Witness in Bank Indonesia Case Links ‘Bribe’ to Megawati Campaign

In the latest twist in a bribery case linked to the 2004 appointment of a central bank senior executive, a witness told the Antigraft Court on Monday that some of the alleged Rp 24 billion involved went into former President Megawati Sukarnoputri’s election campaign coffers.

Budiningsih, a former lawmaker from Megawati’s Indonesian Democratic Party of Struggle (PDI-P), told the court the defendant, former party lawmaker Dudhie Makmun Murod, had given her Rp 500 million ($55,000) soon after she voted for economist Miranda Goeltom to be appointed to the Bank Indonesia post.

Dhudie “told me that it was for the presidential campaign,” she said. “I was only told that the money was for [Megawati’s] campaign.
That is all.”

Budiningsih added that she contributed to Megawati’s 2004 campaign for the presidency in East Java and Yogyakarta.

Dudhie has said that Budiningsih “knew the money was linked to the House of Representatives selection process” to fill the central bank post.

But Budiningsih said she only joined House Commission IX, which oversees banking affairs, just before the voting process and had no knowledge of the alleged bribery.

Tjahjo Kumolo, head of the PDI-P faction in the House, declined to comment on Budiningsih’s testimony.

The court also heard the testimony of two former PDI-P lawmakers, Poltak Sitorus and Suwarno, and a current legislator, Ni Luh Maryani Tirtasari.

They said Dudhie also gave each of them Rp 500 million in traveler’s checks after they cast their votes for Miranda.

“We received the money at Dudhie’s office but weren’t told what the money was for,” Suwarno told the court.

Dudhie’s lawyer, Amir Karyatin, said the checks were handed over at the office of PDI-P lawmaker Emir Moeis, who chaired Commission IX.

“But all the witnesses said they received the checks at Dudhie’s office,” the lawyer said.

“That’s impossible. They couldn’t even say where Dudhie’s office was located.”

Amir said the uniform testimony of the three “almost feels like it was orchestrated.” But Tjahjo said “there was never any briefing prior to the hearing.”

Miranda won her post with the backing of 41 of the 51 Commission IX members.

The Corruption Eradication Commission (KPK) has identified 39 current and former lawmakers as having received from Rp 200 million to Rp 2.25 billion after voting for Miranda.

Four current and former lawmakers, including Dudhie, face charges of distributing the bribe among fellow party members.

PDI-P Lawmaker Goes on Trial in Bank Indonesia Vote-Buying Case

Sitting lawmaker Dudhie Makmun Murod went on trial at the Anti-Corruption Court in Jakarta on Monday for his alleged role in a Rp 24 billion ($2.6 million) bribery case linked to the appointment of a central bank senior deputy governor in 2004.The House of Representatives member from the opposition Indonesian Democratic Party of Struggle (PDI-P) is accused of distributing Rp 9.8 billion to 18 fellow party members serving on House Commission IX, which at that time oversaw financial and banking affairs, in return for voting economist Miranda Goeltom into the Bank Indonesia post. Miranda was also backed by dozens of lawmakers from three other party factions — who were also alleged to have taken bribes — and enjoyed a landslide victory with 41 votes from the 51-member House commission. Former lawmakers Hamka Yandhu of the Golkar Party and Udju Djuhaeri from the Police and Military faction, as well as sitting United Development Party (PPP) lawmaker Endin Soefihara, are now awaiting trial for allegedly distributing the bribe money to their respective faction members. Dudhie, who claims he’s a scapegoat and last month vowed to drag down fellow PDI-P lawmakers with him, could face up to five years in prison if convicted. “Shortly after voting for Miranda on June 8, 2004, the defendant was asked by fellow party member Panda Nababan to meet a man identified as Ahmad Hakim Safari, also known as Arie Malangjudo, at Bebek Bali restaurant in the Senayan area of South Jakarta,” lead prosecutor Muhammad Rum told the court. The prosecution, from the Corruption Eradication Commission (KPK), alleged that Dudhie went to the restaurant to receive the bribe in the form of traveler’s checks issued by Bank International Indonesia that originated from businesswoman Nunun Nurbaeti Daradjatun, wife of former National Police deputy chief Adang Daradjatun. Nunun’s lawyer, Partahi Sihombing, acknowledged on Monday that Ahmad was an aide to the businesswoman, but said he had not acted on his client’s behalf. Ahmad “is not just any man, he knows many politicians and lawmakers,” Sihombing said. “Nunun has pointedly denied that she distributed bribe money,” he said. The prosecution alleged that Ahmad gave Dudhie a red envelope containing traveler’s checks meant for PDI-P lawmakers, each of whom allegedly received between Rp 350 million and Rp 1.45 billion. The prosecution also said Ahmad had yellow, green and white envelopes — PDI-P, Golkar and PPP’s party colors are red, yellow and green, respectively. “The defendant kept Rp 500 million for himself,” Rum said. Among the PDI-P lawmakers said to have accepted bribes were senior party members Panda Nababan and Agus Condro Prayitno, who were the first to admit involvement to KPK investigators. Agus, who was immediately thrown out of the PDI-P after blowing the whistle on his fellow party members, welcomed the start of Dudhie’s trial. “The KPK must resolve the case and bring Panda and Tjahjo to justice,” he said, referring to PDI-P secretary general Tjahjo Kumolo. The prosecution said that Tjahjo played a central role in the bribery by instructing every PDI-P lawmaker to vote for Goeltom during a meeting at the Dharmawangsa Hotel in South Jakarta on May 29. Dudhie’s lawyer, Amir Karyatin, said the defense would not challenge the indictment. “We want the case to be over quickly. My client is willing to cooperate,” Amir said. “Dudhie is just a victim. The trial will reveal who the real mastermind is.”

