Sri Mulyani Being Quizzed on Bank Century Scandal: KPK

Former Finance Minister Sri Mulyani Indrawati. (EPA Photo/Bagus Indahono)

Former Finance Minister Sri Mulyani Indrawati. (EPA Photo/Bagus Indahono)

Antigraft investigators have been questioning Sri Mulyani Indrawati, a former finance minister, since Tuesday as part of a probe into the controversial 2008 bailout of Bank Century, an official revealed on Thursday.

Bambang Widjojanto, a deputy chairman of the Corruption Eradication Commission (KPK), said that a team of investigators sent to Washington, D.C., where Sri Mulyani is based as a managing director of the World Bank, had interviewed her on Tuesday and Wednesday, and would hold a final questioning session today.

“We’ve scheduled the questioning over a period of three days, but it hasn’t concluded yet so we don’t know what the results are yet,” he said at the KPK office in South Jakarta.

Bambang added that Sri Mulyani was being probed over role in authorizing the Rp 6.7 trillion ($690 million) bailout of the mid-sized Bank Century, which the House of Representatives has decreed was unwarranted and rife with irregularities.

The House has since set up a committee to monitor parallel criminal investigations being conducted by the KPK, the police and the Attorney General’s Office into the process leading up to the bailout, its implementation, and the events that followed.

Critics deemed the money spent on salvaging the lender was far higher than the amount initially deemed necessary to prevent its collapse, and that some of the bailout money was allegedly siphoned off by well-connected depositors.

Bambang said that for now, the KPK was trying to determine whether any of the officials in charge of the bailout policy had abused their authority.

“Sri Mulyani was the finance minister at the time, so she had the authority, and it’s the extent of that authority, in the context of the bailout, that we’re trying to determine,” he said.

He added that the KPK team would also question Wimboh Santoso, Bank Indonesia’s chief representative in New York. At the time of the bailout, Wimboh was the head of the central bank’s financial system stability bureau.

Bambang also said that the KPK could schedule another questioning of Vice President Boediono, who was the central bank governor during the bailout.

“Later on, if the investigators need to question other officials, including Boediono, those individuals will certainly be called in,” he said.

The House team monitoring the Century probes also plans to summon the vice president to testify in the case, amid indications that he ignored a recommendation to allow the bank to fold.

According to a Bank Indonesia document, Boediono instructed three BI officials in November 2008 to issue a short-term loan facility for the ailing Century.

The instruction came after Zainal Abidin, BI’s director of supervision, sent a letter to Boediono at the end of October informing him that Century was not eligible to receive the loan facility because its capital adequacy ratio was below the minimum 8 percent.