The Corruption Eradication Commission (KPK) finally detained its first suspect on Friday in the case surrounding the 2008 Bank Century bailout, a move that could ease, for a while, the political pressure to uncover the truth behind the scandal that continues to haunt the government.
President Susilo Bambang Yudhoyono's Democratic Party has been practically alone in the House of the Representatives in defending the bank rescue as other parties have united in demanding the KPK bring to justice everyone responsible for the massive losses sustained in the bailout.
Their targets include Vice President Boediono, who was then governor of Bank Indonesia (BI), and former finance minister and current managing director of the World Bank, Sri Mulyani Indrawati. Both have repeatedly declared their
innocence of any wrongdoing, arguing the bailout was the only way out to prevent a much more damaging impact on the country's economy amid the global economic crisis of that time.
KPK chairman Abraham Samad said the commission decided to arrest former BI deputy governor Budi Mulya after questioning him for five hours on Friday.
The commission declared the senior banker a suspect along with his colleague at the central bank, Siti Chalimah Fadjrijah, in November last year for their alleged roles in the mismanagement of the short-term liquidity support (FPJP) amounting to Rp 6.76 trillion (US$582 million) for Bank Century. Siti has suffered from a serious illness since her status as suspect was announced.
KPK spokesman Johan Budi said that Budi would be detained in the cells of the anti-graft agency's headquarters in Kuningan, South Jakarta, for the next 20 days.
Budi is believed to have been partly responsible for declaring that a Bank Century failure would not have a systemic impact on the country's economy. According to the results of a forensic audit by the Supreme Audit Agency (BPK), Budi is also suspected of having received Rp 1 billion from former Bank Century owner Robert Tantular.
Speaking before being led to the car that would transport him to his cell, Budi said that he trusted KPK would get to the bottom of the case.
"I believe that everything will be resolved in accordance with the law," he told reporters while donning the KPK's orange detainee jacket.
Prior to his interrogation, Budi insisted that the central bank did not have the authority to declare Bank Century as a failed bank, which might have a systemic impact.
Budi's lawyer Luhut Pangaribuan, meanwhile, hinted that the person responsible was Siti, a former BI deputy governor.
According to Luhut, Siti dealt directly with the banking sector in the country as she was the head of the BI monitoring department.
His client, however, headed the monetary and foreign exchange department, and thus, was not involved in the Bank Century fiasco, he said.
Commenting on the allegation that the central bank was remiss in disbursing the FPJP, Luhut said that this was not the case.
"Disbursing the FPJP was conducted as stipulated by the law, it even obliged [BI] to do so. Because the FPJP was aimed at helping [the ailing bank] in order to avoid a crisis," he said.
Luhut also justified the BI decision to purposely amend its capital adequacy ratio (CAR) regulation so that the ailing bank could be rescued by the government, saying that such an action was needed in the dire circumstances of the time.
Bank Century timeline
2004: Bank CIC merges with Bank Pikko and Bank Danpac to form Bank Century.
2008 November: Then finance minister Sri Mulyani Indrawati reports Bank Century's troubles to President Susilo Bambang Yudhoyono in Washington, US, on the sidelines of the G20 meeting.
November: The Financial Sector Stability Committee (KSSK), chaired by Sri Mulyani and then-Bank Indonesia (BI) governor Boediono, meets to declare Century a failure and agrees to bail it out.
2009 July: During a deliberation of the crisis bill, the government inadvertently discloses to the House of Representatives the ballooning amount of the Century bailout fund, totaling Rp 6.76 trillion.
August: The House requests the Supreme Audit Agency (BPK) audit the bailout.
Nov. 23: The BPK submits its first investigative audit to the House.
December: The House officially endorses the formation of an committee of inquiry.
2010 March: The committee of inquiry finds no conclusive evidence of Yudhoyono's inner circle profiting from the bailout.
May: Sri Mulyani resigns to take a job at the World Bank.
2011 June: The House requests the BPK launch an audit to trace the flow of the bailout funds.
Dec. 23: The BPK submits its results to the House.
Source: The Jakarta Post
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