Bali scandal revolves around the controversial
transfer of some US$80 million to PT Era Giat Prima (EGP) to help
the bank recoup its interbank loans on closed-down banks.

The banking authorities have said that Bank Bali should not
have used the services of EGP, a private company linked to
President B.J. Habibie's loyalists, because the interbank loans
are guaranteed through the government's blanket guarantee
program.

Although the money has been returned, Habibie is facing
pressure to take legal action against all of the people involved
in the scandal, including influential figures.

There have been allegations that several ministers and other
close aides of Habibie are involved in the scandal.

Legislator Ichsanuddin Noorsy, a member of the team, said that
the investigation would include a probe into the possible
involvement of high-ranking government officials.

He said the investigation team would check the bank accounts
of people allegedly involved in the scandal.

"This should not be seen as a violation of bank rules because
the constitution endows the House with the right to conduct its
own investigations. We're investigating this case in the name of
the people," he told reporters on the sidelines of the first
meeting of the special team.

"I promise you that we'll get to the bottom of this," he
added.

Ichsanuddin also said that he would suggest that the team
summon Habibie for questioning, another constitutional right
earlier relinquished by House leaders.

"There's no reason for the team not to summon Habibie," he
said, pointing out that based on House decision No. X, Article
2d, Habibie could be summoned if the government bank
restructuring program had inflicted serious losses on the state.

He said that the impact of the Bank Bali scandal was
detrimental to the state in the form of plunging confidence and
bank recapitalization costs.

Ichsanuddin said that the result of the investigation
conducted by the House would be compared with the result of
investigations conducted both by the government and independent
auditor PricewaterhouseCoopers.

Ichsanuddin said that the Bank Bali scandal has become a major
obstacle for Habibie's campaign for the November presidential
election.

Habibie is also facing serious trouble over the separation of
East Timor. The are growing calls for Habibie to resign because
of fears that an independent East Timor could trigger the
disintegration of other provinces. Habibie offered a referendum
for East Timor last year without prior consultation with the
military nor the country's highest legislative body.

Ichsanuddin also said that he would reveal evidence of bribes
received by legislators in connection with the Bank Bali scandal.

"I will submit the data to the investigation team," he said.

Ichsanuddin was quoted by Kompas on Monday as saying that
several legislators had been given Rp 50 million each to keep
silent over the Bank Bali scandal.

Ichsanuddin was forced to clarify the report during the first
working meeting of the investigation team on Monday.

"No members of this team are included on my list," he said,
but added that he had yet to receive clarification from
legislator Ekky Syahruddin.

Ekky admitted to receiving US$1,000 from the State Minister of
the Empowerment of State Enterprises Tanri Abeng, but explained
that it was in June 1998, and was a fee for the consultancy
service provided by his firm PT Pan Asia System for the
privatization process of state firms.

The House's special investigation team is scheduled to summon
former Bank Bali president Rudy Ramli on Thursday. (rei)