Heru Andriyanto & Armando Siahaan – After surviving criticism from the public and lawmakers over his part in approving the Bank Century bailout, Vice President Boediono was accused on Thursday of helping channel Rp 147.7 trillion ($16.2 billion) in state funds to rescue banks during the 1997-98 Asian financial crisis. The economy was plunged into further chaos when nearly all the money vanished.
Former Finance Minister Fuad Bawazier told the South Jakarta District Court on Thursday that Boediono, who served as a senior official at the central bank during the massive bailouts of 1997-98, must be held accountable.
"As the director of banking analysis at Bank Indonesia, Boediono was responsible for channeling the credit which later turned into bad loans and caused the banking crisis," Fuad said in a hearing held at the request of the Indonesian Anti-Corruption Society (Maki).
Fuad is now a key official in the opposition People's Conscience Party (Hanura), which was one of the six House of Representatives factions that voted that the Bank Century bailout in 2008 was illegal.
Fuad, who served under the Suharto regime, claimed he had strongly opposed the bailout policy in the 1990s because he believed the government should never bear the debts of the private sector.
Most of the bailout funds disappeared due to the absence of sufficient measures to verify if the recipients were capable of repaying, he said, citing an example of the huge sum injected to Bank Dagang Nasional Indonesia, owned by tycoon Sjamsul Nursalim, whom Faud claimed had a bad reputation.
"After the funds were injected, they were taken away by [Sjamsul] and as a result the credit turned into a debt the state had to shoulder," said Fuad.
Boediono was dismissed by President Suharto after the failure of the Bank Indonesia Liquidity Assistance (BLBI) bailout program, Fuad claimed.
Maki chairman Boyamin Saiman said he filed the legal motion to link Boediono to the bailout disaster because the Attorney General's Office had never investigated the vice president over the matter.
"The then central bank governor [Soedradjad Djiwandono] was once named as a suspect for the case, so why wasn't Boediono?" Boyamin told reporters.
He argued that at the graft trial of former BI senior officials Hendrobudiyanto, Heru Supraptomo and Paul Soetopo, the indictment mentioned the alleged role by Boediono in the infamous bailout scandal. Maki is also seeking graft charges against former Bank Indonesia officials Haryono and Muklis Rasyid, Boyamin said.
The accusations come two days after President Susilo Bambang Yudhoyono ordered the Judicial Mafia Eradication Task Force to examine the handling of the BLBI case because it could still cause further state losses.
Bank Indonesia extended BLBI funds to banks in dire need of liquidity problems during the monetary crisis in 1998. The rescue was based on an agreement between the state and the International Monetary Fund. In December 1998, the central bank extended Rp 147.7 trillion in BLBI funds to 48 banks.
The case broke following an audit by the Supreme Audit Agency (BPK) into the use of the BLBI funds, which indicated that Rp 138 trillion of the total disbursed had been misappropriated.
Maki has been critical of the vice president. It previously filed a motion to the same court seeking an order for the AGO to name Boediono and Finance Minister Sri Mulyani Indrawati as suspects in the Bank Century scandal, but the request was turned down.
It has also twice sued the Corruption Eradication Commission (KPK) for "attempting to drop the Bank Century case." The South Jakarta District Court rejected both suits.
[Additional reporting from Antara.]