No Suspension for Boediono, Sri Mulyani: SBY

President Susilo Bambang Yudhoyono on Friday night said there was no need for Vice President Boediono and Finance Minister Sri Mulyani Indrawati to be suspended during the House investigation into the Bank Century bailout. “Neither Vice President Boediono nor Finance Minister Sri Mulyani have to be temporarily suspended or discharged” during the investigation, Yudhoyono told a press conference in Copenhagen, where he is attending the UN climate talks. The special House investigating committee on Thursday called for the president to suspend the two during the proceedings. Supporters of the pair have expressed hope the president would back them publicly. Yudhoyono said there was no legal basis for suspending the officials. He said he made the decision after talking to both Boediono and Sri Mulyani, who assured him that they could discharge their duties while answering questions posed by the House committee. He added that having them step aside would harm the economy.

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.”

Minister: ‘SBY Won’t Abandon Sri Mulyani and Boediono’

House of Representatives Speaker Marzuki Alie said over the weekend that President Susilo Bambang Yudhoyono continued to support Vice President Boediono and Finance Minister Sri Mulyani Indrawati, who are under pressure to resign for their roles in the bailout of Bank Century last year. Marzuki, a senior member of Yudhoyono’s Democratic Party, said there was no rift within the cabinet, and denounced personal political statements that muddled the ongoing House investigation into the Rp 6.7 trillion ($710 million) bailout. “SBY is a consistent person, he won’t abandon Sri Mulyani and Boediono,” Marzuki told journalists in Bogor on Saturday, referring to Yudhoyono. “There’s no rift in the cabinet. SBY will take responsibility. He is the one who really knows what’s happening in the cabinet,” Marzuki said. Analysts have been predicting the imminent demise of Boediono, who was central bank governor at the time of the Bank Century bailout in November 2008, and Sri Mulyani, who agreed with the decision to save the troubled lender. There has been rampant speculation that figures within the Golkar Party, as well as from other members of Yudhoyono’s coalition government, were plotting to oust the vice president and finance minister in the hope of getting their own officials into the powerful positions. Boediono and Sri Mulyani are respected technocrats, but analysts have said they are vulnerable because they do not have a political base. However, Marzuki’s comments indicate that Yudhoyono, who left for an official visit to Europe on Sunday, still backs the pair. His comments may yet help turn the tide in favor of the vice president and finance minister. Bambang Soesatyo, a Golkar lawmaker who claimed to have incriminating evidence against Sri Mulyani relating to the bailout, was forced to backtrack on Sunday after the finance minister released a videotape that disputed his claims. Bambang lashed out at Mulyani on Friday after she said in a newspaper interview that she doubted Golkar would be fair to her in investigating Bank Century, and also criticized its chairman, Aburizal Bakrie. 

Sri Mulyani Hits Back at Critics Over Bank Century

Finance Minister Sri Mulyani Indrawati launched a counterattack against her political critics on Sunday, producing a videotape that refuted allegations she had huddled with former PT Bank Century owner Robert Tantular before deciding to bail out the troubled lender last year. The video was of the final part of a brainstorming session of the Financial System Stability Committee (KSSK) with senior officials from the central bank, the Finance Ministry and the Deposit Insurance Agency (LPS) on Nov. 21, 2008, the day the committee decided to bail out Bank Century. The tape shows Sri Mulyani, Vice President Boediono ­— the BI governor at the time — KSSK secretary Raden Pardede, head of the President’s Working Unit for the Management of Reform Programs, Marsilam Simanjuntak, and other officials. However, Tantular was not seen or heard on the tape. On Friday, Golkar’s Bambang Soesatyo, a member of the House of Representatives committee investigating the controversial Rp 6.7 trillion ($710 million) bailout, claimed to have a recording of a conservation between Sri Mulyani and Tantular at the meeting in question, in which the disgraced banker allegedly urged the minister to “just make the conclusion that the economy is in crisis” and rescue the bank. His comments were met with swift denials by Sri Mulyani, Boediono and Tantular, who is now in prison for fraud. “I never met, talked to or even personally know a person named Robert Tantular,” Sri Mulyani said. “It is despicable slander. We all hope the investigations go on transparently and credibly.” The House and the Corruption Eradication Commission (KPK) are investigating the bailout amid unsubstantiated allegations that some of the funds were embezzled by political figures, including President Susilo Bambang Yudhoyono’s re-election team. The Supreme Audit Agency (BPK), which conducted a damning audit of the bailout, is scheduled to meet today with officials from the KPK, National Police and Attorney General’s Office to discuss its findings. Last week, Sri Mulyani told the Wall Street Journal that the House investigation into the Bank Century bailout was an attempt to discredit her. She also expressed doubts that the Golkar Party, which has been pushing for a full investigation, would be fair to her, given her strained relationship with the party’s chairman, Aburizal Bakrie. Her comments sparked outrage among Golkar lawmakers, causing further speculation that Sri Mulyani’s days as finance minister were numbered. Prior to Sunday, there had been a growing chorus among lawmakers for Sri Mulyani, as well as Boediono, who had pushed for the bailout, to resign to avoid hampering the investigations. However, it appears that Bambang overplayed his hand. Raden said the voice on the videotape that Bambang had claimed was Tantular was actually Marsilam. Tantular, he said, was waiting on the second floor of the Finance Ministry, while the meeting was held on the third floor. “He was brought there by the central bank because his bank was likely about to be bailed out,” Raden said of Tantular. Marsilam, he said, interrupted Sri Mulyani as she was mentioning Tantular’s name, creating the appearance he was part of the conversation. Earlier on Sunday, Bambang reiterated that Golkar had received a recording of a conversation between Sri Mulyani and Tantular and needed to confirm when it occurred. He also said it didn’t matter if the recording was wrong because, as a lawmaker, he was immune from prosecution. “What I said was in accordance with my duties. My duty is to find evidence, which is the recording. If it is said to be slander, prove it.”

