The Corruption Eradication Commission (KPK) says it will probe how and why the decision to bail out Bank Century was made and to whom the bailout money was channeled.
"We will *investigate* the pre-bailout phase, policy making and post-bailout stage," KPK Deputy Chairman on Enforcement Chandra M. Hamzah said after his reinstatement ceremony at KPK headquarters in Kuningan, South Jakarta, on Tuesday.
He said, however, he had not yet determined what kind of corruption took place in every phase of the case and that they still needed to evaluate the Supreme Audit Agency's (BPK) report into the scandal.
Chandra's fellow deputy chairman, Bibit Samad Rianto, confirmed that if they found any indication of corruption in the Bank Century case they would pursue legal action.
The Bank Century bailout scandal revolves around the government's decision to save the ailing bank from collapsing in November 2008.
The government and Bank Indonesia, grouped together under the Committee for Financial Sector Stability (KSSK), decided on Nov. 21 to bail out Bank Century based on fears that its collapse, at the peak of the global financial crisis, would threaten the country's entire banking system.
According to BI, the KSSK meeting agreed to provide a Rp 632 billion (US$67 million) cash injection to the bank, a figure that later ballooned to Rp 6.76 trillion.
The BPK, in its audit report, said there were a number of legal violations that took place during the pre-bailout, policy making and post bailout phases.
In the pre-bailout phase, the report said BI had failed to comply with its own regulations by allowing three ailing banks to merge together to form Bank Century.
In the policy making phase to salvage the bank, the audit said BI was not truthful about the dire condition of Bank Century during the KSSK meeting.
The audit also said the Rp 6.76 trillion bailout fund channeled to Bank Century after Dec. 18 in 2008 did not have any solid legal basis.
A law expert, Irmanputra Sidin said all BI officials suspected to have violated the law in the BPK findings should be subjected to the Anticorruption Law.
Article 3 of the Anticorruption Law says that state officials who abused their power to benefit themselves or others face between one and 20 years imprisonment. The fines for state officials found guilty of abuse of power range from Rp 50 million to Rp 1 billion.
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