April 3, 2008

Govt's BLBI excuse no good: MPs

By Lilian Budianto

Lawmakers have voiced dissatisfaction with the government's formal explanation about its failure to resolve the Bank Indonesia liquidity support (BLBI) funds embezzlement.

The lawmakers said Wednesday they would submit their official response with the House of Representatives leadership on Thursday to determine their next actions against the government over the huge graft scandal.

Legislator Dradjad Wibowo of the National Mandate Party (PAN) said the government had been cooperative in publishing the list of bad debtors and the status of several dubious accounts related to the BLBI funds.

But it failed to convince lawmakers about its follow-up actions against the fraudulent debtors, he said.

He said the government's ban on bad debtors from traveling abroad was nonsense because most of them had long since fled Indonesia.

"If the government were serious about handling the case, it would have caught the bad debtors, instead of imposing useless travel bans," Dradjad told a news conference at the House.

The government's response to the House's second query into its efforts to resolve the BLBI scandal was read out by Finance Minister Sri Mulyani at a House plenary session Tuesday.

In addition to the travel bans, the government said it would seize and auction off the debtors' assets this year and threatened to detain those failing to cooperate.

The Finance Ministry has also been authorized to pursue civil lawsuits against the owners of 12 closed banks to recover some of the total Rp 650 trillion (US$69.8 billion) in state assets lost under the BLBI program.

Police and prosecutors lacked sufficient evidence to bring criminal charges against 12 of the 16 banks accused of swindling BLBI loans.

Ade Daud Nasution of the Star Reform Party criticized the government's plan to proceed with the civil cases, saying it had deliberately ignored facts that could make the bad debtors face criminal charges.

Other legislators who will submit their official response include Abdullah Azwar Anas of the National Awakening Party (PKB), Yuddy Chrisnandi and Joeslin Nasution, both from Golkar Party, and two lawmakers from the Crescent Star Party (PBB), Nizar Dahlan and Ali Mochtar Ngabalin.

Under the House's standing orders, a move to bring a motion for discussion at a plenary session must get support from at least 13 legislators.

The plenary session will later decide whether to accept or reject their motion. If a motion is accepted, the House's factions are required to state their further actions against the government.

Dradjad said one option for each faction was to set a deadline for the government to prove it managed to settle the BLBI criminal and civil cases.

Ade Daud said the House could resort to impeachment if the government failed to meet the deadline.

Last month, at least 55 legislators submitted a proposal to the House for an inquiry into the government over the BLBI scandal.

Dradjad said the House was scheduled to hear the inquiry petition after it ended its recess period in May.

The House will begin a one-month recess on April 11.(The Jakarta Post)

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March 25, 2008

AGO, police and KPK to review major graft cases

Abdul Khalik ,  The Jakarta Post ,  Jakarta

The government said Monday it would review major corruption cases connected to the swindled Bank Indonesia liquidity support (BLBI) funds before deciding whether to reopen them.

If the government decides to reopen the cases, it is also expected to decide whether to hand the BLBI investigations over to the Corruption Eradication Commission (KPK) from the Attorney General's Office (AGO).

Attorney General Hendarman Supandji said his office, the KPK and police on Thursday would discuss all the corruption cases they were handling, including the embezzlement of trillions of rupiah in BLBI funds.

"It depends on the review whether we will reopen the BLBI cases or not," he said at a hearing with the House of Representatives' Commission I on defense, security and foreign affairs.

Coordinating Minister for Political, Legal and Security Affairs Widodo Adi Sucipto, Foreign Minister Hassan Wirayuda, Fisheries and Maritime Affairs Minister Freddy Numberi and Indonesian Military chief Gen. Djoko Santoso were also present at the hearing.

During the 1997-1999 East Asian economic crisis, the government dispensed Rp 640.9 trillion to save the banking system from collapse.

The money included some Rp 144.5 trillion in BLBI funds, which was disbursed to 48 banks to keep them afloat in the wake of a massive withdrawal of foreign capital from the country. However, many debtors abused the liquidity support and embezzled the funds.

The government must pay some Rp 60 trillion each year as interest on the funds, which were covered by foreign and domestic borrowing.

The AGO has been under pressure to reopen the BLBI cases after the KPK arrested state prosecutor Urip Tri Gunawan, who led the probe into the alleged BLBI embezzlement by tycoon Sjamsul Nursalim, on charges of receiving a US$660,000 bribe from Artalita Suryani, a businesswoman close to Sjamsul.

The arrest occurred just two days after the AGO announced on Feb. 29 it had dropped the investigation into Sjamsul, citing lack of evidence.