Indonesian Security Chiefs Prepare for Riots

Activists demanding a thorough investigation

into the Bank Century bailout case at a demonstration
in front of the KPK building in Jakarta on Monday

The country’s top security officials said on Monday that they were preparing for possible riots in Central Jakarta and that military troops would be on standby for a planned anticorruption rally at Monas this week. The alert comes a day after President Susilo Bambang Yudhoyono speculated that his political enemies would attempt to hijack the protest to attack him. His security minister, the National Police chief and the head of the spy agency have huddled to discuss how to prevent agitators from hijacking Wednesday’s rally, organized by the Clean Indonesia Movement to commemorate International Anti-Corruption Day. The Jakarta Police announced that 14,000 officers, nearly half its force, would be on duty to guard the rally. The security chiefs said the central government was worried that the rally would be manipulated by certain groups and harm the public. But just like the president on Sunday, they named no suspects and did not elaborate. “I really hope the organizer of the rally will raise awareness about such possible manipulation,” said Djoko Suyanto, coordinating minister for political, legal and security affairs. “Are there any indications that riots will happen? I think you can answer that by yourselves.” Djoko said the government would not issue a special alert level for police and the Indonesian Armed Forces (TNI). “I hope nothing will happen. The police will work as usual, but their level of alertness will be increased. TNI troops will be in position.” Fadjroel Rachman of the Anti-Corruption Civil Society Coalition (Kompak), one of the rally’s organizers, appealed for calm. “It would be better to stop saying to people that the Dec. 9 movement is for treason, being used [by political interest groups] or being funded by corruptors,” he said. National Police Chief Gen. Bambang Hendarso Danuri said the police would provide an opportunity for rally participants to speak. But he said freedom of speech also had to respect the law. “We will guard the rally to keep it on the right track,” said Bambang, whose agency is under fire for allegedly framing two anticorruption officials for extortion. Sutanto, head of the State Intelligence Agency, said the public must bear in mind that groups had manipulated public movements in the past. “So be aware,” he said. “You journalists know who the manipulators are because most of them access the media organizations.” It is widely believed that the groups being referred to are opposition parties in the House led by the Indonesian Democratic Party of Struggle (PDI-P). Army Chief Lt. Gen. George Toisutta said there were no special preparations for the rally, but the military was ready for trouble. “We have a lot of experience with riots, which would make [the country take] a step backward rather than forward, ” he said. He said he hoped the demonstrators wouldn’t be provoked. “The people now are smarter and no one wants any unrest.” Speaking last week and on Sunday, Yudhoyono said his political opponents planned to use the rally to target him and his government over the Bank Century scandal. The Corruption Eradication Commission (KPK) and House of Representatives have launched separate probes of the government’s controversial Rp 6.7 trillion ($710 million) bailout of the bank amid unsubstantiated allegations that some of funds were embezzled by the Democratic Party. Some political analysts labeled the president’s remarks last week as “paranoid.”

Indonesian President Lashes Out at Unnamed Conspirators

President Susilo Bambang Yudhoyono on Sunday accused unnamed figures of using the Bank Century bailout scandal to topple his government and possibly force him from office. He also repeated claims he made last week that his political opponents were behind a planned demonstration at Monas on Wednesday to mark International Anti-Corruption Day. Yudhoyono, Vice President Boediono and Finance Minister Sri Mulyani Indrawati have been under fire over the government’s Rp 6.7 trillion ($710 million) bailout of Bank Century amid unsubstantiated allegations that some of the money was embezzled. Both the House of Representatives and the Corruption Eradication Commission (KPK) are now investigating the bailout. “I, along with my wife and family, pray at midnight, seeking answers behind all the defamation and character assassinations,” Yudhoyono said. “My common sense says the current political behavior, in the short term at least, wants to discredit, shake and if possible, throw out SBY and the administration that he leads,” Yudhoyono said while briefing members of his Democratic Party during a national leadership meeting at the Jakarta Convention Center. The president also accused unnamed persons of having a long-term plan of damaging the reputation of the Democrats so the party will lose the 2014 general elections. He said defamatory statements, such as accusations that money was diverted from the Century bailout into Democratic Party coffers, had surfaced from nowhere and shocked the public just as the party was preparing to celebrate its eighth anniversary on Sunday. Last week, the People’s Democratic Defense (Bendera) a fringe nationalist group, claimed to have evidence that Rp 1.8 trillion was channeled to Yudhoyono’s re-election campaign, members of his inner circle and various state agencies. The accused officials countered by filing a criminal defamation complaint with the police. “What we know, God knows, history knows, there’s not even one cent that illegally came into our party’s campaign fund. That’s the doctrine and philosophy we practice,” Yudhoyono said to applause. The president said any Democrat found to have broken the law would be punished. However, he urged party members not to seek retribution against their opponents, and invoking the May 1998 riots, warned them against violence. “Don’t be tempted to cross the dark line or [into] dark politics,” the president said. Again addressing the antigraft demonstration scheduled for Wednesday, Yudhoyono said it was politically motivated and that he was fully aware of who the target of the protests would be. He did not elaborate. Some political analysts labeled the president’s remarks last week as “paranoid.” Other analysts said Yudhoyono was trying to portray himself as a victim under attack from all corners to gain public sympathy.

