Jakarta – The government is being pressured to reverse its publicly unpopular decision to drop criminal charges against eight former bank owners willing to settle their debts to the state.
In response to public outrage over the decision, observers and politicians are demanding the government proceed with the criminal charges against the former bankers, to avoid creating a public backlash against the state's anticorruption drive.
"The main question here is whether crimes were committed surrounding the debts, which the public strongly suspects," economist Faisal Basri of the University of Indonesia said.
"To clearly answer this, there is no other way but for the government to continue the legal process (against the bankers)." In an announcement last Friday, the government said eight former bank owners could have all criminal charges against them dropped if they repaid their outstanding debts to the state by the end of the year.
The government, via the central bank, disbursed billions of dollars worth of liquidity support to bail out dozens of banks in the wake of the 1997 regional financial crisis. According to the Supreme Audit Agency, a large percentage of the bailout funds was misused by bankers and controlling shareholders in the receiving banks.
The outstanding debts of the eight former bank owners in question total nearly Rp 4.5 trillion (US$493.15 million).
Finance Minister Sri Mulyani Indrawati has requested the debts be repaid in cash or near-cash assets such as bonds, while Attorney General Abdulrahman Saleh said Article 35 of the 2004 Prosecution Service Law allowed the Attorney General's Office to drop a legal case in the interests of the public.
Faisal, however, questioned whether dropping the charges was in the public interest, as well as the significance of the debt repayments themselves.
"Although the amount of the debts cannot be said to be small, it is nothing compared to the hundreds of trillions of rupiah that were disbursed (to bank owners) and lost," he said.
What is really at stake here, Faisal said, is the public's trust and confidence in the legal system.
"This is a stark example of everyone not being equal under the law. So what's the use of President SBY talking all the time about respecting the law?" he said, referring to President Susilo Bambang Yudhoyono. The economist also raised the possibility of political fund-raising considerations being behind the government's decision.
Legislator Dradjad H. Wibowo of the National Mandate Party agreed that the bankers should be prosecuted, raising several questions about the legality of the government's decision.
"In terms of the criminal case, the AGO's decision to drop the case must be supported by underlying regulations, but this would mean the government stepping into the judicial domain.
"Meanwhile, from the point of view of a civil case, the decision is also questionable as the debts must have accrued fines and interest. And according to the 2004 law on state claims, any decision to write off over Rp 100 billion in debts must be approved by both the president and the House of Representatives," he said.