Kalla Questioned By House But Mystery Remains

By webadmin on 09:09 am Sep 20, 2012
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Markus Junianto Sihaloho

Former Vice President Jusuf Kalla told lawmakers on Wednesday that there were a number of meetings held prior to the government giving a controversial Rp 6.7 trillion ($724 million) bailout package to Bank Century.

He also said that he was not present at many of those meetings.

Kalla’s questioning was part of the House of Representatives investigation into the bailout and President Susilo Bambang Yudhoyono’s alleged role.

The president had been accused by a former antigraft chief of holding a high-level meeting in Oct. 9, 2008, to discuss the bailout. The president and his representatives have denied the accusations.

“It was a big meeting attended by bank leaders, businessmen and governors,” Kalla told lawmakers on Wednesday, as he gave his chronology of the Bank Century bailout.

Kalla said that during the October 2008 meeting, bank leaders had asked the government to provide protection, including a blanket guarantee, known as the JPSK, to protect the banking system amid the global financial crisis.

One week later, Sri Mulyani Indrawati, then finance minister and chief economic minister; Bank Indonesia Governor Boediono; and State Secretary Hatta Radjasa, visited Kalla’s office.

“They asked me to approve the blanket guarantee and I rejected it,” Kalla told lawmakers on Wednesday. “Why do the people have to carry the losses incurred by private banks? The private banks are owned by Indonesia’s richest people, so why do the people have to carry the burden?”

There has been speculation that the president issued a regulation (perppu) in order to bypass resistance from Kalla and lawmakers surrounding the bailout.

The perppu on the Financial System Safety Net was signed by Yudhoyono on Oct. 15, 2008.

“It wasn’t right [to issue] the perppu because it gave the finance minister more authority than the president,” Kalla said. “The finance minister was authorized to use as much state money as needed without any requirement to give legal accountability.

“This blanket guarantee had no legal basis. That’s what Finance Minister Sri Mulyani said at the time.”

On Oct. 22, 2008, the government decided to disburse the Rp 6.7 trillion to the bank based on the newly signed perppu.

The following month, the government injected Rp 2.7 trillion into the ailing Bank Century. By July 2009 it had spent Rp 6.7 trillion to bail out the lender.

Following Kalla’s testimony on Wednesday, Hendrawan Supratikno, a member of the House’s supervisory committee on the Bank Century scandal, said that there appeared to have been a systematic and concerted attempt to clear the way for the bailout.

“The attempt included excluding Kalla from any meetings discussing the bailout,” he said.

Kalla confirmed that he was rarely invited to meetings in which the bailout was discussed, including the meeting that was allegedly held by the president to discuss ways to save the bank.

Kalla said he wasn’t invited to that meeting because it was centered on legal matters. “I didn’t attend all cabinet meetings,” he said.

He added that he never made a fuss about not being invited to some of the meetings because it was up to Yudhoyono to decide whether he should be present.

The former vice president on Wednesday also addressed Bank Indover, another bank facing troubles in 2008.

Antasari Azhar, the former chairman of the Corruption Eradication Commission (KPK), reportedly made a statement earlier this month claiming that before Bank Century, a bailout had been discussed for Bank Indover.

Kalla admitted that then BI governor Boediono sought the government’s approval for the plan, but that Kalla told Boediono that Bank Indover’s problem was Bank Indonesia’s responsibility.

Boediono insisted that Indover would incur huge losses if it wasn’t bailed out, but Kalla said he stood by his decision not to rescue the bank.

Shortly afterwards, Kalla said, Sri Mulyani, Boediono and Hatta paid the visit to his office seeking approval of the blanket guarantee for banks.

Kalla said he rejected the proposed blanket guarantee regulation that was later used as the basis to bail out Bank Century.

Hendrawan, who represents the Indonesian Democratic Party of Struggle (PDI-P), said on Wednesday that he would ask the Bank Century committee to summon Sri Mulyani, who is now one of three managing directors at the World Bank, to help clarify unresolved problems with the Bank Century case.

“Sri Mulyani once said that she felt misled by Bank Indonesia data,” Hendrawan said. “Sri Mulyani was the first person to say that Bank Century’s failure wasn’t caused by the crisis.”

He added that it has long been assumed that the bailout was given due to the economic crisis, but that may not be correct.

“So, Sri Mulyani is the person that can really disclose the mysteries,” he said. “There will be a problem to summon Sri Mulyani, but I will still make the suggestion.”

After seeking information from Kalla on Wednesday, the same lawmakers met with Abraham Samad, chairman of the KPK.

The KPK has been investigating if the Bank Century scandal caused losses to the state and if the bailout decision can be classified as a graft case.

Abraham, however, acknowledged that the recent withdrawal of 20 National Police investigators from the KPK could hinder the investigation into the Bank Century scandal and other graft cases.

To illustrate the point, he said that one police investigator is currently working on 11 cases.

He also said that the police’s decision to send replacements will not solve the problem.

“It’s impossible for new people to immediately jump in and solve cases,” Abraham said.

Abraham also quelled rumors that he would resign if the bank case was not solved.

Last week, Antasari, who leveled the original charges against Yudhoyono in an Aug. 18 television interview, denied making any such allegations.

“I did not say a word about Bank Century or the bailout,” Antasari now claims.