Indonesian President Says Opposition is Behind Anticorruption Protest

Under growing pressure over the PT Bank Century fiasco, President Susilo Bambang Yudhoyono alleged on Friday that opposition political forces were behind moves for an antigraft demonstration scheduled to mark International Anti-Corruption Day on Wednesday. Political experts and religious figures immediately criticized the remarks as “paranoid” and an attempt to stifle free speech. Yudhoyono, speaking during a cabinet meeting on Friday, said he had been warned that the true motives of some expected at the protest were not to rid the country of graft. “It is politically motivated, which is not always related to the effort of eradicating corruption,” Yudhoyono said. Public resentment continues to simmer over the state’s failure to adequately resolve the Bank Century and Corruption Eradication Commission (KPK) scandals. A number of leading nongovernmental organizations, grouped under the Civil Society Coalition Against Corruption (Kompak), are planning to hold anticorruption marches in 33 provinces, including Jakarta, on Wednesday. Yudhoyono said the massive news coverage of the Bank Century scandal — which has implicated senior members of his cabinet and led to allegations that his re-election campaign benefited from the bailout — was also partially politically motivated. “I said that to you not to surprise you later,” he told his ministers. “But whatever happens in Jakarta, don’t let it disturb our concentration and spirit to carry out our main duties to succeed in the development [of the country] and to increase the welfare of the people.” Yudhoyono said public reaction over the past five weeks had been excessive. “It’s part of freedom of expression, part of democracy, as long as it doesn’t disturb the stability of the nation,” he said, adding that in such circumstances it would be the people who suffered. Political expert Andrinof Chaniago acknowledged the issue was prone to hijacking but said the government should not react in a way that would harm true anticorruption protesters. Fadjroel Rachman, a senior activist from Kompak, said the president should not react to the demonstration with paranoia. “We just want Indonesia to be free of corruption,” he said. “If the president has any suspicions about what we do, he should join the demonstration on Dec. 9 and see himself that it is a pure anticorruption movement.” “If he’s clean, why bother such peaceful movement,” he said. Din Syamsuddin, leader of Muslim organization Muhammadiyah, who will speak at the demonstration, said the government shouldn’t overreact to the public criticism. “Government reaction to shut off criticism is a new form of political authoritarianism and is against democracy and reform,” he said.

Indonesian Bailout Investigations ‘May Hurt Economy’

Masked protesters rattling their cage in front of

the vice president’s palace in Jakarta. They demanded an investigation into
Vice President Boediono and Finance Minister Sri Mulyani
related to their role in the Rp 6.7 trillion ($710 million)
bailout of PT Bank Century

As the Corruption Eradication Commission formally announced its own probe into the controversial Rp 6.7 trillion ($710 million) state bailout of PT Bank Century on Wednesday, economists warned the fallout from the investigation could have serious consequences for the economy. Tumpak Hatorangan Panggabean, chairman of the commission, known as the KPK, said its decision to investigate was made after it examined the report by the Supreme Audit Agency (BPK), which it obtained last week. Tumpak said the commission would consult with the BPK and the anti-money laundering agency, the Financial Transaction Reports and Analysis Center (PPATK), “to get better information.” Data will also be sought from the Finance Ministry, Bank Indonesia and the Deposit Insurance Agency (LPS), he said, adding that he had signed a request for the PPATK to trace where the bailout money was channeled. The PPATK has found irregularities in more than 59 transactions from 44 personal and seven institutional accounts in Bank Century to 10 other banks, totaling more than Rp 146.7 billion. It has so far failed to track where the money went. “We will soon summon everyone that we feel is necessary,” Tumpak said. Vice President Boediono, central bank governor at the time of the rescue, has been blamed for the bailout along with Finance Minister Sri Mulyani Indrawati, but both immediately welcomed the KPK’s move, which comes a day after the House of Representatives approved plans to launch a probe by lawmakers. “We don’t have to wait for the House investigation for the law enforcers to carry out a thorough investigation,” Boediono said. “To avoid prejudice and to calm the people, the investigation should be completed soon.” Politicians and activists have called for Boediono to step down. Some say he pushed for the bailout despite opposition from financial regulators and the Finance Ministry. A pale-looking Sri Mulyani, speaking with a rasp at an investor summit in Jakarta on Wednesday, said she was ready to face the House’s questions. “All we did at that time was to save our economy. I hope we all can see the policy and its result more objectively. Because we all work to establish a more reliable state order,” she said. Technocrats Boediono and Sri Mulyani are two of the most respected members of President Susilo Bambang Yudhoyono’s new cabinet, which is stacked with political appointees. Citigroup economist Johanna Chua, meanwhile, said events surrounding the bailout inquiry were “raising political risk in Indonesia,” adding that the involvement of Boediono and Sri Mulyani “in the ongoing investigation is the main source of political risk.” “It potentially could have adverse consequences,” Chua said. “It is unclear how far the inquiry will go and what type of political consequences may hit President Yudhoyono’s administration, particularly as the markets favor Boediono and Sri Mulyani.” Danareksa Research Institute economist Purbaya Yudhi Sadewa said it would be costly for the country if the two were removed. “There would be a great shock in the market and the rupiah may be affected, although it depends on who would be replacing the two.” KPK spokesman Johan Budi said it would work separately from the House special committee, as they “work in different areas. One is political while another is legal,” he said. The KPK is seen as the country’s best-performing law-enforcement agency, but it has been undermined by recent attempts to prosecute its leaders. Rumors have circulated that some Century money made its way into President Yudhoyono’s re-election campaign. Yudhoyono and his allies have vehemently denied the claims and have filed a defamation complaint against a fringe nationalist group over them.

