House promises Bank Bali investigation

House promises Bank Bali investigation

JAKARTA (JP): The House of Representatives special
investigation committee said on Wednesday it would push ahead
with its own investigations to unravel the high-profile Bank Bali
scandal despite publication of the PricewaterhouseCoopers (PwC)
audit.

Head of House Commission IX for finance and banking Sukowalujo
Mintohardjo said on Wednesday the committee would ensure that the
case would be fully and satisfactorily resolved according to the
laws.

"What's important is that the committee's investigation must
end with legal action," Sukowalujo said.

The joint committee of House Commission IX and Commission II
for legal affairs will commence on Thursday comprehensive
investigations of the scandal. The committee expects to complete
the inquiry by the middle of December.

The committee was initially set up to study the PwC report in
order to determine whether to publish the document. But before
the committee began its work, House Speaker Akbar Tandjung
decided on Tuesday to publish the report following strong public
pressure and calls from international donors, particularly the
International Monetary Fund.

Several legislators said the committee would summon several
people mentioned in the PwC report, particularly those
recommended by the auditor for further investigation.

The attorney general and the police are also investigating the
scandal.

Visiting IMF Asia Pacific director Hubert Neiss said on
Wednesday that Indonesia must resolve the scandal satisfactorily,
meaning that proper legal action should be taken against
wrongdoers to restore confidence in the banking sector.

The previous administration of B.J. Habibie was reluctant to
delve into the scandal because several people from Habibie's
inner circle, including Golkar Party leaders, have been
implicated in the affair. Habibie's administration also ignored a
recommendation made by a special investigative committee of the
previous House.

The move led in mid-September to the suspension of crucial
international loans to Jakarta.

In a related development, Attorney General Marzuki Darusman
said on Wednesday the investigation into the scandal could be
completed by the end of the year.

Marzuki, who was speaking after receiving a copy of the PwC
audit on the bank scandal from Akbar, said "there will be no
conflict of interest" in the investigation.

Marzuki, a deputy chairman of Golkar, was rumored to be the
individual who pushed for disclosure of the scandal.

The scandal revolves around the transfer of a Rp 546 billion
(US$80 million on the June rate) commission from Bank Bali to
private firm PT Era Giat Prima (EGP) as payment for services
rendered in recouping some Rp 904 billion in interbank loans owed
by closed down banks.

Bank Bali should not have used the service of EGP because the
claims were guaranteed by the government through the Indonesian
Bank Restructuring Agency (IBRA), a department of the finance
ministry.

There have been allegations that part of the commission was to
be used for bankrolling Habibie's presidential bid.

Corruption

PwC said in its report: "There are numerous indicators of
fraud, noncompliance, ...and corruption during the processing
and payment of the Bank Bali claims. PwC recommends that an
additional investigation be conducted."

Public figures recommended for further investigations include
former head of the Supreme Advisory Council (DPA) Arnold A.
Baramuli, who was also Habibie's chief advisor, former state
minister of the empowerment of state enterprises Tanri Abeng,
former finance minister Bambang Subianto, Bank Indonesia Governor
Sjahril Sabirin, BI executive Erman Munzir, IBRA deputy chairman
Pande Lubis, Golkar executives Freddy Latumahina, Enggartiasto
Lukita, Marimutu Manimaren, and Didi F. Korompis.

PwC said there were indications which suggested Baramuli's
knowledge or involvement in the scandal.

PwC pointed out Baramuli's aggressive lobbying to the central
bank governor to have Bank Bali's claims paid, and his alleged
participation in a May 26, 1999 meeting at Hotel Mulia with
several people heavily implicated in the scandal.

"Our tracing of the funds has not established a receipt of
money by Baramuli out of the claim payment. The money trail,
however, reflects that in early June 1999, a fellow member of DPA
apparently did receive a payment," PwC said, referring to DPA
member Agus Sudono who received more than Rp 2 billion.

PwC added that Baramuli and Tanri refused to be interviewed.

PwC said that factors which implicated Tanri in the scandal
included his alleged participation at the Feb. 11 and May 26
meetings at Hotel Mulia, the transfers of about Rp 1.4 billion of
funds to companies owned by the Tanri family and Rp 30 billion to
a close associate of Tanri.

Regarding Bambang Subianto, the PwC report referred to his
meetings with former Bank Bali president Rudy Ramli and Manimaren
prior to the payment of the claims. The report also pointed out
his long association with IBRA's deputy chairman Pande Lubis, who
allegedly played a key role in the payment of Bank Bali's claims.

But the auditor also commended Bambang for his cooperation in
the interview process.

PwC also listed names of people and companies who received
funds, possibly from the commission, including EGP owner Joko
Chandra, Setya Novanto (Golkar legislator), Iwan Tjahjadikarta,
Bong No Li, OC Kaligis (a lawyer), Anna Boentaran (Joko's wife),
Gani Djemaat (a lawyer), Judith Dirkin, Irvan Gunardi and MS
Ralie Siregar. (rei/byg)