Kasus Century Versi Wikileaks

VZCZCXYZ0000
PP RUEHWEB

DE RUEHJA #1847/01 3101139
ZNY CCCCC ZZH
P 061139Z NOV 09
FM AMEMBASSY JAKARTA
TO RUEHC/SECSTATE WASHDC PRIORITY 3748
INFO RUEHGP/AMEMBASSY SINGAPORE PRIORITY 6635
RHEHNSC/NSC WASHDC PRIORITY
RUEATRS/DEPT OF TREASURY WASHDC PRIORITY
RUEAIIA/CIA WASHDC PRIORITY

C O N F I D E N T I A L JAKARTA 001847 
 
SIPDIS 
 
DEPARTMENT FOR EAP/MTS, EAP/RSP, INL, EEB/IFD/OMA 
TREASURY FOR IA T. RAND 
SINGAPORE FOR S. BLEIWEIS 
 
E.O. 12958: DECL: 11/05/2019 
TAGS: ECON EFIN KCOR PGOV ID
SUBJECT: SCRUTINY OF BANK CENTURY BAILOUT ICCREASES 
 
REF: 2008 JAKARTA 2207 
 
Classified By  AMBASSADOR CAMERON HUME FOR REASONS 1.4 (b and d) 
 
¶1. (C) Summary.  The Yudhoyono administration'sb"ailout of 
failed Bank Century in November 2008 (reftel) has gone from a 
controversial policy decision taken by technocrats at the 
height of the financial crisis to a potential focus for 
opposition against the new administration.  A group of 
primarily opposition legislators has called for initiation of 
a parliamentary investigation of the decision, which they 
claim wasted millions of dollars of taxpayers' funds to 
benefit powerful business and political interests. 
Opposition legislators have not yet, however, decided on when 
to initiate this motion.  House Speaker Marzukie Alie (of 
Yudhoyono's Partai Demokrat) and some government officials, 
such as Minister of Communications Tifatul Sembiring (of PKS) 
have cautioned critics to wait for the results of an 
investigative audit being conducted by the Supreme Audit 
Board (BPK) and expected to conclude by year's end.  An 
Embassy contact told us that funds from Bank Century had been 
used for financing President Yudhoyono's reelection campaign. 
 End summary. 
 
$700 MILLION QUESTION: BANKING SYSTEM STABILITY OR 
BAILOUT FOR POWERFUL INTERESTS? 
 
¶2. (SBU) Scrutiny of the Bank Century bailout grew following 
disclosure that capital injections to the failed bank totaled 
IDR 6.7 trillion (about USD 700 million), much higher than 
the IDR 2.6 trillion (about USD 270 million) initial 
injection previously reported to legislators.  Critics of the 
bailout have faulted Finance Minister Sri Mulyani Indrawati 
and former Bank Indonesia (BI) Governor and current Vice 
President Boediono for deciding to save the bank, rather than 
allowing it to fail.  Financial analysts and bankers 
generally supported the decision, accepting that a Bank 
Century closing in the midst of the financial crisis risked 
destabilizing the Indonesian banking system. 
 
¶3. (U) Controversy over the bailout of Bank Century 
(subsequently renamed Bank Mutiara) grew in the last 
parliament after disclosure of total capital injections in 
the bank by the Deposit Guarantee Agency (LPS) equivalent to 
over USD 700 million.  This figure was much higher than 
original estimates of the bailout and than an earlier 
disclosure of the initial capital injection.  Media reports 
alleging that the bailout may have benefited powerful 
business interests with funds in the failed bank provided 
further material to critics.  LPS Executive Director Firdaus 
Djaelani said only one large depositor (identified in the 
press as Budi Sampoerna) had made large withdrawals from his 
account following the government takeover, but that such 
withdrawals only represented ten percent of his balance. 
Clearly, however, depositors in Bank Century with accounts 
over the deposit guarantee limit of IDR 2 billion (about USD 
208,000) benefited from the decision to save, rather than 
liquidate, the bank. 
 
¶4. (C)  A reliable Embassy contact with Indonesia Corruption 
Watch (PLEASE PROTECT) told us he understood that funds from 
Bank Century had been used for financing President 
Yudhoyono's reelection campaign.  He believed the information 
was credible.  Former Vice President Jusuf Kalla strongly 
criticized the bailout during his last weeks in office.  He 
claimed that BI under Boediono was negligent in supervising 
Bank Century and argued that the bank should have been closed 
as its failure was due to fraud perpetuated by major 
shareholders.  An interim report presented by the BPK to the 
previous House of Representatives (DPR) at the end of 
September reportedly indicated that banking crimes likely 
triggered Bank Century's failure, prompting the DPR's Finance 
and Banking Commission to recommend inquiry into the case. 
BPK is continuing an audit requested by the previous DPR and 
is receiving assistance from PPATK, Indonesia's Financial 
Intelligence Unit, regarding the flow of funds related to 
Bank Century. 
 
