Fri, 24 Sep 1999

Seven senior government officials involved in bank scandal: House

JAKARTA (JP): The House of Representatives concluded on Thursday that seven senior government officials were directly or indirectly involved in the Bank Bali scandal.

Head of the House special investigation team Lili Asdjudiredja said the team recommended that President B.J. Habibie take administrative sanction, including the dismissal of any officials involved.

"We recommend Habibie take administrative sanctions against the officials," he told reporters outside a closed-door meeting.

"We also recommend the police and the attorney general follow up on our findings," he added.

Lili declined to name the officials, pointing out that the findings would be disclosed on Friday at a House plenary session.

"This is our political decision," Paskah Suzetta, a member of the team, said.

The police have named Pande Lubis and Farid Harianto, deputy chairmen of the Indonesian Bank Restructuring Agency (IBRA), and Desmi Demas, the head of Bank Indonesia accounting and payment department, among 10 suspects in the Bank Bali scandal. The seven other suspects are former senior management staffers of Bank Bali and two prominent businessmen.

The police handed over the dossiers of the 10 suspects to the Jakarta Prosecutor's Office on Thursday.

The special investigation team has also summoned for questioning Supreme Advisory Council (DPA) chief Arnold A. Baramuli, State Minister of the Empowerment of State Enterprises Tanri Abeng, Minister of Finance Bambang Subianto, IBRA chairman Glenn S. Yusuf and Bank Indonesia Governor Sjahril Sabirin.

Meanwhile, legislator Herman Widiananda, also a member of the investigation team, warned of efforts by House leaders to cover up for those involved.

He said the investigation team would issue a 57-page document.

"The full document must be disclosed tomorrow (Friday) because we're ending our term," he said, fearing that the House would only disclose the summary of the report.

The current House members end their term on Friday. New members will take up their posts on Oct. 1.

Concerns of efforts to cover up the scandal has been high in the minds of the public and international donor institutions.

There has been allegations that the bank scandal involves the inner circle of President B.J. Habibie trying to raise money to bankroll Habibie's election in November.

The Bank Bali scandal stems from the transfer of Rp 546 billion (about US$80 million at the June rate) from the bank to politically well-connected PT Era Giat Prima in June as a commission for helping the bank recoup some Rp 904 billion in interbank loans.

It was unnecessary for the bank to use the services of EGP because the loans were covered by the government guarantee on bank deposits and claims.

Meanwhile, Bank Indonesia deputy governor Miranda Goeltom said on Thursday that a satisfactory resolution of the Bank Bali scandal was crucial to help strengthen the exchange rate of the rupiah.

"No cover ups ... and it must be resolved in a credible way," she told reporters on the sidelines of a seminar.

The rupiah tumbled to Rp 8,750 to the U.S. dollar on Thursday from Rp 8,370 on Wednesday amid increasing political uncertainty in the wake of the Bank Bali scandal, violence in East Timor and a violent student demonstration protesting the House's approval of the state security bill.

In a related development, IBRA deputy chairman Arwin Rasyid said on Thursday that the agency had appointed Ernst and Young consulting firm to audit some Rp 15 trillion in outstanding interbank claims of 10 banks on closed down banks.

The audit will help the agency decide whether the claims are eligible for the government blanket guarantee program, he said. (rei/udi)