Bank Century Data Dispute Gets Murky

A confusing dispute between two government agencies over financial information related to the probe of the PT Bank Century bailout has deepened, while the agency directly involved in the bailout has denied that any of the funds were diverted for political uses. The government anti-money laundering agency, the Financial Transaction Reports and Analysis Center (PPATK), said it never barred the Supreme Audit Agency (BPK) from accessing its data during a recently completed audit of the controversial bailout. “We want to clarify that the PPATK never refused any information demands from the BPK. The misinformation, we believe, is due to a misunderstanding [by the BPK] about the procedure for requesting information,” PPATK head Yunus Husein said in a statement obtained on Friday. BPK chairman Hadi Purnomo said earlier that his institution was unable to trace the bailout money because it could not obtain the relevant data from the PPATK. He also claimed that the law only allowed the PPATK to provide data on troubled companies to the police or prosecutors. The BPK’s failure to trace the Rp 6.7 trillion ($710 million) that was injected into Century last year has led to lawmakers pushing for their own inquiry and fevered speculation in the media over the uses of the money. Yunus said the BPK sent his agency several request letters seeking access to the data, but used the “wrong format” in the requests. He did not elaborate. Yunus said the PPATK asked the BPK to revise the requests but did not receive a response. He also said there was no current law barring his agency from cooperating with the BPK. “We state that the PPATK can give the information needed by the BPK,” Yunus said. Meanwhile, the Deposit Insurance Agency (LPS), the government body that rescued Century, insisted there was no “direct flow of funds” from the ailing bank to political parties in the run-up to the general elections this year. LPS Executive Director Firdaus Djaelani, told reporters on Thursday that Rp 4.3 trillion in deposits were retrieved from the bank between November 2008, when the bailout money was injected into Century, and December that year. The money was taken by depositors and not political parties, Firdaus said. Rumors have circulated widely that some of the bailout money was used to finance President Susilo Bambang Yudhoyono’s Democratic Party or to illegally bail out important depositors, like businessman Boedi Sampoerna. Government officials involved in the bailout, including Vice President Boediono, who was central bank governor at the time, have said the rescue was necessary to save the banking system from risk during the global financial crisis and have denied having any political agenda for the action. “The bailout money was not used to pay the campaign team of a certain political party, not even one cent,” Firdaus said during a news conference with the management of PT Bank Mutiara, the new name of Bank Century. “Soon after the bailout, many depositors asked for their money to be transferred to other banks. We do not know where the money went after it left the bank and it is beyond our control. These depositors were real and had accounts in the bank.” Firdaus said that Rp 1.8 trillion of the Rp 4.3 trillion that left the bank after it was bailed out was mostly held by 328 big depositors, with each having more than Rp 5 billion in deposits. The LPS only guaranteed deposits of up to Rp 2 billion. He said the biggest depositor to pull out its money at the time was a state-owned company, but he did not give a name. “There is also nothing wrong with that. The bank was operating normally [after the bailout] and accounts were not frozen,” Firdaus said. “Depositors could take out their money.” He added that while a lot of money had left the bank, its new management had been able to convince more than half of the banks’ existing depositors to keep their money in the restructured bank.

