House leaders decide not to summon Habibie

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)