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Indonesia wins a round against
corruption
By Bill Guerin
JAKARTA - Judges at the South
Jakarta District Court have jailed a swindler for life
for his part in the embezzlement of Rp1.2
trillion (US$126 million) from state-controlled Bank
Negara Indonesia (BNI). The sentence - the only
salutary life sentence to be issued during President
Susilo Bambang Yudhoyono's administration - comes as a major boost
to the credibility of the president, who has vowed
to fight corruption and boost investment in the
country.
On Wednesday, the panel of
judges, presided over by Judge Roki Pandjaitan,
found Adrian Waworuntu "legally and convincingly
guilty" of the criminal act of corruption by
receiving Rp1.2 trillion from fictitious letters
of credit. The judges also ordered the defendant
to pay a restitution of Rp300 billion to the state
and fined him Rp1 billion.
Only days after
being installed as president, Yudhoyono urged
Attorney General Abdul Rahman Saleh to handle
major outstanding court cases quickly, including
cases of graft, and reportedly asked for periodic
updates on the status of major cases, such as the
BNI fraud.
"I fully trust you to deal with
such cases completely, and you have to trust me as
well," Yudhoyono reportedly told Saleh.
The
scandal at BNI, the country's second-largest bank
in terms of assets, first made headlines in
October 2003. The bank's Kebayoran Baru branch in
South Jakarta had granted export credits to
subsidiaries of the Gramarindo Group, a
group
holding company parlty owned by Waworuntu,
using 41 letters of credit (L/C) issued by banks
in Kenya, Switzerland and the Cook Islands as
collateral.
The bills attached to the L/Cs
were fictitious, as the goods were never imported,
but the branch went ahead anyway and disbursed the
credits, between December 2002 and July 2003,
without conducting any formal assessments or
checks.
No shortage of
laws
Numerous existing laws allowed police,
prosecutors and judges to go the last mile in
pursuing the case. They include Laws No 3/1977,
31/1999 and 20/2001 on corruption, article 263 of
the Criminal Code on document forgery, Law No
10/1998 on banking and Law No 15/2002 on money
laundering.
Pandjaitan, reading from the
verdict, said the judges had decided to impose the
heaviest possible sentence as the defendant's acts
had "severely hurt the country's economy and the
nation's morals".
"Those people involved
in corruption should be punished as severely as
possible because the act of corruption has been
proven to turn the country poor," the judge said.
The credits went to PT Petindo and the
Gramarindo Group. PT Sagared is the holding
company for all the subsidiaries of the Gramarindo
Group. The subsidiaries implicated in the scandal
are PT Bassomasindo, PT Bhinekatama Pacific, PT
Gramarindo Mega Indonesia, PT Magnetique Usaha Esa
Indonesia, PT Triranu Caraka Pasifik, PT Pan
Kifros, PT Ferry Masterindo and PT Metrantara.
The court said Waworuntu had acted as an
investment consultant for Gramarindo and these
subsidiaries. He also held shares in some of them,
though the companies were seen simply as fronts
for the grand scam. When the verdict was
announced, Waworuntu looked shocked and said he
would appeal. His lawyer, Yan Juanda Saputra,
accused the judges of ignoring the facts presented
during the case and merely siding with the
prosecution.
Safety in Singapore
The main suspect in the case, Maria Pauliene
Lumowa, is still at large. Lumowa, a Dutch citizen
and a commissioner at Gramarindo, left the country
before the investigation began and is reportedly
living in Singapore.
The government is unable
to bring her back into the country because Indonesia
does not have an extradition treaty with Singapore.
The chairman of the Corruption Eradication
Commission (KPK), Taufiqurrahman Ruki, had earlier
called for an in absentia trial for Lumowa so the
government could recoup the bulk of the money. He
argued that by holding such a trial the government
would have a legal basis for an immediate move to
seize all of Lumowa's assets, including the flow
of funds on her behalf.
"It seems the
efforts to get her back here are difficult as she
is not an Indonesian citizen, but we could ask for
an in absentia trial that will provide a legal
base to seize her assets," Ruki said.
Unproven political
aspects
Alleged
political dimensions to the case
surfaced just as campaigning for last year's presidential
election got under way. Rumor had it
during that time that three presidential
candidates from the opposition Golkar Party
received money from individuals implicated in the
scandal.
