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No link to SBY in Century case
Opening session: Former Bank Indonesia (BI) deputy governor Budi Mulya (left) attends the first hearing in his graft trial concerning the Rp 6
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Opening session: Former Bank Indonesia (BI) deputy governor Budi Mulya (left) attends the first hearing in his graft trial concerning the Rp 6.7-trillion Bank Century bailout at the Jakarta Corruption Court on Thursday. (JP/Jerry Adiguna) (BI) deputy governor Budi Mulya (left) attends the first hearing in his graft trial concerning the Rp 6.7-trillion Bank Century bailout at the Jakarta Corruption Court on Thursday. (JP/Jerry Adiguna)
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span class="inline inline-none">Opening session: Former Bank Indonesia (BI) deputy governor Budi Mulya (left) attends the first hearing in his graft trial concerning the Rp 6.7-trillion Bank Century bailout at the Jakarta Corruption Court on Thursday. (JP/Jerry Adiguna)
The first court hearing in the country's biggest corruption case has revealed no indication yet that President Susilo Bambang Yudhoyono had any role in approving a bank bailout in 2008 that led to massive state losses.
An indictment against former Bank Indonesia (BI) deputy governor Budi Mulya by the Corruption Eradication Commission (KPK) at the Jakarta Corruption Court on Thursday provided no sign that the bailout funds were channeled to finance Yudhoyono's 2009 re-election bid.
Since 2010, the case has become a major political football that has forced the KPK to launch a wide-ranging investigation after politicians accused the administration of misusing the vast bailout fund of Rp 6.7 trillion (US$582 million).
The indictment, however, alleges that Budi and all of BI's then board of governors who were involved in the bailout of the small-scale bank, since then renamed Bank Mutiara, had 'collectively' committed violations.
These include then BI governor, and now Vice President, Boediono, BI senior deputy governor Miranda Goeltom and BI deputy governors Siti C. Fadjrijah, Budi Rochadi, Hartadi Sarwono and Ardhayadi Mitroatmodjo, as well as deputy governor Muliaman Hadad, who is currently the chairman of the powerful Financial Services Authority (OJK).
Prosecutors have accused them of making illicit arrangements and orchestrating the eligibility of Bank Century to receive the bailout despite the fraud by its management and shareholders that had left the bank insolvent.
The KPK also found that the bank should not have been salvaged as it posed no systemic risks to the banking sector if it went under.
In response to the question as to why the indictment did not include an investigation into the money trail, KPK spokesman Johan Budi said the case would be fully unraveled.
He said that it would be possible for new facts to emerge in relation to the channeling of the bailout funds. 'Court hearings will present the testimony of witnesses and evidence which may be completely new or not included in the indictment,' Johan told The Jakarta Post.
Budi insisted that he would not be made a scapegoat as the alleged crimes were committed 'collectively'.
'As you just heard, the indictment clearly states that my alleged role was a 'collective act',' he told the Post after the court hearing.
According to the indictment, the KPK alleges that Budi and 'colleagues' abused their authority in channeling short-term financial assistance (FPJP) to keep Bank Century afloat.
They are also charged with abuse of authority in categorizing Bank Century as a 'potentially failed bank that posed a systemic threat to the banking sector'.
The 'systemic threat' was insisted on by BI to justify the bailout, which eventually ballooned to Rp 6.76 trillion (US$588.12 million) from the initial Rp 630 billion.
Then finance minister Sri Mulyani Indrawati, who along with Boediono approved the bailout based on the 'systemic threat' grounds, later regretted her decision, according the indictment.
During a meeting on Feb. 3, 2009, three months after the bailout decision, Mulyani asked the attendees whether the decision to categorize the bank as one with a systemic threat could be reviewed.
But Boediono apparently told her that the meeting should focus more on how to save Century as the decision to bail it out had been agreed upon.
KPK prosecutor KMS Roni said that Boediono would be among the witnesses to be summoned to testify in later hearings. 'We adopt the principle of equality before the law. We'll summon all relevant witnesses regardless of their positions.'
Boediono, in a statement released by his spokesman Yopie Hidayat, repeated that the decision to salvage the bank was a 'noble' one made for the sake of preventing the country being engulfed in a financial crisis.
'Don't be trapped in a 'logical leap' that all of the then BI leaders automatically became outlaws by salvaging the bank,' he said.
According to the indictment, several mid-ranking BI officials opposed the classification of 'systemic threat' in order to salvage the bank.
A day before the bailout decision, then BI director of the banking research and regulation directorate (DPNP) Halim Alamsyah, now BI deputy governor, presented an assessment stating that Century did not pose a systemic risk. The BI board of governors, however, disregarded Halim's assessment as they were concerned that it would hamper efforts to have the bailout approved.
The court hearing was also attended by several politicians who initiated a legislative inquiry into the case in 2010 that almost led to Yudhoyono being impeached.
Yudhoyono's Democratic Party deputy chairwoman Nurhayati Ali Assegaf called on the public not to be 'blinded' by the politicizing of the case.
'Political intervention must be avoided. Let the trial progress.'
