The Jakarta Post
Former vice president Jusuf Kalla said that Bank Indonesia (BI) should be held accountable for the 2008 Bank Century bailout, which many believe was rife with graft.
Speaking after undergoing questioning by the Corruption Eradication Commission (KPK) on Thursday, Kalla said the bailout was unnecessary and plagued with irregularities.
His statement came as the KPK stepped up its probe into the bailout. Last week, the commission arrested former BI deputy governor Budi Mulya on allegations that he accepted Rp 1 billion (US$85,969) from a Bank Century official before the bailout. His arrest has fueled speculation that Vice President Boediono, the BI governor at the time, would also be charged in the case on the grounds that decision-making in the central bank was collegial.
Kalla said he found it peculiar that Bank Century's bailout cost ballooned to Rp 6.76 trillion ($577 million) from Rp 632 billion in a span of three days.
'The [initial estimated cost of saving the bank from] failure was Rp 630 billion, but after three days, [the state] paid Rp 2.5 trillion [in the first tranche of the bailout],' he told reporters at KPK headquarters in Kuningan, South Jakarta.
When asked who should be held accountable, Kalla pointed the finger at the decision-makers, which were the BI and the now-defunct Committee for Financial Sector Stability (KSSK), which was headed by then finance minister Sri Mulyani Indrawati.
'The one responsible was the one who paid.'
Mulyani ' now the managing director at the World Bank ' previously said she felt she was being manipulated by the BI since she was unaware of the sudden skyrocketing bailout cost when she agreed to save the ailing bank.
A report from the BI shows that the bailout cost was mainly the result of alleged Rp 5.98 trillion fraud, bad loans and irregularities undermining the ailing bank. The report said the KSSK meeting had agreed to inject Rp 632 billion into the bank. But after spotting more irregularities, despite the bank having been under intensive BI supervision since late 2004, the KSSK decided to increase the amount to bail out the bank.
Besides blaming the BI and the KSSK for the ballooning bailout cost, Kalla also said he had been blind-sided during the process that led to the decision to save the ailing bank, despite his being the acting president at the time.
According to him, he was left in the dark about the situation concerning Bank Century when Mulyani and Boediono had a meeting with him one day before the bailout decision was made.
'The finance minister and the BI governor reported nothing to me about our economic problems. [They told me that] there was no problematic bank,' Jusuf said.
He said that during the meeting with Mulyani and Boediono, they, along with other ministers at the time, explained to him that there was no looming economic crisis.
'But a few hours later, they had a meeting at the Finance Ministry and decided at dawn that one bank could cause a systemic failure [in the country's banking sector],'
Despite all the signs pointing at Boediono as the one culpable in the case, Kalla declined to single him out, saying it was the BI as an institution that should be held accountable. 'I'm not saying Pak Boediono [is guilty], but BI as an institution has to explain [the bailout],' he said.
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