Hendarman defends halt of BLBI probe (+State auditor confirms misuse of BI funds)

Jakarta, Suara Indonesia News - Attorney General Hendarman Supandji continues to defy public
pressure to reopen a probe into a huge loan scandal, following
the imprisonment of prosecutor Urip Tri Gunawan, who led the
investigation, last week.

During a hearing with the Attorney General's Office on Monday,
members of the House of Representatives' Commission III, which
oversees legal affairs, urged Hendarman to reopen the Bank
Indonesia liquidity support (BLBI) case, which allegedly
involved tycoon Sjamsul Nursalim, following Urip's conviction.

The Corruption Court sentenced Urip to 20 years in prison for
receiving a US$660,000 bribe from businesswoman Artalyta Suryani
to stop investigating Sjamsul in the BLBI case, which cost the
state more than Rp 25 trillion in losses.

However, Hendarman insisted the guilty verdict against Urip did
not constitute new evidence for the AGO to reopen the case.

"Urip was punished because he received bribes to help Artalyta
monitor the case, not to halt the investigation. All the team
members agree there is not enough evidence to resume the
investigation," he argued. His defense immediately raised questions from legislators
present at the hearing that the court clearly ruled Urip was
guilty of accepting the money from Artalyta, Sjamsul's close
aide, in exchange for the probe into the tycoon to be dropped.

The verdict also suggests the 11-member team of prosecutors
could be implicated in the scandal, with many believing Urip may
not have been the only perpetrator.

During the trials of Urip and Artalyta, the court heard about
the involvement of other senior AGO prosecutors, including
former assistant attorney general for special crimes Kemas Yahya
Rahman, former assistant attorney general for state
administration Untung Udji Santoso and former director of
special crimes investigation Muhammad Salim.

"All these testimonies clearly show they fabricated everything
so the case could be halted. We ask the AGO to investigate all
of the team members and reopen the case," legislator Nursyahbani
Katjasungkana of the National Awakening Party (PKB) said.

Benny Kabur Harman of the Democratic Party warned that
Hendarman's failure to reopen the BLBI case could send out the
message that the attorney general had something to hide.

"What are you afraid of? Only with a firm decision to reopen the
case can the AGO regain the public's trust," he said.

Hendarman denied he had anything to conceal.

He added because the government had issued the release and
discharge letters for fraudulent BLBI debtors, the case could
only be reopened if there was new evidence proving that
Sjamsul's assets, given to the state to pay off his debts, were
overstated, thus leading to state losses.

"All the members of Urip's team agreed they did not find new
evidence, since it turned out the value of the assets given to
the state had been appraised by an independent firm. That's why
we dropped the investigation," he said.

Sjamsul, who is believed to be in hiding in Singapore,
reportedly repaid his Rp 28.4 trillion debt. But the AGO
launched an investigation after the value of assets he handed
over to the state was found to worth only Rp 4.9 trillion.

Several Commission III members questioned why the AGO did not
begin an investigation into possible collusion between the
appraisal firm, government officials and Sjamsul in repaying the
debt.

Lukman Hakim Saifuddin of the United Development Party (PPP) and
Gayus Lumbuun of the Indonesian Democratic Party of Struggle
(PDI-P) urged the AGO to hand the BLBI case over to the
Corruption Eradication Commission (KPK) as soon as possible.



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The Jakarta Post
Tuesday, Sept. 9, 2008

State auditor confirms misuse of BI funds

Irawaty Wardany, The Jakarta Post, Jakarta

A state auditor told the Corruption Court on Monday that Bank
Indonesia's board of governors had used funds from the central
bank's foundation to "approach" law enforcers, legislators and
political parties.

"We once asked Pak Aulia Pohan and Anwar Nasution (about this
matter) when we were conducting an audit on BI's financial
report in 2005," senior Supreme Audit Body (BPK) official I
Wayan Wara told the court.

Both incumbent BPK chief Anwar and former BI deputy governor
Aulia were implicated in the embezzlement of Rp 100 billion
(US$10.9 million) from the Indonesian Banking Development
Foundation (YPPI).

Wara was testifying at the trial of former BI legal bureau head
Oey Hoey Tiong and suspended Surabaya's BI office chief Rusli
Simanjuntak in connection with the graft scandal.

Wara said Aulia had confirmed BI had used the funds to "tackle
negative issues" related to the embezzled BI liquidity support
(BLBI) funds.

Aulia expressed his concern the cases could negatively impact
the central bank and its employees, Wara added.

"Therefore, the BI board of governors needed money to approach
law enforcers, the House of Representatives and political
parties," Wara said.

He quoted Aulia as saying the BI did not have sufficient funds
at the time to finance the scheme and had therefore turned to
the YPPI fund.

"The decision to use the YPPI fund was made during two meetings
of the board of governors," Wara said.

On June 3, 2003, the board of governors held a meeting during
which they decided to use the YPPI fund to resolve the BLBI
cases, speed up the approval of the revised BI law and to fund
legal defense for implicated BI senior officials.

Wara said the BPK team of auditors had also spoken to Anwar
Nasution, who told them he had only attended one of the meetings
on July 22, 2003, in his then-position of senior deputy governor
of the BI.

Anwar said he agreed during the meeting that the funds be
disbursed even though he actually did not agree with the scheme,
Wara added.

He quoted Anwar as saying the use of the YPPI fund violated the
2001 Foundation Law, which states that a foundation's funds may
only be used to benefit the foundation.

"Pak Anwar also said he had never received any accountability
report on the fund," Wara said.

Budi Untung, a foundation expert at Gadjah Mada University who
also testified at the trial Monday, said if an institution
established a foundation, it could not use the foundation's
funds to finance interests beyond those of the foundation's.

BI established the YPPI in 1970 as a research and education
center for banking.

The BI scandal has also seen three others stand trial at the
Corruption Court, including former BI governor Burhanuddin
Abdullah and legislators Anthony Zeidra Abidin and Hamka Yandhu.
The court has heard during previous case sessions that several
other state officials were involved in the scandal, including
current National Development Planning Minister Paskah Suzetta
and other former legislatures.

Source: The Jakarta Post