Indonesia Finance Minister Backs Bank Century Bailout

Government officials fingered by the Supreme Audit Agency as being responsible for alleged irregularities in the bailout of ailing PT Bank Century maintained on Tuesday that without the Rp 6.7 trillion ($710 million) rescue, the bank’s collapse could have ruined the country’s financial system. In a report of its probe into the November 2008 bailout submitted to the House of Representatives on Monday, the audit agency, also known as the BPK, said that as much as 40 percent of the bailout was effectively illegal and the decision to disburse the money had been subjective and not based on measurable criteria. Finance Minister Sri Mulyani Indrawati, who led the committee that determined that Century needed help, said the bailout was “legal” and failure to act might have “burned” the nation’s finance sector. She said that without the rescue, the country’s banking industry could have faced the threat of a liquidity crisis in light of the global financial meltdown. Sri Mulyani also justified Bank Indonesia’s analysis that defined Century as a “failing bank that poses a systemic threat,” saying that BI data showed that 23 banks of a similar size or smaller and a number of regional banks were also suffering liquidity problems at the time of the rescue. BPK Chairman Hadi Purnomo said the move to label Century as a failing bank that posed a systemic threat to the country’s financial system was not based on solid criteria, but on quick “subjective” judgments. Sri Mulyani said that despite reservations about how former Century shareholder, and now convicted criminal, Robert Tantular ran the bank, Century still needed to be rescued. “Suppose we know a house owner who is a drunkard and a criminal who annoys everyone around him. When his house catches fire, we cannot just sit and enjoy his suffering. Because it’s in our interest to ensure the fire does not spread to other houses around his,” she argued. But the minister also vowed to support a planned inquiry by the House of Representatives into the controversial bailout. The government initially injected Rp 1 trillion to boost liquidity at Century after the Indonesia Deposit Insurance Corporation seized it on Nov. 21 last year, eight days after the lender failed to meet a Rp 5 billion obligation on time. The bank has since received Rp 6.7 trillion in funds, prompting lawmakers to demand an inquiry into the bailout, which was far more than what they had approved. “We fully support the House in conducting the inquiry, considering it will help to answer all questions, put the Bank Century case in the right place and make clear the results of investigative audits by the BPK as well as the accountability of the decisions that had been made,” Sri Mulyani said. Vice President Boediono, who was central bank governor at the time of the bailout, said that he still needed time to study the BPK report, which he received late on Monday evening. He promised to give “as complete an explanation as possible,” after having studied the report. “I have a feeling that we can explain well and show that what had been done in the time of crisis was really appropriate under the conditions.” The BPK also said BI gave the state inaccurate information about Century’s finances in the critical days last November when the decision was made to save it. Darmin Nasution, the central bank’s acting governor, denied the claim that BI had given out-of- date data to inform the bailout decision. “It is normal” for banking data to be processed for some time before it is given out, he said.

On the Record: Responses to BPK

BPK: The BPK [Supreme Audit Agency] assumed that Bank Indonesia made a revision of the capital adequacy ratio regulation to allow ailing Bank Century to access the central bank’s liquidity facility.

Darmin Nasution (Bank Indonesia acting governor): BI made the revision to reduce the effects of the global financial crisis on domestic banks.

BPK: Bank Indonesia did not give real, sufficient and up-to-date information on Bank Century to the Financial System Stability Committee [KSSK] on Nov. 20 [2008] — information that was used to decide whether the bank posed a systemic risk.

Darmin: Data provided to the KSSK was the latest available data at the time. It was data about the bank’s condition on Sept. 31 and the bank’s capital adequacy on Oct. 31. It takes time to gather information from 65 Bank Century branches.

BPK: Bank Indonesia and the KSSK did not have a measured criteria to say that Century posed a systemic risk.

Sri Mulyani: The KSSK made the decisions based on three main considerations: the decision was legal by law, it was made under the scope of our authority, it would have the most benefit [to the bank and the country] and [the decision] was accountable.

PK: The KSSK decision that declared Century a failed bank that posed a systemic risk violated the law because it did not mention the amount that should be paid by the Indonesia Deposit Insurance Corporation [LPS] to bail out the bank.

Sri Mulyani: Principally, there are no laws that explicitly state that the KSSK has to mention the bailout cost.

BPK: The capital injected into Century after Dec. 18, 2008, had no legal base since an emergency 2008 regulation on the Financial System Safety Net had not been approved by the House of Representatives.

Sri Mulyani: Under the LPS law, the LPS can inject as much funds are necessary into a supervised bank to ensure the bank’s capital adequacy and liquidity flow, without further approval from the KSSK.

Indonesian Audit Agency Blames Central Bank for Century Bailout

The Supreme Audit Agency said in a report released on Monday that as much as 40 percent of the Rp 6.7 trillion ($710.2 million) used to bail out the former Bank Century was effectively illegal, and cited other serious wrongdoings that needed to be investigated by law enforcement agencies. In a damning report that has been eagerly awaited for months, the agency, also known as the BPK, placed most of the blame surrounding the controversial bailout on Bank Indonesia. It said the central bank gave the government inaccurate information about Bank Century’s financial status during the critical days in November 2008 when the decision was made to save the bank. The central bank was also accused of failing to properly monitor Bank Century from its inception in 2004. The BPK report also said $18 million of government’s bailout funds were transferred into the accounts of a Bank Century customer identified as “BS” and believed to be Boedi Sampoerna, a member of the powerful Sampoerna business family and an ally of the president. “The BPK has no powers of legal enforcement, so a number of likely breaches of law found in this investigation still need further investigation by law enforcement agencies,” BPK Chairman Hadi Purnomo said. The report said Rp 2.8 trillion of the money injected into the bank had no “legal basis” because the funds were disbursed after the House of Representatives had rejected an emergency government regulation creating the Financial Sector Safety Net. Regarding the decision to bail out the bank, the report blamed the central bank and members of the Financial System Stability Committee (KSSK), comprised of senior officials from the Ministry of Finance and central bank. The report stated that the determination that Bank Century was a “failing bank which posed a systemic threat” to the country’s financial system was not based on measurable criteria, but on quick, “subjective” judgements. Finance Minister Sri Mulyani Indrawati, who played a key role in the bailout, said she would hold a press conference today to respond to the report. Vice President Boediono, who was central bank governor at the time, has also come under scrutiny. A recording of the meeting in which the decision was made indicated he pushed for the bailout. Bank Indonesia on Monday issued a statement saying it had “been cooperative and supported” the audit, but said the report did not consider the “atmosphere of serious crisis” when the bailout decision was made, referring to the global financial crisis. Furthermore, the KSSK’s order to the Deposit Insurance Agency (LPS) to bail out the bank without specifying its cost was also unlawful, the report said, as was the LPS’s failure to not attempt an initial estimate of the total financial cost to the state. The report also faulted BI for allowing a total of Rp 938.65 billion in customers’ funds to leave Bank Century after the institution was placed under “special supervision.”

