House leaders decide not to summon Habibie

JAKARTA (JP): Leaders of the House of Representatives fanned the fire of controversy in the Bank Bali scandal on Thursday by deciding not to exercise their constitutional right to summon President B.J. Habibie.

They opted instead to draw on the right of "investigation" into the scandal, which has been dubbed "Baligate" due to its mix of political intrigue and shady dealings.

"We recommend that the House use its investigation right to resolve the Bank Bali case," House deputy speaker Hari Sabarno said following a closed-door meeting.

He said the decision was expected to be approved on Monday at a plenary session and to be followed immediately by the formation of a 23-member investigation team.

The sitting House has until the end of this month to conduct the investigation before its term expires. Legislators have not exercised the right of investigation for more than 40 years, leaving it unclear how they plan to proceed.

Several outspoken members of House Commission VIII on banking and the state budget earlier urged the legislative body to use its right to summon and question the President, but other members of the commission opted for the investigation measure.

The first group of legislators reasoned that Habibie should be held responsible for the country's banking policy and said he should be asked to explain the alleged involvement of members of his inner circle.

Hari argued that the option to question Habibie was contained in the investigation measure, albeit indirectly, but it would be unwarranted because the scandal did not result from his actions.

"The President can't directly be summoned for questioning because such a summons could only be done in relation to policies he made," Hari added.

"This case isn't (a result of Habibie's policy). So summoning the finance minister is already appropriate."

Legislator Ichsanuddin Noorsy lambasted House leaders for waiving the right to summon and question Habibie.

He believed it was another evidence of a political conspiracy to hatch a compromise before all details of the case could be revealed.

House leaders have also been faulted for announcing on Monday a one-week postponement of the scheduled Sept. 2 hearing with the banking authorities about results of independent audits into the scandal.

Ichsannudin believed the delay was an attempt by Habibie's camp to buy more time and cover up the involvement of high- ranking politicians and officials.

The scandal centers on Bank Bali's transfer of a Rp 546 billion commission to PT Era Giat Prima (EGP) for its assistance in recouping loans to closed banks.

The Indonesian Bank Restructuring Agency (IBRA) has faulted the bank for using the services of EGP because the repayment of the loans was covered under the government's blanket guarantee program.

Bank Indonesia also pronounced the transaction a criminal act because the bank did not enter it in its records or report it to the banking authorities.

Although the money has been returned, there has been increasing pressure for Habibie to divulge all details of what occurred.

Several ministers and close aides of Habibie were allegedly involved in the scandal, amid rumors that the commission was engineered to raise funds for his bid to retain the presidency. One of the EGP executives, Setya Novanto, is also a top Golkar official.

The government and the central bank have completed the financial and legal audit on the Bank Bali case, while the Supreme Audit Agency (BPK) has until Sept. 7 to finish its audit, which is being conducted with the assistance of international auditor PricewaterhouseCoopers.

In a related development on Thursday, State Minister of National Development Planning/Chairman of the National Development Planning Board (Bappenas) Boediono acknowledged the scandal was derailing efforts to put the country's ravaged economy back on track.

"The Bank Bali case has disrupted efforts to effect economic recovery," he told House Commission VIII during a hearing.

He said an immediate and thorough investigation was crucial to restore investor confidence in the economic recovery program.

He noted the threats by the World Bank and the International Monetary Fund to suspend financial support if the case was not resolved satisfactorily.

Boediono said a temporary suspension of aid lasting from one month to two months would not jeopardize the state budget, but lengthier periods would cause development projects to be shelved. (rei)