Political rumblings grow over Bank Bali scandal

Political rumblings grow over Bank Bali scandal

JAKARTA (JP): Political squabbling over laying the blame for
the high-profile Bank Bali scandal intensified on Thursday, with
the ruling Golkar Party declaring its innocence and a senior
economic minister denying any involvement.

Golkar deputy chairman Marzuki Darusman stressed the party was
not involved in the alleged multimillion dollar scandal.

"It was clearly established in our meeting that there has not
been any transfer of funds (from Bank Bali) to Golkar accounts,"
he said after a closed-door meeting with chairman of the
Indonesian Bank Restructuring Agency (IBRA) Glenn S. Yusuf.

He said Golkar would be "proactive" in assisting in the
investigation of the scandal and determining who was responsible.

Marzuki, who was accompanied by other Golkar officials
including treasurer Fadel Muhammad, has been at the vanguard in
efforts to improve Golkar's tattered image ahead of the
presidential election in November.

Two businessmen affiliated with the party, Joko Chandra and
Golkar deputy treasurer Setya Novanto, allegedly colluded with an
IBRA deputy chairman to pressure Bank Bali to provide about Rp
546 billion (US$70 million) in commissions to help the bank
recoup Rp 904 billion in interbank claims on closed banks.

Interbank claims on closed banks are supposed to be
automatically covered by IBRA through the government blanket
guarantee for bank deposits and claims. Bank Indonesia has
emphasized that an intermediary is not needed to recover the
claims.

Speculation has narrowed to the possibility that a sizable
chunk of the commission was funneled to the special team in
charge of securing the election of President B.J. Habibie in
November.

Banking law expert Pradjoto, who first revealed the scandal
early this month, alluded to the possible involvement of other
senior government officials.

IBRA confirmed the Rp 546 billion transfer of funds from Bank
Bali to PT Era Giat Prima (EGP), an investment firm controlled by
Joko and Setya, in early June.

"The transaction by Chandra and Novanto with Rudy Ramli (the
then president of Bank Bali) was not a normal business deal,"
Fadel said.

The three executives seem destined to be held responsible for
the scandal, with the National Police requesting the immigration
authorities impose a travel ban on them.

Minister of Justice/ State Secretary Muladi has previously
dismissed allegations of the involvement of State Minister of the
Empowerment of State Enterprises Tanri Abeng, head of the Supreme
Advisory Council A.A. Baramuli and Habibie.

Separately, Coordinating Minister for Economy, Finance and
Industry Ginandjar Kartasasmita denied allegations leveled
against him on Wednesday by chairman of the National Mandate
Party (PAN) Amien Rais.

The coordinating minister was attending the Consultative Group
on Indonesia meeting in Paris when the first media reports of the
scandal surfaced, a statement issued by Ginandjar's office said.

The statement was read by Parulian Sidabutar, Ginandjar's
secretary, at a news conference which was originally scheduled to
be led by the coordinating minister himself. He did not attend.

"We have to explain that the duty of a coordinating minister
is coordinating economic and finance ministers without lessening
the authority and the responsibility of the individual ministers
in their respective field," the statement added.

Ginandjar denied Amien's charges that he ordered Bank
Indonesia to settle the repayment of $900 million in trade
financing debt arrears owed by local private banks to foreign
banks.

"This can easily be cross-checked with the central bank."

Amien, who also chairs the advisory board of the Center for
Banking Crisis, urged Habibie on Wednesday to suspend Ginandjar,
finance minister Bambang Subianto and Glenn Yusuf because they
should be held responsible for the Bank Bali scandal and other
incidents of fraud in the banking sector.

Amien also demanded that the government guarantee on bank
deposits and the system of claims be abolished because it was
widely susceptible to abuse.

Marzuki warned that the real culprits in the scandal could
elude punishment if the focus shifted to demanding the
resignation of senior government officials.

"Attention must not be diverted from the nitty-gritty of the
Bank Bali case," Marzuki said. (rei)