New councillors eager for loans to repay debts

Yuli Tri Suwarni, The Jakarta Post, Bandung

After serving only two weeks in office, the 100 new members of the West Java legislature have started using their appointment letters as collateral for bank loans.

They claim the loans are partly to repay debts used to finance their campaign activities for legislative seats ahead of the April 5 elections.

Letters of appointment can be used to secure a loan based on future earnings.

State West Java (Jabar) Bank spokesperson Fini Rezeki said at least 30 councillors had borrowed the maximum amount of Rp 50 million (US$5,500) per person.

"They have to put up additional collateral if they want to borrow more than Rp 50 million," he told The Jakarta Post in Bandung, West Java, on Thursday.

Fini declined to mention the amounts borrowed by the new legislators, but said it was appropriate for them to get loans because their salaries would be disbursed through Jabar Bank.

"Installments will be directly deducted from their monthly salaries," Fini explained.

A councillor, who declined to be named, admitted to applying for credit and said his application had been approved.

"After being sworn in as councillors, we need much money. Becoming a council member takes a long process. We had to borrow money to supply T-shirts and banners for campaigning, which was very expensive," he said.

Apart from that, legislators were reportedly charged millions of rupiah by their respective parties in order to be named legislative candidates.

The move to use letters of appointment as collateral to secure loans was rumored to have been initiated this year by provisional West Java council speaker Kudrat Iswara of the Golkar Party. However, he could not be reached for confirmation on Friday.

Council members for the 1999-2004 term in the province also did the same. A former legislator from the Justice and Prosperous Party (PKS), Yudi Widiana Adia, said previous councillors generally applied for loans two or three years after having been inaugurated.

Yudi, who is also West Java PKS secretary, said several of his party's 14 current councillors had also been tempted to apply for loans.

"But the party has prohibited them (from taking out bank loans). They haven't performed yet. I think it would be unethical to simply use their facilities for their own interests," he argued.

Council spokesman Eddie S. Holil said all matters related to processing the loans, including submitting appointment letters as collateral, was the personal concern of each legislator.

As a profit-oriented company, Jabar Bank has the right to accumulate funds and provide loans for profit, he commented.

Eddie said that 75 percent of the bank's customers were legislative council employees and civil servants from 25 mayoralties and regencies in West Java.

Civil servants can use either their civil servant membership cards, their first and last appointment letters, state Civil Servants' Savings and Insurance Company (Taspen) cards or their identity cards as collateral.