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.