¶5. (U) The Bank Century case became the subject of additional 
controversy after being linked to the conflict between the 
Corruption Eradication Commission (KPK) and the Indonesian 
National Police (INP).  The media has reported that KPK 
wiretaps may have implicated INP Chief Detective Susno Duajdi 
in soliciting a bribe to assist a wealthy depositor in 
withdrawing funds from Bank Century following the bailout, 
although no clear evidence of these allegations has been made 
public.  The presidential fact-finding team named by 
President Yudhoyono to investigate the KPK-INP controversy 
(septel) is also reportedly now looking into the Bank Century 
case. 
 
PARLIAMENT: SOME LEGISLATORS CALL FOR INVESTIGATION, WHILE 
OTHERS AWAIT AUDIT RESULTS 
 
¶6. (C) Opposition Indonesia Democratic Party of Struggle 
(PDI-P) legislators in the current DPR, have called for the 
formation of a parliamentary investigative committee on the 
government's handling of the Bank Century bailout.  PDI-P 
legislator Eva Sundari (PLEASE PROTECT) told us November 6 
that PDI-P has not yet decided how to move forward a motion 
to establish an investigative commission.  Sundari said 
opposition parties Gerindra and Hanura seemed firm in joining 
PDI-P to support the motion and several members from 
government coalition parties (including Golkar and PAN) have 
agreed to support the motion.  PDI-P is trying to gather 
additional support.  Meanwhile, House Speaker Marzukie Alie, 
of Yudhoyono's Partai Demokrat, and some government officials 
such as Communications Minister Tifatul Sembiring (of PKS) 
have urged stakeholders to wait for the Supreme Audit Agency 
to finish its audit before considering other action.  Calls 
for investigation have been seen by some analysts as an 
attempt to weaken technocrats in the Yudhoyono 
administration, following elections which had excoriated 
technocrats for their "neoliberal" economic policies. 
 
ATTORNEY GENERAL'S OFFICE CITES LEGAL BASIS OF DECISION, 
BUT SOME LEGISLATORS QUESTION MOTIVES 
 
¶7. (U) Qe legislators have also questioned the motives of 
the Attorney General's Office in defending the legal basis of 
the decision to save Bank Century.  On October 23, Deputy 
Attorney General for Special Crimes Marwan Effendy told the 
press that the Attorney General's Office (AGO) had not seen 
any indication that the extension of bailout funds by LPS, 
based on a recommendation by the Financial Sector Stability 
Committee headed by Finance Minister Sri Mulyani Indrawati 
and including then-Bank Indonesia Governor Boediono, had 
violated any law or had caused a loss to the state.  Effendy 
said the decision was based on a valid government regulation 
in lieu of law (Perppu 4/2008).  At least one opposition 
PDI-P legislator, Maruarar Sirait, told the press he 
suspected Effendy's statement was made to protect the Finance 
Ministry, BI and LPS, while a former PAN legislator, Drajad 
Hari Wibowo said he worried that the statement reflected 
systematic efforts to put the case on ice. 
 
DEFENSE OF BAILOUT AND EFFORTS TO TRACK DOWN ASSETS OF BANK 
CENTURY SHAREHOLDERS 
 
¶8. (U) Finance Minister Sri Mulyani has consistently defended 
the decision to save Bank Century, given the risks to 
financial system and the need to prevent a run on banks at 
the height of the financial crisis.  BI officials have also 
cited particular risks to the nearly two dozen other small 
banks whose depositors were fleeing in droves to larger 
institutions.  Sri Mulyani has stated that she was unaware of 
any alleged fraud that may have been committed by bank 
shareholders at the time of the decision.  Major Bank Century 
shareholder Robert Tantular was subsequently convicted in 
September 2009 of bank fraud and two other shareholders 
implicated in the fraud remain fugitives.  Minister Mulyani 
has told press she welcomes the BPK's audit, which is to be 
completed by year's end.  Meanwhile, government authorities 
continue efforts to recover funds believed moved offshore by 
the implicated Bank Century shareholders prior to the 
government takeover. 
 
 
 
 
 
 
 
 
 
 
 
HUME -sumber-