The House of Representatives attempt to shed light on the Bank Century bailout faltered as two legal experts in a Monday hearing could not agree on whether the bailout was legal or not.
A law expert from the University of Indonesia, Erman Rajagukguk, told the House inquiry committee that the regulation-in-lieu of law (Perppu) used as the legal basis for the bailout was legitimate.
“The previous House did not firmly state whether it decided to endorse or reject the Perppu,” he said.
However, another law expert, H.A.S Natabaya, told the committee that in his interpretation, the House had rejected the Perppu with its decision to not firmly endorse it.
“If there was no official endorsement during a House plenary session, then it would mean that the Perppu had been rejected,” he said.
Commenting on the experts’ different positions, one of the committee deputy chairmen, Gayus Lumbuun from the Indonesian Democratic Party of Struggle (PDI-P), said the previous House speaker, Agung Laksono, needed to be summoned to clarify if the House had rejected the Perppu or not.
According to House rules, a Per-ppu should be deliberated, endorsed or rejected in a plenary session.
The Perppu in question gave full authority to the Financial System Stability Committee (KSSK), including the finance minister, Bank Indonesia and other financial authorities, to take necessary action to safeguard the economy in times of financial crisis. Under the same regulation, the financial authorities cannot be sanctioned for decisions taken in exercising their authority.
This Perppu was used as the legal basis for the controversial Bank Century bailout decision.
The Bank Century case hinges on a bailout decision taken in the midst of the global financial crisis in November 2008. Its total cost rose to a staggering Rp 6.76 trillion (US$716 million), which was ten times higher that the cost first estimated.
Finance Minister Sri Mulyani Indrawati and the then Bank Indonesia governor Boediono, who is now the Vice President, were the prime decision makers in the bailout. Both repeatedly stressed that they believed that they had acted to defend the national economy from a systemic threat to the financial system.
Constitutional Court chief Mahfud MD said that those responsible for authorizing public policies could be criminally charged should they be found to have misused their authority.
“If a policy contains criminal elements, such as corruption, collusion, or only benefiting certain individuals, then this kind of policy can be regarded as a crime, and [the decision makers] can be criminally charged.
“That is also the case with the Bank Century bailout debacle,” he said as quoted by vivanews.com in Jakarta on Monday.
President Susilo Bambang Yu-dhoyono, in defense of his two most trusted aides, said Sunday that he had endorsed their decision and called on the House and public not to criminalize a government policy.
The bailout case has led to recent suggestions that there would be moves to impeach the President.
Yudhoyono said Monday that a leader could be impeached only when he was proven guilty of “gross” violations of law.
He said, in response to the impeachment rumor, that it would not be easy to unseat him.
— Aditya Suharmoko and Erwida Maulia contributed to the story.
