Legislators seeking blood over Rp 144t fraud at BI

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.