Jay Solomon, Jakarta – The $123.5 million secretly transferred out of Bank Bali went into the bank accounts of some of former Indonesian president B.J. Habibie's senior aides, as well as his own political party, and entailed a massive money-laundering effort aimed at hiding numerous beneficiaries, according to a report by auditors PricewaterhouseCoopers (PwC).
The report, commissioned by the Indonesian Government, recommends additional inquiries of the governor of the central bank, the outgoing finance and state enterprises ministers, and a handful of other senior government officials for their alleged involvement in a scandal that helped unseat Dr Habibie last month.
The International Monetary Fund, which is leading a $US43 billion bail-out program for Indonesia, wants the report by the US firm to be published, and is demanding that action be taken against any individual involved in the affair before the agency resumes lending to the country.
The Bank Bali scandal exploded onto Indonesian newspaper front pages in early August, and was cited by Dr Habibie's political opponents as proof that his then ruling Golkar party was trying to influence October's presidential election through "money politics".
The scandal centres on 546 billion rupiah ($123.5 million) that was transferred in June out of the recently nationalised Bank Bali to a finance company run by senior Golkar officials. The transfer was characterised by these officials as a payment for a "debt collection service". Dr Habibie and senior Golkar officials have repeatedly denied any involvement in the transfer of funds out of Bank Bali.
Banking regulators here say the transfer was improper because debt collection services weren't required – after changing its mind, the central bank had said 904 billion rupiah in debts owed to Bank Bali were guaranteed by the government.
The 123-page report says government officials made at least 11 other attempts to collect fees from banks that were attempting to retrieve funds guaranteed by the government. PwC says "the substantial amount of money involved in the government guarantee scheme and the lack of resources of IBRA [Indonesian Bank Restructuring Agency] to examine claims present a high fraud-risk scenario".
The report cites the involvement of members of Dr Habibie's government and political party in a number of meetings related to the transfer. A February 11 meeting, according to the report, included Indonesia's former minister of state enterprises, Mr Tanri Abeng, central bank governor Mr Sjahril Sabirin, and a host of other senior Golkar officials. The topic was how to ensure that the 904 billion rupiah that Bank Bali said it was owed under the debt guarantee program was paid. Previously, officials at Bank Indonesia, the central bank, had said Bank Bali did not qualify for the program.
But at the meeting, a senior aide to Dr Habibie "requested the governor to have Bank Indonesia examine bank claims more closely", reads the PwC report. After the meeting, Bank Indonesia reversed its opinion on whether Bank Bali's debts were guaranteed, and the report said this was an issue of concern.
Mr Sjahril rejected PwC's conclusion that the governor and the central bank might have bent the rules. "On the process of the claim, we have explained this so many times ... there was nothing special done for Bank Bali," Mr Sjahril said.
Mr Tanri could not be reached for comment. Previously, he has said publicly that he did not act improperly in relation to the Bank Bali case. PwC says in its report that its recommendation of further investigations of Mr Sjahril, Mr Tanri and others "must not be construed as expressing an opinion or conclusion about the guilt or innocence" of any individual.
The report also recommends further investigation of the former finance minister, Mr Bambang Subianto, because of his appearance at crucial high-level meetings concerning the case and his failure to take proper administrative actions to stop the payouts. Mr Subianto has denied acting improperly.
Following the 546 billion rupiah payout to the Golkar-linked party, PwC says there was an "explosion" of additional transactions that equated with "money laundering".
Among the recipients of funds were accounts linked to five Golkar officials, a number of Indonesian legislators and the accounts of Golkar itself. Companies linked to Mr Tanri also received funds, as did a senior adviser to Dr Habibie.
A number of payouts also were made to foreign bank accounts, while other transactions involving the funds were made through currency swaps, foreign-exchange transactions and cash withdrawals, says PwC.