Indonesian Vice President Ready to Face Bailout Inquiry

Vice President Boediono on Friday announced his readiness to be questioned by the House of Representatives over the controversial Rp 6.7 trillion ($717 million) bailout of PT Bank Century, which was disbursed last year while he was central bank governor. “I believe this is the right and the role of the House to decide what it needs to know, and summon [officials] of the government. We are ready,” Boediono said at his offices. The statement came a day after House Speaker Marzuki Alie formally accepted a motion from 139 lawmakers to launch intensive investigations into the scandal. Members from eight of the nine parties in the House were represented in the petition. President Susilo Bambang Yudhoyono’s Democratic Party was the exception. Eighty of the motion’s signatories were from the Indonesian Democratic Party of Struggle (PDI-P). Boediono, who recommended the bailout when he was head of Bank Indonesia, said he wanted to help clear up the case. “The motion aims to provide new insight. We want everything to be clear,” Boediono said. “The vice president is also a citizen. As a citizen, I am ready to be questioned.” The government’s decision to bail out the ailing bank at the time was an effort to overcome an emergency situation. There was an extraordinary problem, including a liquidity problem. So, if any criminal act had been committed in the bail-out process, it should be investigated, no matter who was involved, he said. The Century bailout spurred public outrage because the government had injected Rp 6.7 trillion through the Deposit Insurance Agency (LPS) last November to save the privately owned bank when the House had only approved Rp 1.3 trillion. The government has argued that the bank’s failure would have had a domino effect on the financial sector amid the global economic downturn. Boediono argued that in time of crisis, “Saving [a bank] should come first. If there is any fraud, then it should be followed up legally later.” The House is scheduled to deliberate next week on whether to proceed with investigations of the Century rescue. Democratic Party lawmaker Sutan Bhatoegana said such a probe would “not be effective,” and dismissed any possible significant outcome from the scheduled deliberations. “Judging from the previous motion to probe the mafia in the gas industry, I believe the motion would not be effective. [The earlier] motion only resulted in a recommendation to revise the oil and gas law,” he said. The Democrats were not worried by the motion as it was only a move by lawmakers in their capacity as individuals, not party members, he said. Of a similar opinion was Taufik Kiemas, the People’s Consultative Assembly (MPR) chairman who also heads the PDI-P advisory committee. He said his party did not initiate the motion even though the vast majority of its supporters were PDI-P lawmakers. Taufik, the husband of PDI-P chairwoman and former President Megawati Sukarnoputri, claimed that the party had chosen not to serve as the opposition in this case. “Golkar initiated the motion, PDI-P is just a follower. I think PDI-P has chosen its stance to balance the government. It’s impossible that we act as opposition. We are dynamic critics,” said Taufik, who became chairman of the MPR with full backing from the Democrats. Gayus Lumbuun, a PDI-P lawmaker, said Taufik was going against strict instructions from Megawati to all PDI-P followers to support the motion. “Ibu Megawati has stated that the PDI-P must become the main actor in unraveling the case,” he said at the House on Friday. Last month, lawmakers disclosed that the Supreme Audit Agency’s preliminary audit — marked “state secret” — had uncovered indications” of criminal activity.

No Law Was Violated In Bank Century Bail Out, Says Attorney General

Attorney General Hendarman Supandji said on Monday that his office had not found any indications of crime in the Rp 6.7 trillion ($710 million) Bank Century bailout case. Hendarman made the statement during a hearing with Commission III of the House of Representatives. He said the Attorney General’s Office (AGO) had investigated 15 witnesses from the Central Bank and Deposit Insurance Agency. “We have not found any indication of law violation,” Hendarman said. However, the conclusion is temporary. The AGO will conclude the Bank Century investigation at the end of its 100-day program in January 2010. Meanwhile, the result of an audit by the Supreme Audit Agency concluded Bank Century is a “failing bank.” The hearing was still ongoing at midday. Hendarman was explaining about the AGO’s investigation into the alleged misuse of power and bribery cases naming KPK officials Bibit Samad Rianto and Chandra M Hamzah as suspects.

Bank Century: Will Indonesia's Top Officials Survive the Fallout?

