Suspicion but No Smoking Gun in Bank Century Probe

By webadmin on 12:56 am Feb 18, 2010
Category Archive

Febriamy Hutapea

In what could be the beginning of the end of the politically charged Bank Century probe, lawmakers have conceded that there is no evidence that money from the state bailout was illegally funneled to the campaign team of President Susilo Bambang Yudhoyono.

All of the nine factions on the House of Representatives special committee agreed on Wednesday that there were suspicious and possibly fraudulent transactions during the bailout period beginning in November 2008 and evidence of money laundering. They all then said they lacked the expertise to do more and called on the National Police and Corruption Eradication Commission (KPK) to take over.

While the House committee has yet to announce its final conclusions on the legality of the central government’s Rp 6.7 trillion ($710 million) bailout, the absence of a “smoking gun” proving that money was embezzled by the president’s inner circle prompted lawmakers to begin softening their tone, observers said. Last week, seven political parties had lined up against Yudhoyono, saying in their preliminary conclusions that the bailout was illegal and mired in corruption.

Lawmakers’ calls on Wednesday for the police and antigraft agency to take the lead, with some even shifting the blame onto Bank Century’s former owners, appear to be designed to allow them to begin washing their hands of the entire affair.

“There are systematic irregularities and data manipulation. We ask the legal authorities to move quickly on the banking fraud that allegedly was conducted by Bank Century’s owners, or anyone else who had been involved in the case,” Ahmad Yani, a spokesman for the United Development Party (PPP), said during Wednesday’s committee meeting.

The PPP, Golkar Party, Prosperous Justice Party (PKS) and the National Awakening Party (PKB), all member of Yudhoyono’s governing coalition, joined the opposition Indonesian Democratic Party of Struggle (PDI-P) and Great Indonesia Movement Party (Gerindra) in concluding that bailout funds were channeled for illegal purposes.

Both PPP and PDI-P lawmakers highlighted 1,427 Bank Century accounts that had active transactions and moved bailout money even after services were suspended because the lender was under special surveillance by Bank Indonesia starting on Nov. 6, 2008.

“We learned about an amount of money that transferred from Bank Century into the [accounts of] unauthorized names, and concluded that Bank Indonesia did not conduct close supervision of Bank Century,” Ahmad said.

PDI-P lawmaker Hendrawan Supratikno said efforts to accurately trace the money trail of the bailout funds was a complicated task, and therefore the National Police, KPK or the Financial Transaction Reports and Analysis Center (PPATK) should take over.
However, the police closed its case months ago. The KPK continues to quietly investigate the matter.

Lawmakers said they found irregularities in the shifting of funds between Bank Century accounts during recent field visits to five regions, including a well-publicized account belonging to Amiruddin Rustan, the owner of a Makassar auto repair shop, who claimed to be unaware of a deposit of Rp 10 billion into his account.

The PPATK said Amiruddin’s account received 33 checks for Rp 2 billion each after the bailout money was disbursed in late November 2008.

On Feb. 2, 2009, the National Police blocked the account, which held Rp 24 billion. However, the PPATK found that Rp 10 billion was withdrawn in three separate transactions even after the assets were frozen.

Golkar, which has aggressively pursued the investigation, much to the chagrin of Yudhoyono and the Democrats, joined the PKS and Gerindra in claiming that the state suffered financial losses due to the bailout. “So there must be legal consequences,” special committee member Ade Komarudin of Golkar said.

The Committee’s Findings and Recommendations

Finding 1 Several suspicious and fraudulent transactions at Bank Century occurred during the bailout period
Found by: All parties

Finding 2
Bank Century management abused its power and violated banking regulations
Found by: All parties

Finding
3
Bank Century’s board of directors colluded with depositors to create
new accounts to have them “reimbursed” by Deposit Insurance Agency
(LPS)
Found by: All parties

Finding 4
There was evidence of money laundering
Found by: All parties

Finding 5
The Century bailout led to state losses
Found by: Golkar, PKS and Gerindra

Finding 6
There were indications that the bailout funds were illegally channeled to other purposes
Found by: PKS, Gerindra, PPP, PKB, Golkar and PDI-P

Finding 7
The trail of money revealed evidence that corruption had taken place
Found by: PPP and PDI-P

Recommendation
1
Thorough investigations are needed by the Corruption Eradication
Commission (KPK) and National Police to shed light on suspicious
transactions and banking crimes
Recommended by: All parties

Recommendation 2
Former members of Bank Century’s management now at Bank Mutiara should be removed
Recommended by: Golkar and Hanura

Recommendation
3
A comprehensive public audit of the Bank Century bailout and
subsequent transactions is needed by an independent international
accounting firm
Recommended by: Golkar and Hanura


From the House hearing