Ardian Wibisono & Nivell Rayda – Flexing its muscles ahead of the expected return of its two suspended deputies, the Corruption Eradication Commission has begun examining the central government's bailout of PT Bank Century, its chairman revealed on Monday.
The commission, also known as the KPK, had received a copy of the Supreme Audit Agency's (BPK) report on the controversial Rp 6.7 trillion ($710 million) bailout, which KPK Chairman Tumpak Hatorangan Panggabean said was "a much-needed weapon for the KPK to begin analyzing the Century scandal."
"We have already assigned a special team to analyze the 500-page report," he said. "We will soon decide if there is enough evidence to proceed to the next level of investigation."
Politicians and anticorruption activists have urged the KPK to take over the bailout investigation, amid widespread but unproven rumors that some of the funds had gone missing. The BPK released a damning report last week saying that as much as 40 percent of the approved bailout funds were effectively illegal, and cited other serious wrongdoing that it said needed to be investigated more thoroughly.
But the BPK's failure to trace the rescue funds prompted some in the House of Representatives to push for their own inquiry. The move came amid accusations that some of the funds were diverted to other uses, allegedly including President Susilo Bambang Yudhoyono's re-election campaign. The president has flatly denied the allegations and welcomed an investigation.
On Monday, members of Indonesia Corruption Watch said the KPK was legally justified in investigating the bailout because the BPK report had indicated corrupt practices. The group said a police probe only dealt with banking crimes committed by Bank Century's major shareholders.
ICW coordinator Danang Widoyoko said during a news conference that the BPK audit report revealed Bank Century's money-transfer system was not fully connected to that of the central bank, creating a loophole for possible embezzlement.
"We urged the KPK to immediately handle the matter since the final report from the BPK has provided some clarity to the Bank Century case," he said.
"Although the report has not revealed all the information, such as who benefited from the bailout money, it is sufficient to show early indications of corruption and banking crimes with the involvement of banking supervisory authorities, the government and the bank owner."
Danang said the central bank might also have abused its authority by lowering its criteria on minimum capital-adequacy ratio so Bank Century could receive short-term liquidity on Nov. 14, 2008. In addition, he said the Deposit Insurance Agency (LPS) revised its regulations to allow the bank to use bailout money to pay its customers' maturing time deposits.
After the bank was bailed out, depositors withdrew Rp 4.3 trillion from Nov. 21, 2008, to late December, mostly from maturing time deposits of greater value than the Rp 2 billion LPS guarantee.
The remaining question from the audit is who benefited from the bailout, and that would be the KPK's job to find out," Danang said.