Economic and political analysts said over the weekend that the Rp 6.7 trillion ($663.3 million) Bank Century bailout controversy would not generate enough political steam to put serious pressure on two of the country’s most senior officials — Vice President-elect Boediono, the former Bank Indonesia governor, and reform icon Sri Mulyani Indrawati, the finance minister and acting chief economics minister. “I don’t think the case is strong enough to have them removed from office. This Century fiasco has been hijacked by a number of political interest groups to attack their track records,” said Adrinof Chaniago, a political analyst at the University of Indonesia. “It is definitely the central bank’s mess if we look into the case closely. That means that Boediono is the one who is primarily responsible, but he won’t go down unless they find he did something illegal,” he said. “I think that some of the central bank’s management will be forced to step aside because of this, but Boediono will remain untouchable.” Poerbaya Yudi Sadewa, an economist at the state-owned Danareksa Institute think tank, said the market’s perceptions of Sri Mulyani and Boediono as reformers remained unchanged, despite the Century imbroglio. “It’s hard to blame them for what they did as the economic crisis was then at its height,” he said. “Century’s failure could have posed a big threat to our financial system, even though the bank’s problems were mainly caused by the bank’s owner.” He agreed with Adrinof that the fiasco would have little chance of seeing Sri Mulyani or Boediono kicked out of office, although he added that the findings of the Supreme Audit Agency (BPK) would have to be published before it became clear what really happened. “Silence on the part of both Boediono and Sri Mulyani is a good tactic to keep the markets calm,” he added. Lawmakers and pressure groups have ratcheted up criticism of the roles played by Boediono, who was BI governor when the bailout took place in November 2008, and Sri Mulyani, who was finance minister. It is alleged that huge amounts of taxpayer funds were spent to save big depositors with the bank, including one of the country’s biggest business families, the Sampoernas, state-owned tin miner PT Timah, and state pension fund PT Jamsostek. Natsir Mansyur, a lawmaker from the Golkar Party and a member of House Commission XI, which oversees the financial sector, urged President Susilo Bambang Yudhoyono on Sunday to suspend Sri Mulyani as finance minister and chairwoman of the Financial System Stability Committee (KSSK), arguing that she was ultimately responsible for the affair. Andi Rachmat, a legislator from the Prosperous Justice Party (PKS), said the House was seeking a Supreme Court clarification as to whether the bailout was legal, although the government has repeatedly stated that it was entirely legal under the Indonesia Deposit Insurance Corporation Law. “We are going to seek the Supreme Court’s opinion on this,” he said. Meanwhile, Danang Widoyoko, the chairman of Indonesia Corruption Watch, insisted on Saturday that the bailout had primarily benefited large-scale depositors. “Big depositors withdrew Rp 5.6 trillion from the bank between December 2008 and July of this year,” Danang said. “They’re the ones who took advantage of the situation.” Iman Sugema, an economist at the Institute for Development of Economics and Finance (Indef), blamed the controversy on Bank Indonesia’s failure to take robust action, rather than endemic weaknesses in the supervisory system. “The bank had problems since 2003 but no firm action was taken by the regulators,” he said. “They claimed the bank was too important to fail, but this is only a small bank. Its assets only account for about 0.05 percent of all the assets in the banking system."

Police Still On Trail of Century’s Millions

Red-faced National Police officials announced on Thursday they had only managed to recover a tiny fraction of the more than $19 million allegedly embezzled by former Bank Century major shareholder Robert Tantular, as concern grew the businessman could get off with a relatively light sentence. National Police Chief Gen. Bambang Hendarso Danuri told a hearing with House of Representatives Commission III on judicial affairs that assets amounting to Rp 1.19 billion ($118,000) had been seized so far. The money, he said, came from several local accounts linked to fraudulent letters of credit issued by Bank Century. Bambang conceded that the recovered amount was tiny considering the losses to the state, but added that investigations were still under way into assets believed to be held overseas. Police suspect that Tantular still has $19.25 million stashed abroad, including in Hong Kong and Britain. Police are also seeking Rp 11.6 trillion is assets belonging to two other major shareholders in the bank — Hasham Al Warraq Thalat and Rafat Ali Rijvi — some of which may have been stolen from Bank Century. A verdict in Tantular’s trial at the Central Jakarta District Court is expected soon, but prosecutors have only recommended a sentence of eight years and fines of Rp 50 billion, less than 1 percent of the Rp 6.7 trillion the government spent bailing out his bank. He could have faced up to 15 years in prison and Rp 200 billion in fines. “I wonder why he was charged with such a weak indictment. It would be easy for him to shake off a [guilty] verdict,” said Drajad Wibiwo, a member of the House’s banking commission. Emerson Yuntho, the deputy chairman of Indonesia Corruption Watch, slammed the prosecution’s recommendation as inadequate for the crime committed, especially as it had threatened the entire banking system. “With our corrupt court system and jails, we are worried that the verdict will not serve as an example to prevent similar cases from taking place,” he said.

Sri Gayatri vs Century Bank

"Sri Gayatri with her Sexy Blue Dress"
"Making a Demo by Selling Fruit at Bank Office"

Sri Gayatri, a businesswoman who lose 67 billion rupiahs or $6 million make a demo again in front of century bank office at Surabaya, East Java. Her action by selling fruit at the bank office last week ago was not the last demo. Yesterday she make a demo again and at this time she painted her face with white color paint then go to the car roof and make her oration there. She said that she will not stop making demos until she get her money back. Because of the Century Bank bankruptcy, the Indonesian Government guarantee its customer money but the Government only guaranteed a fixed deposit and savings but not the mutual fund like where Sri Gayatri invest her money. What if you are Sri Gayatri? Indonesia Today

Century Bank on Trouble

Indonesian Private Bank named Century Bank has a trouble it self. A lot of Cash from it's Customer have been "thrown out" because of the mistake on cash management. Government of Indonesia that is LPS (Lembaga Penjaminan Simpanan) take 100% of Century Bank stock on stock market but LPS cannot guarantee the cash money of Century Bank Customer that have been invested on mutual fund (indonesia: reksadana). Many of customer protested on the Century Bank Office. They blockade that office, angry to the chief but their money cannot be back again. One of the customer, named Sri Gayatri, a woman enterpreneur, loss 67 Billion Rupiahs ($ 6 million), what a lot of money. Indonesia Today