The House's last act

The House's last act

Only one day after making the appalling decision to approve
the controversial state security bill, the outgoing House of
Representatives commendably recommended the government take legal
action against all senior officials and businesspeople implicated
in the Bank Bali scandal. The recommendations, made on the basis
of the findings of a special House investigative team, called on
the government to legally resolve the scandal within one month or
risk facing the wrath of the people.

If implemented, the recommendations would help unravel the
fraud, noncompliance, irregularities, misappropriations, undue
preferential treatment, concealment, bribery and corruption which
independent auditor PriceWaterhouseCoopers (PwC) claimed to have
uncovered in its audit of the transactions related to the
scandal.

Though most likely to fall on deaf ears, the House's
suggestions will at least help sustain the wave of public
pressure for a thorough and transparent resolution of what is now
known as Baligate. The House's action also served to tell the
world that the Indonesian nation by no means condones corruption.

In the face of the virtual inertia on the part of the National
Police and the Attorney General's Office in handling the
multimillion dollar case, public pressure, including from
international creditors such as the International Monetary Fund
and the World Bank, appear to be the only means available now to
force law enforcement agencies to thoroughly, properly and
transparently handle the case.

The inertia contrasts with the firm and quick manners in which
the police always deal with government critics. The police did
not waste any time in announcing on Friday that former minister
of mines and energy Soebroto was suspected of masterminding the
student protests simply on account of a meeting he reportedly
attended on Thursday at the Sahid Jaya Hotel.

Look at how the National Police have attempted to reduce the
scope of the scandal to banking crimes, while the audit by PwC
revealed high-level collusion to pillage state coffers which
mandates the imposition of the anti-corruption law. No wonder
none of the senior officials implicated in the scandal are
included among the 10 suspects whose dossiers have been sent to
the Jakarta Prosecutor's Office.

Also note how the Supreme Audit Agency, whose chairman Satrio
Billy B. Judono happens to be an associate of President B.J.
Habibie, unashamedly resorted to the old trick of invoking the
banking secrecy law to deny the House, Bank Indonesia and the
Ministry of Finance access to the full report of the Pwc audit on
the Baligate.

No less flabbergasting was the conclusion by the National
Police, the only institution besides the Supreme Audit Agency and
the attorney general that obtained the full audit results, that
the 400-page PwC report prepared by an international team of 20
multidisciplinary experts was illogical.

Habibie should have realized that however the scandal would be
handled, the whole process would lack credibility if he
steadfastly refused to allow the public disclosure of the audit
report. The public, both here and abroad, clearly place more
trust in PwC than Habibie, who has failed to win confidence in
his ability to handle high-level cases of corruption.

Denying the House, the finance ministry and Bank Indonesia
access to the report also wastes the opportunity to draw lessons
from the scandal. The audit report contains analyses, conclusions
and recommendations on ways to prevent similar recurrences, which
would have proved enlightening to these institutions. PwC warned
the government that its audit found the government guarantee on
bank deposits and claims and the Indonesian Bank Restructuring
Agency, which at present controls almost Rp 600 trillion in
assets from closed and taken-over banks, were highly prone to
fraud.

Following the House's recommendations, allowing the public
disclosure of the PricewaterhouseCoopers audit report and
prosecuting all those implicated in the scandal are prerequisites
to placing the economy on the path to sustainable recovery.

Anything short of taking these actions will make the entire
government, including Bank Indonesia, a suspect in a high-level
cover-up, destroying whatever little trust the international
community, most notably creditors, still has in it.