Vendetta against Sjahril

Vendetta against Sjahril

The series of sagas encountered by Bank Indonesia Governor
Sjahril Sabirin since February -- starting with his rejection of
the request by President Abdurrahman Wahid that he resign from
his post, his subsequent arrest on corruption charges in late
June and continuing with the ongoing political battle at the
House of Representatives for his ousting from the bank -- all
convey a clear message: If you cross the President, he will use
the power of the law against you. But if you remain on his good
side, even if you are suspected of corruption you can sit back
and relax, like several debtor tycoons who can supposedly get
around the law.

That is the strongest impression one gets after two weeks of
the government-House debate on the proposed amendments to the
1999 central bank law. The more reasons the government put forth
to the House to back up its proposed amendments, the more obvious
it became that Sjahril is the real target of what has been
trumpeted as a drive to clean up the central bank and make it
more accountable.

The focus of the proposed amendments is on provisions that
will make it much easier for the government to replace the
central bank's board of governors. One new provision initially
requested stipulates that a board member can be removed from
office if he or she cannot perform his or her duties for three
consecutive months. This provision supposedly applied to Sjahril,
who was still under house arrest at that time. But upon realizing
later that Sjahril would soon end his detention period and that
the law could not be made retroactive, the government tabled
another stipulation which states that once the amended law
becomes effective the incumbent board of governors shall disband.
Sjahril was released from house detention on Tuesday and resumed
his duties on Wednesday.

The government, especially Abdurrahman, is so obsessed with
ousting Sjahril that it sometimes appears stupid and commits
silly mistakes. The government even threaten to liquidate the
central bank for being responsible for the alleged misuse of
billions of dollars of emergency liquidity support to ailing
banks in 1997-1998. This threat prompted five members of the
board, including then acting governor Anwar Nasution, to resign
in mid-November, and the President promptly named three
candidates, including Anwar, for the governorship. Of course the
nominations were legally defect because Sjahril, though inactive
at that time, legally remains the governor.

Upon realization that it was impossible to topple Sjahril
without first amending the central bank law, a process that may
drag on until late January, the government tried another ploy by
claiming he might be involved in a banknote counterfeiting case.
Chief economics minister Rizal Ramli asserted on Thursday and
Attorney General Marzuki Darusman implied on Friday that Sjahril
could be implicated in and would be held responsible for the
counterfeiting case even though Sjahril's name has never been
mentioned in the hearings at the South Jakarta and Surabaya
courts which tried main defendants in the case. Would the
government be so desperate as to make another mindless mistake by
rearresting Sjahril as a suspect in this fake money case? Or is
just another case of character assassination targeted at Sjahril?

By describing all the inconsistencies, we do not mean to say
that the central bank has always been clean of corruption and
collusion, especially under former president Soeharto's
administration. Nor do we intend to proclaim that Sjahril was
entirely uninvolved in either the Bank Bali scandal or the
alleged misuse of the billions of dollars in emergency loans.
After all, Sjahril was governor of the central bank in February
1998 when banks were given the loans.

What we do know though is that Sjahril was part of the team in
1998 which decided to close two insolvent banks closely
associated with Abdurrahman, then chairman of the Nahdlatul Ulama
organization.

The basic issue here is why the government has not pursued the
matter through the due process of law. Please note that all
primary defendants in the Bank Bali case have been acquitted of
all charges by the court and that none of the bankers or former
bankers as well as officials implicated in the emergency loan
case has so far been brought to court.

If Abdurrahman is really serious about cleaning up the central
bank, why haven't the debates about the amendments to the central
bank law focused on the provisions of accountability and
performance standards? No matter how worthy the goal to prevent
the central bank from abusing its power is, the means matter just
as much as the end result.

Both the government and the House, in their debate on the
proposed amendments to the central bank law, should realize that
the drawn-out row about the central bank has begun to take its
toll on the market's confidence in Bank Indonesia's ability to
formulate and see through policy and in the efforts to strengthen
the distressed financial system.