Golkar Party chairman at the
time, Akbar Tanjung, coordinating minister for
people's welfare Jusuf Kalla, now the country's
vice president, and the new leader of the Golkar
Party, General Wiranto, all denied the
allegations.
A letter leaked to the press written
by Edi Santoso, foreign customers' division
head at BNI's Kebayoran Baru branch, stated
that, together with suspected business persons,
Santoso had met with Wiranto to discuss the
general's plan to run for the presidency. Wiranto
quickly denied this, saying he did not know
Santoso and had no relations with any of the
suspects in the BNI case.
Help readily
available
Waworuntu was first detained last
year, but was released when state prosecutors
rejected the initial dossier presented against him
by police as incomplete. He later managed to sneak
out of the country and fled to the United States,
despite a travel ban imposed on him, raising
suspicions that high-ranking police officers were
involved in his escape.
Brigadier-General Samuel Ismoko, head of
the fraud squad, was removed from his post
in October after media reports that he had taken a
bribe worth $20,000 from Waworuntu to help the latter
flee the country. Later that month
Waworuntu surrendered to police in the North Sumatra
capital Medan, after being on the lam for more than a
month.
Earlier, a police disciplinary
hearing had imposed a one-year suspension on
Ismoko for giving special treatment to several
suspects in the BNI case. But the hearing was
unable to prove that he had accepted a bribe.
Not the first, nor the last
The
South Jakarta District Court has so far convicted
11 of 19 suspects in the case. Waworuntu is the
ninth to be jailed. Among the others are Ollah
Abdullah Agam, Aprilla Widata and Adrian
Pandelaki, all of whom were sentenced to 15 years
in prison; Richard Kountul received 10 years; and
Titik Pristiwati was sentenced to eight years.
BNI's Kebayoran Baru branch head Koesadiyuwono
received a 15-year sentence, while Santoso, like
Waworuntu, was sentenced to life.
Last November another defendant, John Hamenda,
a director of PT Petindo, was sentenced to
20 years in jail and fined Rp1 billion. Trust financial
and legal magazine was fined Rp1 billion (nearly
$115,000) by the Central Jakarta District Court
for discrediting Hamenda and his company in an
article published in its October 1-7, 2003,
edition titled, "A gang of thieves hits state Bank
Negara Indonesia".
Hamenda's conviction followed a string of earlier
verdicts handed down to bankers and others who were
implicated in cases for misusing state funds. Last July, for
example, two former branch managers of another
state bank, Bank Rakyat Indonesia, and two
businessmen were sentenced to jail after being
declared guilty in a $21 million scandal. In the
same month, the Central Jakarta District Court
also sentenced Yosef Tjahjadjaja to 11 years in
prison for his part in a state-owned Bank Mandiri
loan scandal that involved Rp120 billion of state
funds.
On track
Notwithstanding
the widely acknowledged improvements in
Indonesia's banking sector since the 1997 Asian
financial crisis, the fact that this particular
embezzlement crime, made possible by help and
cooperation from bank insiders, stemmed from a
lack of supervision of just two individuals - one
of them the branch manager - highlights the
continuing need for oversight, supervision and
risk management in Indonesia's banking system.
The Yudhoyono administration has committed
to continuing to reform the country's financial
sector, including improving its regulatory
framework. Such reform, however, will take time.
Although pledging to bring the country's
endemic corruption to an end may capture the
public's imagination, it will take more than just
one such example of severe punishment under the
Yudhoyono administration to restore police and
judicial credibility in the eyes of the world, let
alone among Indonesians themselves.
Yet if
other large-scale, high-level corrupters are to be
vigorously prosecuted and, on conviction, given
severe sentences, Indonesia's perception in
international eyes as a corrupt country may soon
be on the wane.
This could generate
positive spin offs for trade, tourism and
investment for a country led by a president who
swept to victory with one of the strongest
mandates of any recently elected democratic world
leader.
Bill Guerin , a
Jakarta correspondent for Asia Times Online since
2000, has worked in Indonesia for 19 years in
journalism and editorial positions. He has been
published by the BBC on East Timor and specializes
in business/economic and political analysis in
Indonesia.
(Copyright 2005 Asia Times
Online Ltd. All rights reserved. Please contact us
for information on sales, syndication and republishing.) |
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