Dicky Christanto, Jakarta – Questions to the former police chief of detectives revealed Bank Century bailout funds went to potentially bogus accounts, proving some depositors violated banking laws to conceal ownership of deposits.
A questioning session by the House of Representatives' inquiry committee into last year's Bank Century bailout, which amounted to Rp 6.76 trillion (US$716 million), with Comr. Gen. Susno Duadji also found that Bank Indonesia (BI) should have detected an alleged scam at Bank Century long before its collapse.
The committee summoned Susno as he was the chief of detectives who arrested the bank's owner Robert Tantular upon orders from then vice president Jusuf Kalla.
Based on BI data, the Financial System Stability Committee (KSSK), chaired by Finance Minister Sri Mulyani and then BI governor Boediono, decided on Nov. 21 that Bank Century had failed and could cause a systemic threat to the banking system, and hence it had to be saved.
The Deposit Insurance Corporation (LPS) incrementally pumped a final total of Rp 6.76 trillion into the bank, ballooning from the initially estimated bailout cost of Rp 632 billion.
The three-star general told legislators that the police had obtained all their data about the violations implicating the Century owners two months before the bank collapsed.
Observers say this may strengthen suggestions from previous hearings the central bank had been weak in its banking monitoring or may have deliberately not been transparent about malpractice in Bank Century BI, Susno said, handed over documents needed to investigate the alleged scam to the police only after Robert's arrest.
"BI should have detected the violations earlier as it conducted an audit every three months, right?"
Susno said that the police received information about alleged potential banking law violations involving its owners, including fictitious credits, non-performing loans and loans lacking collateral before 2008, but without solid proof.
He said that when he went to BI to ask for cooperation to arrest Robert, BI officials said they did not have proof of any crimes. Anyway, he said, the police arrested Robert, who was sent to prison for five years.
Susno said BI withheld documents fearing police officers' investigation into the bank scandal would cause panic among customers.
When asked if BI had deliberately let the crime occur, Susno refused to comment. "I cannot answer whether they [BI officials] knew about the scandal or not."
On the channeling of funds, Susno told legislators that National Police detectives found in their investigation that, for example, funds went to a taxi driver in Ciputat in South Tangerang and an automotive repair shop keeper in Makassar.
The driver received Rp 24 billion and the businessman Rp 33 billion out of bailout funds totaling Rp 6.76 trillion.
"Yes, that's correct. But we could not classify the transfers as a banking crime as it would need a thorough investigation to find out where the money came from," Susno said.
"How come a driver owns Rp 24 billion and an automotive repair shop owner gets Rp 33 billion?"
He said he had not dug deeper into the case as he was replaced by Comr. Gen. Ito Sumardi. Susno added the committee could ask the two to explain the transfers.
Some lawmakers raised suspicions the bank could have been used to launder money, with big depositors deliberately using other people's names to break down their deposits into smaller amounts to avoid suspicions and become eligible for deposit guarantee protection. The state had issued a guarantee as a response to the global crisis to cover all bank deposits up to Rp 2 billion should any bank fail.