FORMER KPK CHIEF'S TESTIMONY COULD PROVE TO BE EMPTY BLOW

by Andi Abdussalam

Jakarta, Aug 13 (ANTARA) - The allegations made by Antasari Azhar, the former head of the Corruption Eradication Commission (KPK), about the state palace's role in the controversial Rp6.7 trillion bailout for Bank Century, will only serve as dummy ammunition if he does not provide concrete evidence to back up his claims.         "This testimony is not enough if he doesn't have concrete evidence such as a recording of the discussion that took place during that meeting. He has to have concrete evidence," Burhanuddin Muhtadi, a political observer at the Indonesian Survey Institute (LSI) said.          The former chief of the anti-graft agency, who is currently serving a jail term for murder, had said earlier that as KPK chief he was invited by President Susilo Bambang Yudhoyono to the state palace to discuss the controversial bailout, which was allegedly aimed at setting aside state funds for financing political campaigns before the 2009 elections.          However, Muhtadi reiterated that Azhar's testimony, which was recently broadcast by a private television station, will not have a huge impact because his testimony is verbal and lacking any tangible evidence.          "The public is of course looking forward to hearing more from Azhar, but if he makes a similar statement again without evidence, it will be the equivalent of an empty blow," he said.          The initial claims made by the former chief of KPK were trumpeted by outspoken lawmaker Bambang Soesatyo Bambang, who said that Azhar would unveil 'new facts' about Bank Century's bailout scandal. At the time, Azhar not only confirmed the palace's involvement in the rescuing the ailing bank, but also spoke about attempts to keep the facts of the case hidden from the general public.          "With these new facts revealed by Antasari Azhar, the palace's claim that it was unaware of the bank bailout taking place has been proved false," Bambang, who is also a member of the supervising team investigating the circumstances of the Bank Century bailout, said.          He added that Azhar's testimony has also confirmed that it was President Susilo Bambang Yudhoyono who sought to cover up the facts of the case.          However, the ruling Democratic Party (PD) sees Azhar's testimony and Bambang's response as an attempt to renew interest in the controversial Bank Century bailout scandal.          Syarief Hasan, a member of the Democratic Party's advisory board, termed the effort to reopen a discussion on the specifics of the Bank Century bailout case as a wasteful exercise.          The case is already being pursued via legal channels by the anti-graft agency, Hasan said.          He added that several members of the Golkar Party have tried to refocus the spotlight on the case, in order to embarrass President Yudhoyono, but the political maneuver is unlikely to affect his image.          "This attempt by Golkar Party cadres, which include Bambang Soesatyo is a waste of energy," Hasan said. The Indonesian people are also tired of hearing this baseless allegation, he added.          The case dates back to late 2008 when a financially crunched Bank Century started facing liquidity and default problems. It collapsed after liquidity assets worth Rp11.6 trillion were withdrawn, through its security firm Antaboga Delta Sekuritas, and allegedly stashed abroad by its owner Robert Tantular.          The ailing bank was then taken over by the Deposit Insurance Agency (LPS). It was later bailed out by the government with an alleged Rp6.7 trillion issued through a short-term funding facility (FPJP) and temporary capital participation (PMS).          This amount was much higher than the Rp1.3 trillion discussed with the House of Representatives (DPR), sparking public criticism and questions about the disbursement of public funds without the DPR's approval.          In its 2009 audit report, the State Audit Board (BPK) said it suspected that efforts had been made to engineer additional bailout funds (PMS) for the bank.          While handing over his October 2009 report to the DPR, BPK chairman Hadi Poernomo said that he too has encountered gross violations in the way the Bank Century bailout was handled. The violations particularly related to the bank's merger process and its supervision by the country's central bank -- Bank Indonesia (BI).          He said these violations also include naming Bank Century as a failed bank that would negatively impact the country's banking system, the use of FPJP funds and interim capital or bailout funds, as well as overlooking the bank management's flawed business practices.          The investigative audit report also hints at the suspicious efforts made to raise the original bailout amount, which was initially estimated at between Rp632 billion and Rp1.3 trillion, but was later raised to Rp6.7 trillion without consulting the DPR.          "The Rp6.7 trillion bailout funds were disbursed in four stages. The disbursement of the second phase worth Rp2.2 trillion was done without consulting the Coordination Committee (KK), which is against the LPS regulation No. 3/PLPS/2008," Poernomo said after handing over the audit report to House Speaker Marzuki Alie.          After all, the Rp5.86 trillion loss suffered by Bank Century was a result of the bank's unethical business practices and violations committed by the bank's executives and other parties, he added.          A House Inquiry Committee confirmed later that violations had been committed during the issuance of the FPJP and PMS amounting to the Rp6.7 trillion.          The House of Representatives (DPR), in a plenary meeting in April 2010, transferred the case to the government for its investigation while the House formed a team to monitor the progress of the investigation.          Yet, no decision has been made so far with regard to the investigation by the government.          Bambang also quoted from Azhar's testimony, which alleges that in addition to the former KPK chief, a number of cabinet ministers and other high ranking state officials were present at the meeting in the state palace, which was called to discuss the scandal.         Andi Arief, a member of the President's special staff denied on Friday the statement made by Azhar on a private television channel. He categorically denied that President Yudhoyono had chaired a meeting to discuss the disbursement of Rp6.7 trillion for a bailout in October 2008.         Arief said that the president invited the KPK, police chief and the attorney general for a meeting on October 9, 2008 to discuss legal enforcement measures needed to safeguard the economy, particularly against economic players who had been violating capital market regulations.          Meanwhile, President Yudhoyono said Friday that the bailout of Bank Century in 2008, which is now known as Bank Mutiara, was carried out at a political cost in order to save the country's economy.          "If the government had not moved to quickly salvage the unhealthy bank in 2008, the economic crisis from 10 years ago might have hit Indonesia again," Yudhoyono said.          Nonetheless, the government has paid a high political cost for disbursing Rp6.7 trillion or US $730.08 million to bail out the troubled bank.          "The bailout has proved to be so expensive that the government has had to deal with the problem for the last one year," the president said.           However the president said the decision to bail out the bank was taken when he was abroad. It was the Financial System Stability Committee (KSSK) chief (then finance minister Sri Mulyani), who had the authority to decide the policy.       Presidential Spokesman Julian Aldrian Pasha the policy to bail out the bank was taken by the central bank (Bank Indonesia) and the KSSK.          Muhtadi pointed out that Azhar's recent testimony can also be used by other political parties to bargain with the President Yudhoyono, adding that House members have always used Bank Century for political gain against the government.          He added that the information revealed by Azhar¿s testimony can also be followed up by the KPK.          "The KPK has the moral responsibility to investigate the testimony and seek further explanations from Azhar, including the names of other people involved," Muhtadi said. ***1*** (T.A014/INE/KR-BSR/A/A014) 13-08-2012 20:0