The AGO then dismissed deputy attorney general for special crimes Kemas Yahya Rahman and director for investigations Muhammad Salim, both direct supervisors of Urip, in an effort to maintain the office's credibility.

"During our internal investigation, we did not find any link between the (Sjamsul) case and the arrest of Urip. But it is the KPK's investigation to establish a possible connection," Hendarman told the House hearing.

He said Urip is currently charged with four crimes, including bribery and extortion.

Several lawmakers suggested it was unlikely Urip was involved in accepting bribes without the knowledge of his superiors.

"Please don't stay on Urip as it is impossible he was acting alone," legislator Permadi told officials in attendance.

"By focusing the case only on Urip," he said, "we have tried to fool the public. We can't do it anymore because people are smarter now."

Another lawmaker, Sidarto Danubroto, urged law enforcers to continue investigating the BLBI cases.

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February 19, 2008

False Pretenses?

After interpolation, several legislators are preparing three weapons to snare President Yudhoyono in the BLBI case. It may just be a bluff.

CARRYING a file, Alvin Lie approached the table of the session chairman. To Muhaimin Iskandar, who presided at the meeting, the National Mandate Party (PAN) politician said: “It was not the President’s reply but the Minister’s.” Then he just walked off.

Alvin’s move was followed by around 20 other members of the House of Representatives (DPR). They went forward together to deliver the documents. Some members yelled: “Yudhoyono’s washing his hands!” Others loudly remarked: “Yudhoyono isn’t quite a man!”

Consequently, the plenary session with a hearing of the government’s reply to the interpolation over Bank Indonesia Liquidity Assistance (BLBI) funds on the agenda on Tuesday last week turned into an uproar.

Coordinating Minister for the Economy Boediono, who was ready to read out the reply, was taken by surprise. He could only gaze at Muhaimin and dozens of legislators who were arguing. Fortunately, the atmosphere calmed down slightly moments later. Muhaimin requested the Minister to proceed with the reply. However, Boediono had not even started when protests were again lodged.

Amid the fracas, Muhaimin chose a shortcut: the session was adjourned for 30 minutes. “All faction leaders should gather in the rear room,” said Muhaimin. The faction chiefs then headed for the room to negotiate. A number of legislators chose to have a chat in a room corner. Some simply deserted the gathering. The session was resumed at 1pm.

The DPR members’ protests stemmed from one point: the signature of Boediono in the interpolation response documents. They could understand the absence of President Yudhoyono, but the government reply papers should have been signed by the President rather than Boediono. “The reply signed by the Coordinating Minister for the Economy was very unworthy,” said Azlaini Agus from the PAN faction. The protesters were united in demanding the government revise the answer.

The DPR members apparently had from the beginning been prepared to protest at the session. Ade Daud Nasution from the Reform Star faction even brought along a megaphone. He said the device was needed because as the meeting became tense, room speakers would now and again be turned off by the committee. DPR employees, he added, “are civil servants, so they may be told to switch off the PA system.”

The internal furor also saw an external commotion. At the gate of the DPR building, some 500 people were clamoring. They demanded that the government immediately bring recipients of the public funds to trial.

The BLBI in the spotlight involves bail-out funds injected by the government when a number of banks crashed during the economic crisis in 1997. The total supplied reached about Rp144.5 trillion. Despite mounting credit injections, several banks continued to fail and even closed down. Claiming bankruptcy, their owners could not afford to repay the loans.

From the start the government chose out-of-court settlements to put an end to the dispute. Bank owners were asked to give up their assets to cover their debt repayments. The value of these assets was later assessed by independent auditors.

Assessment results varied. Some assets had adequate value, others were less worthy. Debtors with sufficient assets value received Certificates of Settlement (SKL). Those with such papers felt that their debts were over. That was not the case, though. Later, after being sold, the assets delivered had very low prices. Bank Central Asia, for instance, received a bail-out fund worth Rp60 trillion. Its owner, Anthony Salim, had handed over a number of assets as repayment. The independent auditors named by the Indonesian Bank Restructuring Agency (IBRA) had also assessed that the assets could settle Salim’s debts. After their sale, the price of all the assets turned out to be lower than the total of his debts.

Besides the low prices of assets, many entrepreneurs were also uncooperative. Some recipients of loans even chose to flee abroad. As a result, state losses in this case reached about Rp138.4 trillion (see The Story of Embezzled Funds).

