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Lawmakers take final 'toothless' shot at justice
With only weeks to go before their tenure ends on Sept
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ith only weeks to go before their tenure ends on Sept. 30, 29 lawmakers have made a desperate attempt to challenge the government’s “imprudent handling” of the Century Bank debacle.
The lawmakers signed a petition letter on Friday demanding a thorough investigation into the case, which they deemed similar to the situation faced by the Bank Indonesia Liquidity Assistance (BLBI) after the 1998 Asian financial crisis that cost the Indonesian people some Rp 144.7 trillion (US$14.3 billion).
"Given what has happened to Century Bank, this could lead to a BLBI Part II," the petition says.
The letter — sent to the House of Representatives chairpersons, Bank Indonesia executives, the Finance Ministry and the media — points to several instances of so-called imprudent handling, the first being the government’s legal basis for the bailout.
The lawmakers say the government regulation — in lieu of law No. 4/2008 referred to by the government — is no longer valid as the House of Representatives refused to endorse it as a law on Dec. 18, thus all financial bailouts after the designated date are baseless.
The government has so far injected capital into the troubled bank four times to keep it afloat: Rp 2.77 trillion on Nov. 23, Rp 2.2 trillion on Dec. 5, Rp 1.15 trillion on Feb. 3 and Rp 630 billion on July 21.
The central bank argued bailouts carried out after Dec. 18 were based on a memorandum of understanding on a “protocol for assisting ailing banks” circulated by Bank Indonesia (BI) and the Finance Ministry.
The Bank Indonesia Law and the Deposit Insurance Agency (LPS) Law were the legal foundations for the MoU, the central bank said.
BI senior deputy governor Darmin S. Nasution said the MoU was imperative to fill a legal gap as the government and lawmakers were still drafting the financial system safety net bill.
Meanwhile, Finance Minister Sri Mulyani Indrawati said the bailout funds were taken from the LPS coffers, not from the state budget and thus did not require House approval.
Another indication of the government's imprudent handling, the lawmakers say, is the value of the bailout, which more than quadrupled the initial Rp 1.3 trillion bailout proposed to lawmakers late last year.
The lawmakers accuse the government and the central bank of keeping the ballooning bailout cost hidden until it was "accidentally" revealed on Aug. 27, more than a month after the final cash injection was carried out.
“The government only told the House about the first bail out,” said a lawmaker, Effendi Choirie, during a press conference on Friday.
Effendi realizes that the letter, signed by lawmakers from all political parties in the House except for the Democratic Party (PD), would serve only as a toothless initiative on the part of the lawmakers, with the end of their term just weeks away.
Traditionally, a petition letter signed by a minimum of 13 lawmakers is sufficient to start a full fledged House inquiry into any matter.
Effendi urges the next lawmakers, which will mostly consist of PD politicians, to look into the bailout issue seriously in order to prevent further repeats of BLBI-type scandals.
"A bailout such as this is prone to corruption and abuse," he said.
The BLBI scandal revolves around state funds that were disbursed to 48 insolvent banks during the Asian financial crisis. The Supreme Audit Agency (BPK) found that Rp 138 trillion of funds had been misappropriated in the disbursement.
“Investigation into the Century bailout will prove whether the government is really clean,” he said, suspecting the motives behind the bailout involved protecting big depositors whose assets exceeded the maximum Rp 2 billion per individual guaranteed by the government. (mrs)
