Indonesian House Probe Of Century Bailout Begins

The politically charged investigation into the Bank Century bailout by the House of Representatives begins today with the expected appearance of the leadership of the Supreme Audit Agency. The investigative committee, which is chaired by a member of the Golkar Party and dominated by pro-government lawmakers, has been widely seen as politically motivated, pitting entrenched political forces against relative newcomers Finance Minister Sri Mulyani Indrawati and Vice President Boediono, who was central bank governor at the time of the November 2008 bailout. Analysts question whether such a tribunal, taking place in the partisan atmosphere of the House, will be able to get to the bottom of the controversial Rp 6.7 trillion ($710 million) bailout. Political observer Arbi Sanit, of the University of Indonesia, said the matter would ultimately come down to politics, with the ruling coalition of President Susilo Bambang Yudhoyono’s Democratic Party dominating the committee, with 23 out of 30 members. “The conclusion will be determined by the majority who support the government,” Arbi told the Jakarta Globe. Adrianus Meliala, a criminologist from the University of Indonesia, added, “The committee should not consider itself a legal body, and should not use the approach of trying to find whether someone violated the law. This is a political process.” While there is no official target of the investigation, Sri Mulyani has said that Golkar chairman Aburizal Bakrie was trying to use the probe to oust her over longstanding policy differences. Golkar has dismissed the claims. Both Sri Mulyani and Boediono have said the bailout was necessary to protect the stability of the financial system at the height of the global financial crisis. Both are expected to testify during the probe. Boediono is scheduled to appear next week. Taufiqurrahman Ruki, deputy chairman of the Supreme Audit Agency (BPK), said on Tuesday that the agency’s leadership was ready to answer any questions. “We will share what we know about the case,” he said, referring to the BPK’s audit, which concluded that much of the money spent on the bailout lacked a legal basis. The Financial Transaction Reports and Analysis Center (PPATK) is scheduled to face questioning on Thursday as the committee attempts to determine the recipients of the bailout money, said committee deputy chairman Gayus Lumbuun, of the opposition Indonesian Democratic Party of Struggle (PDI-P). In addition to Boediono, former Bank Indonesia Governor Burhanuddin Abdullah and former deputies Aulia Pohan, Miranda Goeltom and Anwar Nasution are scheduled to face questioning. Burhanuddin and Aulia are currently serving prison terms for convictions in an unrelated corruption case. The former central bank officials will be questioned about the establishment of Bank Century in a complex merger of three banks in 2004. Boediono’s spokesman, Yopie Hidayat, said the vice president was prepared to face the House committee. “Boediono is ready to explain what happened,” Yopie said. “From the very beginning, he has said he wanted the case resolved.”

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