Handled by four presidents and eight attorneys-general, the conclusion of the case is obscure. Some observers have alleged that the case implicating tycoons is purposely floated in order to be exploited by politicians. Attorney General Hendarman Supandji is determined to resolve the case legally. That’s why since end-2007, several businessmen like Anthony Salim have been examined.

Apart from that, DPR members have also been in action. Last year they gathered support to institute interpolation. The guerrilla tactics were fruitful: 71 DPR members signed the interpolation motion. In December 2007, a DPR plenary meeting approved the exercise of this right. On Tuesday last week, the government replied but the response was deemed unsatisfactory.

Suspicion has also arisen. “Indications are strong that the government has been discriminatory,” said Ganjar Pranowo, a politician of the Indonesian Democratic Party of Struggle (PDI-P). Some debtors were examined, but “uncooperative ones have been untouchable by law. What’s wrong?” protested a legislator.

After Tuesday’s plenary session, faction leaders will give their views. All these views will be presented in a plenary meeting, which so far has not yet been put on the agenda.

 Several other parties will soon study the reply. PDI-P, for example, has even formed a team of scrutiny with around 10 members. The team is in charge of selecting which part of the reply is accepted and which part rejected. Results of the study will determine the party’s stance.

Some sources revealed that leaders of the PDI-P faction and certain other factions were joining hands to garner support. They aim at a single target: persuading as many factions as possible to reject the government reply.

These faction heads are now assiduously lobbying. If the majority of DPR factions reject the reply, three “bullets” will be directed at the Yudhoyono government, namely the right to make inquiries, the right to ask questions, and the formation of a special committee. The three weapons indeed have greater political weight than interpolation.

Ganjar Pranowo confirmed such lobbying but they were on a person-to-person basis rather at an inter-faction level. “We have been chatting personally with several figures of some other factions,” acknowledged Ganjar. But he added the lobbying was not yet intensive.

Drajad Wibowo from PAN also admitted that he had been lobbying personally. The approach, according to Drajad, is usually made in the DPR building. Yet he added, “We’re only talking about familiar things, not too far yet.”

A number of politicians are not so sure of any follow-up to the interpolation. They speculate the maneuver will falter in the last round. “Pak Drajad Wibowo actually spoke aloud in the plenary session, but in the government he has Hatta Rajasa,” remarked Ganjar. Hatta, now Minister/State Secretary, is a PAN politician.

PDI-P politicians are also seen as launching a bluffing policy. It’s because under the government of President Megawati, through Presidential Instruction No. 8/2002, many delinquent debtors were forgiven. In other words, the PDI-P drive, if carried on, will be a suicide attempt. Therefore, belief is strong that the case handling will be deflated in the last bout. That’s when faction leaders offer their views. At that moment, said Ganjar, “the interpolation will just evaporate.”

Wenseslaus Manggut, Budi Riza, Anton Septian and Retno Sari

Source : Tempointeraktif.com

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February 15, 2008

Government data on bad debtors doubted

Abdul Khalik, The Jakarta Post, Jakarta

Lawmakers, businessmen and activists accused the government Thursday of including "inaccurate and outdated" data on a list of bad debtors it recently released to the public.

The data was "over-simplified", focusing only on 10 bad debtors who allegedly embezzled more than Rp 11 trillion out of a total of Rp 640.9 trillion disbursed by the Bank Indonesia Liquidity Assistance (BLBI) scheme, lawmakers said.

Gorontalo Governor Fadel Muhammad, included among the "non-cooperative" debtors, rejected the list, saying it contained "inaccurate and invalid" data.

The list showed the governor, who owned the now-defunct Bank Intan, had only repaid Rp 4.9 billion of his Rp 88.2 billion loan as part of the BLBI program.

Muchtar Luthfi, a lawyer for Fadel, one of Vice President Jusuf Kalla's closest aides, said the list used out-of-date 2002 data.

Muchtar said it should have included a verdict from the South Jakarta District Court that favored Fadel in a BLBI case against Bank Indonesia (BI) and the Indonesian Bank Restructuring Agency (IBRA) in 2006.

The court also ruled that Fadel had no further obligation to the state and, in fact, the government owed him Rp 23.5 billion, he said.

Fadel acquired Bank Intan on BI's suggestion to help prevent the country's banking collapse in March 1996.

Muchtar said his client submitted a total of Rp 65.5 billion to the bank plus Rp 10 billion in an escrow account to save the bank.

Fadel's companies later borrowed a total of Rp 31 billion from Bank Intan. Due to the 1998 monetary crisis, the bank incurred Rp 21 billion in losses and was taken over by the government under the BLBI program.

