Jay Solomon, Jakarta – An investigation into a politically charged banking scandal here has uncovered "numerous" indications of fraud, as well as the transfer of millions of dollars to senior Indonesian officials and politically connected individuals, an audit by the US accounting firm PricewaterhouseCoopers says.

The report also says Bank Indonesia, the country's central bank, failed to cooperate sufficiently with the investigation. The International Monetary Fund and World Bank, which are leading a $43 billion bailout package for Indonesia, have stated they won't release new funds to the country until the financial scandal is satisfactorily resolved.

Indonesia's financial markets were roiled last month by banking regulators' reports that 546 billion rupiah ($66.6 million) was siphoned out of the recently nationalized Bank Bali to a company linked to President B.J. Habibie's ruling Golkar party. The company, PT Era Giat Prima, is headed by Golkar's vice treasurer, who contends the funds were earned through a legal "debt collection" service. Golkar Chairman Akbar Tanjung, meanwhile, said none of the money was transferred into the party's coffers.

Indicators of fraud

The Pricewaterhouse audit, which was commissioned by the Indonesian government and the IMF, however, stated the two-week investigation "uncovered numerous indicators of fraud, noncompliance, irregularity, misappropriation, undue preferential treatment, concealment, bribery, and corruption" in the transaction, despite being granted only "limited access to information." In particular, the report highlights how rules governing Indonesia's loan-guarantee program had been breached by government officials in the Bank Bali case. Under the program, the government is obligated to repay all loans owed by shuttered Indonesian banks to third parties, in this case Bank Bali. But the report highlights that senior members of the Indonesian government assisted in channeling the funds to the Golkar-linked party.

Pricewaterhouse says Indonesia's loan-guarantee program, because of the government's lack of resources, offers "a high fraud risk scenario."

Pricewaterhouse also says it made every attempt to trace the 546 billion rupiah, as required by the IMF and Indonesian government, in its audit. Opposition parties have charged that senior members of Golkar were attempting to use the funds to boost Mr. Habibie's hopes of re-election in November – an accusation that party denies. Golkar also says officials involved returned the 546 billion rupiah they received to Bank Bali.

Funds to more than 100 accounts

Pricewaterhouse states, however, that its audit uncovered that the Golkar-linked company transferred the funds to more than 100 accounts. Among these included "senior public officials and senior political party members." It also said the sources who returned the entire 546 billion rupiah were "not identical" to those who received them.

Umar Juoro, a senior economic adviser to Mr. Habibie, who has yet to see the audit, says the government will continue to push through the probe regardless of how sensitive it is.

In an interview in Auckland, New Zealand, Indonesia's top economic minister, Ginandjar Kartasasmita, voiced the same view. "We will go down to the bottom of it, and take necessary action to rectify the problem" at Bank Bali, he said.

A vice chairman of Golkar, Marzuki Darusman, said his party couldn't yet comment on the audit. He and other members of Golkar have threatened to dump Mr. Habibie as the party's presidential candidate in November if the Bank Bali affair wasn't resolved.