Arientha Primanita &Markus Junianto Sihaloho
The State Palace has denied claims by former antigraft czar Antasari Azhar that President Susilo Bambang Yudhoyono led a high-level meeting in October 2008 to discuss a bailout plan for Bank Century the following month.
Presidential spokesman Julian Aldrin Pasha said on Friday that the claims made by Antasari on national television a day earlier were groundless.
“It’s not true that the president invited Antasari, the head of the KPK [Corruption Eradication Commission] at the time, to discuss how to handle the Century bailout,” he said.
He added that the only meeting at the palace around that time involving Antasari was to discuss potential corruption in the wake of the global economic crisis.
In an interview on Metro TV on Thursday evening, Antasari, currently in prison for the murder of businessman Nasrudin Zulkarnaen, said he was invited by Yudhoyono to discuss how to proceed with the bailout, because of the government’s concerns about the legal ramifications.
He said others attending the meeting included Finance Minister Sri Mulyani Indrawati, Bank Indonesia Governor Boediono, National Police Chief Gen. Bambang Hendarso Danuri and Attorney General Hendarman Supandji. All those officials have since been replaced.
In November, the government injected Rp 2.7 trillion ($286 million) into the ailing Bank Century. By July 2009, it had spent Rp 6.7 trillion bailing out the lender.
Antasari’s claim has caused a sensation because of the implication that Yudhoyono knew of the potential fallout from the bailout but still proceeded with it.
The bailout was denounced from the beginning by legislators, who argued that it was both unjustified and overpriced.
In 2010, the House of Representatives voted to adopt a resolution that the bailout was flawed, prompting the KPK, the Attorney General’s Office and the police to launch parallel lines of inquiry into possible violations in the bailout and subsequent flow of money.
To date, though, law enforcement agencies have failed to unearth any signs of corruption. Banking violations have been found, for which bank owners Robert Tantular, Hesham al Warraq and Rafat Ali Rizvi were convicted, but those offenses occurred prior to the bailout.
The House resolution almost led to steps to impeach Boediono, who became vice president in 2009, while the political pressure was blamed for Sri Mulyani resigning as finance minister in May 2010.
In the wake of the bailout, speculation was also rife that the government stepped in to help the mid-sized lender because a number of Yudhoyono’s benefactors stood to lose huge sums if the bank folded.
The president acknowledged that the bailout came at a “high political cost” but was also quick to defended his administration for going forward with it.
“Channeling bailout funds of around $600 million to Bank Century had a very high political cost,” he said on Friday. “But if we did not take action immediately to resolve the crisis, in a year it would have turned into an even bigger problem.”
He warned that if the bank had collapsed, it would have posed a systemic threat to the rest of the country’s banking sector that could have seen it crumble in a repeat of the 1997-98 Asian financial crisis. It was something he was trying to avoid at all costs, he said.
He added that he believed that his administration had handled the Bank Century case appropriately.
Legislators on the House team monitoring the ongoing probes into the bailout say Antasari’s claims are plausible.
Bambang Soesatyo, a Golkar Party member of the team, said the revelation pointed to a cover-up by the palace, which he said had long claimed ignorance about the policies underlying the bailout.
“There have been too many lies covering this scandal,” Bambang said.
Ahmad Yani, from the United Development Party (PPP), said the revelation could prove to be Indonesia’s “Watergate moment.” “If it turns out to be true, there should be an initiative to resign and a legal investigation must follow,” he said.