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Boediono blamed other officials for Century mess
Total disclosure: Antigraft activists stage a demonstration outside the Corruption Eradication Commission (KPK) premises on Friday demanding a thorough investigation into the Rp 6
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Total disclosure: Antigraft activists stage a demonstration outside the Corruption Eradication Commission (KPK) premises on Friday demanding a thorough investigation into the Rp 6.7-trillion (US$585 million) Bank Century bailout fraud. They claimed much was yet to be revealed about the case, which involves senior government officials. (Antara/Yudhi Mahatma) (KPK) premises on Friday demanding a thorough investigation into the Rp 6.7-trillion (US$585 million) Bank Century bailout fraud. They claimed much was yet to be revealed about the case, which involves senior government officials. (Antara/Yudhi Mahatma)
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span class="inline inline-none">Total disclosure: Antigraft activists stage a demonstration outside the Corruption Eradication Commission (KPK) premises on Friday demanding a thorough investigation into the Rp 6.7-trillion (US$585 million) Bank Century bailout fraud. They claimed much was yet to be revealed about the case, which involves senior government officials. (Antara/Yudhi Mahatma)
Former Bank Indonesia (BI) governor, Vice President Boediono, has claimed that he did not validate the data and changes made by his officials when making the crucial decision to bail out Bank Century in 2008, documents reveal.
In a transcript of a questioning session by the Corruption Eradication Commission (KPK) on Nov. 23, 2013, which was recently obtained by The Jakarta Post, Boediono did not verify the proposed changes to the original amount needed for the bailout fund.
The proposal to lower the required funds to Rp 632 billion (US$55 million) from Rp 1.77 trillion hours before the bailout decision on Nov. 21, 2008, was a crucial factor that eventually convinced then finance minister Sri Mulyani Indrawati to approve the bailout, which, however, eventually ballooned to Rp 6.76 trillion.
According to a KPK indictment document, if the proposed amount had been excessive, there was a possibility that the bailout option would have been rejected by Mulyani, as the head of the Financial System Stability Committee (KSSK).
The KSSK is a joint forum involving the Finance Ministry, BI, the Deposit Insurance Corporation (LPS) and other related institutions, which makes decisions on measures to prevent financial crises.
'Prior to a KSSK meeting, we gathered in a room next to Mulyani's. I was informed by Pak Muliaman Hadad [then BI deputy governor] that there were changes [to the proposal], which would need my signature. I fully trusted him and did not check the details of the changes. But I take full responsibility for that,' Boediono said.
Muliaman is now the chairman of the Financial Services Authority (OJK).
Boediono, who had served for less than six months as BI governor prior to the bailout, is now at the center of the country's biggest graft investigation. The bailout, according to the KPK, caused state losses of Rp 7.38 trillion.
The first hearing in the case was held on Thursday, with then BI deputy governor Budi Mulya as the first defendant.
According to the indictment document, the alleged crime was committed 'collectively' by Boediono, then BI senior deputy governor Miranda Goeltom and then BI deputy governors Siti C. Fadjrijah, Budi Rochadi, Muliaman Hadad, Hartadi Sarwono and Ardhayadi Mitroatmodjo.
In the probe document, Boediono also denied discussing the exact amount of the required bailout fund.
'I was informed, but it was not discussed in detail. The board of governors assigned Muliaman as the deputy in charge of that,' he said.
Boediono blamed the LPS and BI banking supervisors for the swelling of the bailout fund. 'As of that moment [the bailout decision], the arrangement was between the LPS and the supervisors,' he added.
In response to questions from the KPK regarding the validity of data used to determine Century as a 'potentially failed bank that posed a systemic threat to the banking sector', Boediono said it was the 'responsibility of related directorates and the deputy governors to provide [the data]'.
Boediono also denied responsibility for the losses in the channeling of BI's short-term assistance (FPJP) worth Rp 689 billion to keep Bank Century afloat prior to the bailout.
'Who is responsible for extending it? I do not know,' Boediono said.
'But from what I recalled the relevant parties [responsible] were the directorates under the coordination of deputy governors Budi Mulya, Siti Fadjrijah and the late Budi Rochadi.'
Boediono, in a statement released on Thursday by his spokesman Yopie Hidayat, repeated that the decision to salvage the bank was a 'noble' one, made for the sake of preventing the country from being engulfed in a financial crisis.
'Don't be trapped in a 'logical leap' that all of the then BI leaders automatically became outlaws by salvaging the bank,' he said.
President Susilo Bambang Yudhoyono remained silent on Friday.
Presidential spokesman Julian Aldrin Pasha only said: 'It's a legal process; we'll see where the progress leads to. As we all know Bapak President always respects the legal process.'
