Rendi A. Witular and Erwida Maulia, Jakarta – The much-awaited Supreme Audit Agency (BPK) investigative audit on the controversial bailout of Bank Century has cornered Vice President Boediono more than any other official involved.
Echoing the widely circulating analysis on the crucial role of Boediono, who was Bank Indonesia (BI) governor during the bailout, the BPK audit indicated a deliberate cover-up of Bank Century misappropriations and frauds by BI in order for the bank to justify the financially needed lifeline.
"There's an intentional attempt [by BI] to create the circumstances in which the government is forced to agree on the bailout," said BPK chairman Hadi Poernomo when submitting the audit to lawmakers on Monday.
"This attempt is based on providing insufficient and misleading inputs for the government during a meeting to salvage the bank," said Hadi, who is a former tax chief under Boediono's tenure as finance minister between 2002 and 2004.
The audit apparently focuses most of the blame on Boediono and BI for pursuing the reckless bailout, which may potentially cause losses to the state following the indications of fraud and irregularities kept hidden from the public by BI.
According to the BPK, around 91 percent of the Rp 6.67 trillion (US$710 million) injected into ailing Bank Century, which has now changed its name to Bank Mutiara, was aimed at covering losses stemming from fraud and irregularities committed by shareholders.
The BPK questions the judgement of BI in dubbing Bank Century a failed bank presenting a potential systemic risk to the financial system.
According to the audit, BI has failed to provide a measurable definition or benchmark to substantiate the use of the term 'systemic threat', and used its own judgement and speculation to determine the future risk of letting Bank Century fold.
The BPK audit was made at the request of the House of Representatives over lingering doubts about irregularities in the bailout decision.
There is also suspicion among House members over the possible existence of large campaign fund deposited in the bank, belonging to the inner-circle of President Susilo Bambang Yudhoyono, which may helped to motivate the rescue.
A rescue attempt was necessary for big depositors because the government only guarantees deposits worth a maximum of Rp 2 billion. However, the audit has failed to clarify such suspicions as it has merely set up a blame game for BI.
The audit has not included the records of funds flowing out of Bank Century after the bailout, and the names of big depositors benefitting from the bailout decision. Critics have said such information is crucially needed to remove once and for all speculation as to any possible massive campaign fund in Bank Century.
Hadi argued the BPK was not authorized to track the flow of the money out of Bank Century and to cite the name of the depositors because this was the sole authority of the Financial Transaction Reporting Supervision Agency (PPATK).
The PPATK has actually submitted its preliminary findings on the flow of the bailout funds to the BPK. However, the findings are not for public release.
Lawmaker Mukhamad Misbakhun, who is a member of the House inquiry team on Bank Century bailout, expressed his dissatisfaction with the audit which failed to clarify the position on suspicious depositors and the flow of bailout funds.
"The audit is mostly blaming Boediono and BI. I hope they are not putting [him] on the sacrificial table at the end of the day just to save the big guys," said Misbakhun of the Justice and Prosperous Party.
During Monday's appearance to respond to the BPK audit, Yudhoyono repeated his denial that his inner-circle had ever taken advantage of the bailout. He said the audit should be seen and judged given the circumstances at that time were not "normal".
"The policy taken was aimed at preventing a crisis in the banking system and in the economy in general at a time when we were dealing with preventing impacts from the global financial crisis," he said.
He also said he was overseas when the bailout decision was taken, but he strongly believed BI and the Finance Ministry had taken the right decision.
Boediono has also denied earlier any wrongdoing, saying the bailout was based on sound and accountable judgement. (bbs)