New councillors eager for loans to repay debts

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.