Legislators seeking blood over Rp 144t fraud at BI

Adianto P.Simamora, The Jakarta Post, Jakarta

Legislators said on Thursday that the government's plan to appoint a foreign consultant to audit for accounting purposes past emergency loans extended by Bank Indonesia was pointless.

They said the government should instead use previous audit results to uncover corruption in the so-called BLBI loans scandal and put the people responsible behind bars.

"The new plan is pointless. It's only a waste of money," said legislator Zulfan Lindan of the Indonesian Democratic Party of Struggle (PDI Perjuangan).

"The most urgent task now is to follow up on the recent audit by the Supreme Audit Agency (BPK)," he said, adding that the House of Representatives' Commission IX on budgetary affairs and finance would question the government and the central bank about the new plan at next week's scheduled hearing.

In a related development, Bank Indonesia Governor Sjahril Sabirin and Supreme Advisory Council (DPA) Chairman Achmad Tirtosudiro said on Thursday that the government, the central bank and the House should strive for a "consensus" to settle the BLBI case, which had been dragging on for almost two years.

The two were speaking to reporters following a meeting at DPA headquarters. The DPA gives advice to the President on various matters of state.

Sjahril was quoted by Detik.com as saying that the resolution of the BLBI case should be focussed on efforts to recover as much as possible of the funds by asking the Indonesian Bank Restructuring Agency (IBRA) to work "professionally."

He was also optimistic that both Coordinating Minister for the Economy Dorodjatun Kuntjoro-Jakti and Minister of Finance Boediono would agree on a consensus.

This statement seems to indicate that the corruption case will be swept under the carpet after all, with analysts saying that this should come as no surprise given the powerful vested interests involved.

Boediono had dashed on Wednesday earlier hopes that the plan to appoint an independent auditor constituted a new probe that would lead to a criminal investigation of what might be the country's largest corruption case ever.

Boediono said that the new audit was only meant to calculate the burdens the government and the central bank each had to bear.

The BLBI scandal centered on the channeling of some Rp 144.5 trillion (around US$14 billion) in emergency loans by Bank Indonesia to 48 commercial banks during the peak of the 1997 regional financial crisis.

But an investigative audit conducted by the Supreme Audit Agency (BPK), with the help of international auditor KPMG, revealed that some Rp 138.4 trillion of the funds had been misused, particularly by banks owned by powerful businessmen close to former authoritarian president Soeharto.

While the loan facilities were only meant to help those banks facing massive runs, some of the money was instead used by the banks to speculate on the volatile rupiah, purchase assets and for lending to affiliated businesses.

The implicated bank owners have surrendered assets to IBRA to repay the loans.

However, none of them have been put behind bars for alleged crimes involving the top government and Bank Indonesia officials concerned with the design of the policy and the channeling of the funds.

Meanwhile, legislator Paskah Suzetta said that there was no need for the government to appoint a new auditor to decide on the burden sharing between the government and Bank Indonesia, pointing out that last year the government and Bank Indonesia had reached an agreement under which the latter would only cover Rp 24.5 trillion of the loans, with the remainder being covered by the government.

"So, there's no need for a new audit aimed at deciding on the burden sharing," he said.

Paskah urged the government to have the political will to launch a crimal investigation against those top bureaucrats and central bank officials who were involved in the loan fraud.

An earlier audit made by a House special working committee had listed several names that needed to be questioned in relation to the loan abuse.

Another curious fact is that the government said the planned new audit was included in the fourth government letter of intent (LoI) agreed with the visiting International Monetary Fund mission earlier this week.

But the third LoI had already said that the government and Bank Indonesia must work closely with the House to expedite a final resolution to the BLBI case before the end of this year.