"So, Rp 65.5 billion plus Rp 10 billion minus Rp 21 billion minus 31 billion equals Rp 23.5 billion. This is the amount the state should pay back to us," Muchtar said.

Also questioning the list of BLBI debtors, released during Tuesday's questioning session at the House of Representatives, was regional Representatives Council member Marwan Batubara.

He said the data used on the list reduced the BLBI problems because it concentrated on 10 bad debtors who embezzled more than Rp 11 trillion, while the graft scandal involved a total of Rp 640.9 trillion disbursed in the scheme.

"The government's data focuses only on small fish while the problem is much bigger than that because the banking recapitalization program continues to put a burden on the state budget with interest payments of Rp 50 trillion to Rp 60 trillion per year," he told a BLBI discussion here Thursday.

The Megawati Soekarnoputri government issued a release and discharge policy under a presidential instruction to pardon debtors deemed cooperative after handing over assets valued substantially lower than their debts.

The policy led to the release of dozens of prominent businessmen with combined debts over Rp 100 trillion.

Lawmaker Ade Daud Nasution of the Crescent Star Party also questioned the government's focus on the 10 bad debtors.

"The scale of the embezzled money is much bigger. Presidential Instruction No. 8/2002 must be revoked to enable us to hunt down big debtors," he said at the discussion.

Noted lawyer Frans H. Winarta, also speaking at the same event, said the country needed senior government figures to solve the BLBI problem as well as consistent law enforcement against bad debtors.

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February 10, 2008

House, govt brace for showdown over BLBI

  Abdul Khalik and Desy Nurhayati, The Jakarta Post, Jakarta

The government is bracing for a showdown with the House of Representatives next week over a corruption scandal involving some Rp 702 trillion (US$77 billion) of Bank Indonesia Liquidity Support (BLBI) funds.

The State Palace said Friday the government will attend a questioning session scheduled for Tuesday at the House to answer 10 questions about the scandal. The questions were submitted last week to President Susilo Bambang Yudhoyono.

It is unclear whether the President will attend or if he will send one of his ministers. However, presidential spokesman Andi Mallarangeng suggested that Yudhoyono would take the second option.

"We assure you that whoever comes to the interpellation, the government will answer as best as it can," Andi said after a limited Cabinet meeting to prepare for the showdown.

The Friday meeting was attended by Coordinating Minister for the Economy Boediono, Finance Minister Sri Mulyani Indrawati, Coordinating Minister for Political, Legal and Security Affairs Widodo AS, State Secretary Hatta Radjasa, Attorney General Hendarman Supandji and National Police chief Gen. Sutanto.

Lawmakers separately said Friday the questioning motion was aimed at pushing the government to set legal and political certainties for conglomerates accused of stealing BLBI funds and about the amount of money that can be returned to the state.

Deputy House budgeting committee chairman Hari Azhar said the fact that the plan had been agreed upon by all the lawmakers showed their political commitment to ending the uncertainty surrounding the funds.

"We just want the money back, if not all, at least with the reasonable amount. That's all.

"Some of us want the President himself to come, but there is no rule to force him (to attend). So we'll see who will come as we haven't got any notification from the State Palace yet," Hari of the Golkar Party told The Jakarta Post.

Dradjat Wibowo of House Commission XI overseeing financial affairs said there was a political motive behind the questioning motion.

"I don't want to be naive and say that the interpellation move is free from political interests, but as far as the initiators of the move are concerned, we will push the government to return the people's money," he said.

For the first time since 1999, he said, the government would be asked to decide what it legal moves it would take against the fraudulent BLBI debtors and how much money it would recover from them.

"We have proposed in one of our 10 questions we raised in our interpellation letter that the government should make everything clear by August, and if possible get some of the money back," said Drajad from the National Mandate Party (PAN).

Bank Indonesia provided the liquidity support funds (BLBI) to help ailing banks during the Asian monetary crisis in 1997 and 1998.

However, only a very small amount of the Rp 702 trillion lost could be recovered after the crisis.

On Thursday, the Finance Ministry and the House agreed to set the amount of BLBI funds owed by seven of the 40 debtors at only Rp 2.297 trillion. The seven businesspeople were those who came to the presidential office and promised to repay their debts.

The Golkar Party and the Indonesian Democratic Party of Struggle (PDI-P), the two largest House factions, had previously opposed questioning the President because they said it might disclose the alleged flow of funds to both parties.

Several figures from the two parties were believed to have been involved in the disbursement of BLBI funds to eight private banks during the economic crisis.

The PDI-P was also blamed for halting investigations into certain BLBI debtors under the so-called Master of Settlement Agreement.

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