T

he Corruption Eradication Commission (KPK) said on Tuesday that it would expand its probe into other Bank Indonesia liquidity support (BLBI) debtors who were alleged to have colluded with government officials to offer them clearance letters freeing them from their obligation to pay their debt under the presidential administration of Megawati Soekarnoputri in 2002.

KPK deputy chairman Bambang Widojanto said that investigators were now looking into alleged irregularities in the issuance of a clearance letter for tycoon Sjamsul Nursalim, the owner of Bank Dagang Nasional Indonesia, which received financial assistance under the BLBI scheme.

But Bambang also said that investigators launched a probe into 21 other tycoons receiving such a clearance.

'€œWe are not prosecuting the policy, we are investigating how the policy was abused [by state officials] as a means to commit crime. The letters should only be given to those who had paid their debt. But why in some cases did the debtors who had not paid their debt receive such a luxury?,'€ Bambang said on Tuesday.

Sjamsul, who is also known as the owner of tire maker giant Gajah Tunggal and coal miner Bukit Baiduri Energi, is currently overseas. Bambang said that Sjamsul'€™s whereabouts would not hamper the ongoing investigation at the KPK.

'€œRemember graft convict Anggodo Widjojo, who was arrested abroad after 2 years? So, don'€™t worry we have our own way to conduct the investigation,'€ Bambang said.

During the 1997-1998 Asian financial crisis, the government, through the central bank, provided liquidity support of Rp 144.5 trillion to assist 48 commercial banks in coping with massive runs during the monetary crisis, but 95 percent of the money was eventually embezzled. Sjamsul received Rp 28 trillion of BLBI funds.

According to data from the Indonesia Corruption Watch (ICW), the 21 debtors include Hendra Liem of Budi International Bank, the Ning King of Dana Hutama Bank, Sudwikatmono of Bank Subentra and Bank Surya, Ibrahim Risjad of the Bank Risjad Salim International, Soedono Salim of Bank Central Asia (BCA), Siti Hardijanti Rukmana of Yakin Makmur Bank and Hashim Djojohadikusumo of Papan Sejahtera bank and Nirwan Bakrie of Nusa
Nasional bank.

KPK Bambang refused to disclose details about the possible investigation on the other tycoons that the antigraft body would launch in the future, adding that giving away too much information could compromise the ongoing investigation.

Earlier on Monday, the KPK grilled former coordinating economic minister Rizal Ramli under the administration of president Abdurrahman '€œGus Dur'€ Wahid in relation to the case. Speaking after the questioning, Rizal blamed Megawati for the massive financial losses from the BLBI scandal.

Rizal said that the debtors lobbied the Soeharto administration, convincing high-ranking officials to allow them to pay back their debts to the state using assets, whose value was constant, rather than cash.

Rizal said Gus Dur, deplored the Soeharto administration'€™s decision, which he said would cause the state massive financial losses, as the value of the assets would decrease overtime.

'€œTo make sure that the tycoons paid back the same amount as they had borrowed from the state, we issued what we call a personal guarantee notes policy. The policy meant that if the tycoons couldn'€™t pay their debt, then their families, until the third generation, bore the responsibility to pay,'€ he said.

Rizal said Megawati reversed the policy.

'€œThe policy gave the government strong bargaining positions in the case, but after our administration was over the policy was withdrawn [under Megawati'€™s administration],'€ Rizal explained.

To replace the personal guarantee notes policy, Megawati, after receiving input from her Cabinet ministers, including former finance minister Boediono, coordinating economic minister Dorodjatun Kuntjoro-Jakti and state-owned enterprises (SOE) minister Laksamana Sukardi, issued Presidential Decree No. 8/2002, which regulated these '€œrelease and discharge'€ letters, freeing recipients of the funds from obligation to fully pay the debts.