The Financial Transaction Report and Analysis Center (PPATK) should make available to the House of Representatives, which will inquire into the Bank Century scandal, a more comprehensive chart of the fund flow from the bank.
Only by knowing the flow of funds (certainly limited to big accounts holding more than Rp 2 billion or about US$200,000), can the House verify the motives for the alleged policy irregularities and misappropriation of the $676 million bailout funds.
The motives will help investigators from the House and the anticorruption commission (KPK) to assess whether there was strong evidence of the abuse of authority, policy compromises and other banking crimes related to the bailout process.
Given the mountain of work required to trace the transactions, certainly the chart of fund flows financial intelligence unit PPATK will draw, should only cover the period between November 2008 and Feb. 2, 2009, when the bulk of the bailout funds were disbursed.
The investigative audit by the Supreme Audit Agency has uncovered strong indications of policy incompetence, fraud, irregularities, the questionable withdrawal of huge sums of deposit and suspicious transactions involving a number of Bank Century’s big customers and undue preferential treatment of certain customers between November 2008 and July 2009.
These findings certainly have weakened the arguments by both Boediono, then governor of the central bank, and Finance Minister Sri Mulyani Indrawati, who have defended the bank rescue as necessary to prevent a worse banking crisis, because the financial sector was then quite fragile due to the impact of the global financial crisis.
They cited the crash of the Jakarta stock market in mid-October, the rupiah turmoil, the severe liquidity problems at many banks between September and December 2008 and the virtual stoppage of the inter-bank market.
However, without knowing the motives for the various “sins” decision makers reportedly involved in the bailout process committed, the controversy over whether Bank Century (Bank Mutiara) posed systemic risks to the banking industry, and therefore entitled to be bailed out, will only lead to endless debates.
The problem is that critics tend to see the bailout process from the perspective of the current condition. But it is extremely difficult now to relive the emergency situation between October and November last year and the severe time pressure that Boediono, Sri Mulyani and their team had faced then in making a decision.
Even if the House inquiry eventually ends with a political compromise between the government and all the parties in parliament, the controversy regarding the scandal may never be resolved. The rumors and allegations on the misuse of the bailout funds and the fund recipients will continue to haunt the government, dominate the mass media and consume national attention, unless the questions around the fund flow were cleared.
The government and the House need to resolve the Bank Century scandal with utmost urgency, otherwise the debacle will continue to consume the nation and mass media at the expense of the political and macroeconomic stability and consequently the national campaign against poverty.
