BI officials 'violated' regulation

Irawaty Wardany ,  The Jakarta Post ,  Jakarta   |  Tue, 09/16/2008 10:23 AM  |  National

A state institution like Bank Indonesia cannot not divide its assets without approval from the finance minister, president or the House of Representatives, a court heard Monday.

"If a state institution establishes a foundation and regularly donates to it, then it needs permission from the owner or the founder in the event of assets division," Siswo Suyanto, a state financial law expert from the Finance Ministry testified at the Corruption Court.

He was presented to the court by prosecutors in the case of the BI scandal, for which former BI legal bureau head Oey Hoey Tiong and suspended BI Surabaya office chief Rusli Simanjuntak are standing trial.

The two are charged with misusing Rp 100 billion in BI's Banking Development Foundation (YPPI) funds to provide lawyers for a number of former BI officials implicated in alleged embezzlement of BI Liquidity Support (BLBI) funds. About Rp 31.05 billion of the funds went to House legislators to expedite settlement of the BLBI scandal and amendment of the BI law.

Former BI governor Burhanuddin Abdullah is being tried separately in the same case.

The Corruption Court is also hearing the bribery case of Golkar politicians Hamka Yandhu and Antony Zeidra Abidin, who are accused of receiving money from BI officials.

"Is money that has been given to the foundation still considered a state asset?" presiding judge Moefri asked Siswo.

"Yes. If we follow the rule of law, a state institution requires permission from the government to channel its money to a foundation," Siswo said.

"Above a certain amount, there has to be permission from the finance minister, the president and the House."

When asked about the status of the foundation's assets, Siswo said the transfer of management of the money did not affect the state's ownership.

He insisted BI could only hand over its assets to another corporate body with the approval of the finance minister, president and House.

When the judge asked whether BI was allowed to receive money from another corporate body, Siswo said such a reception was permissible but must be recorded in BI's financial reports, otherwise it would violate the 2003 Law on State Budgets.

"All income and expenses should be recorded in BI's financial reports," he said.

Novi Gregorious Valentahu, an auditor at the Supreme Audit Agency (BPK) and fellow witness, confirmed Siswo's views, saying all expenses should be recorded both in BI's financial reports and the foundation's report.

Novi said YPPI's assets were part of the state budget, adding that when BI used the foundation's funds, there was no record of it, either in the form of debt letters or any note that could prove the money ever existed.

"The money was just taken away with no accountability or records," he said.

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