Febriamy Hutapea – President Susilo Bambang Yudhoyono has been accused of attempting a "trick" to legitimize the bailout of PT Bank Century after the fact.
Bambang Soesatyo, a Golkar Party legislator, said Yudhoyono was seeking to revive the Financial System Safety Net (JPSK) bill, which he said had already been rejected by the outgoing House of Representatives in September, by asking for it to be withdrawn.
Bambang said the president's request was a "trick" to protect Finance Minister Sri Mulyani Indrawati and Vice President Boediono from possible charges related to the Bank Century bailout, which cost taxpayers Rp 6.7 trillion ($710 million). "The House should be firm in rejecting the president's request," he said.
In September, the outgoing House rejected a resubmitted draft of the JPSK bill over an article that some lawmakers claimed was covertly inserted by the government to legitimize the Bank Century bailout after the fact.
The JPSK bill essentially covers the emergency regulation in lieu of law, or perppu, issued by the president on Oct. 15, 2008, allowing the establishment of the Financial System Stability Committee (KKSK), a joint committee comprised of top officials from the Ministry of Finance and central bank. Led by the finance minister, the committee was granted the authority to decide whether to bail out troubled financial institutions that threatened the entire financial system. In November 2008, it decided to bail out Bank Century.
Sri Mulyani was quoted in September as saying the decision to bail out Bank Century was based "on the regulation in lieu of law." However, she has also said the bailout was justified by several other government regulations.
Lawmakers had said the resubmitted draft of the JPSK bill included an article that would have made the perppu on financial safety net protocols valid prior to the bill's coming into effect.
Harry Azhar Azis, deputy chairman of the House budgetary commission at the time, said that if the clause had been accepted, the Bank Century bailout "would be fully legitimate."
The confusion over whether the bill was rejected or merely delayed resulted because former House Speaker Agung Laksono had asked the government to resubmit it after it was not endorsed last year.
House Deputy Speaker Priyo Budi Santoso confirmed over the weekend that Yudhoyono last month sent a letter to the House seeking to withdraw the bill, which meant that in the government's view, the House had not yet rejected the bill but had merely delayed debating it.
"We're worried that if we follow the president's request, the bill will still be deemed legitimate," he said.
If the JPSK bill had not been rejected by the House in September, this would have meant that any decision made based on the perppu from the time it was issued until the time it was eventually revoked, which includes the Bank Century bailout, was legal.
Priyo said if the House accepted the president's request to withdraw the bill, it would mean that the House special committee probing the legality of the bailout could be dismissed on the grounds that the bill was still considered legitimate.
"We will announce the [president's] proposal to the plenary session [on Tuesday] and conduct a factional leaders' meeting to decide on our response to the request," Priyo said.