[nasional_list] [ppiindia] Indonesia wins a round against corruption

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http://www.atimes.com/atimes/Southeast_Asia/GD01Ae02.html
 April 1, 2005

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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