[ppi] [ppiindia] Indonesia wins one in war on corruption

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http://www.atimes.com/atimes/Southeast_Asia/HA31Ae01.html


 
Indonesia wins one in war on corruption
By Bill Guerin 




JAKARTA - Indonesia has scored a major victory in the war on corruption after 
the return to the country of a crooked banker who fled before being sentenced 
in absentia to eight years in jail. 

The US turned over fugitive David Nusa Wijaya to Indonesia on January 17 after 
he was located in Los Angeles four days earlier. The two countries do not have 
an extradition treaty. However, national police chief General Sutanto, who was 
hand-picked last year by the president, said Wijaya had been given two choices 
by the police. 

"The first was for him to go through the legal process in the US and then be 
deported, while the second was to voluntarily undergo the legal process in 
Indonesia," he said. 

Wijaya, a 44-year-old ethnic Chinese wanted for embezzling about US$139 
million, chose the latter, Sutanto said. This could suggest Wijaya believes 
that given time, he will find a way to escape justice yet again. However, he 
may find it much more difficult this time. President Susilo Bambang Yudhoyono 
is talking tough on seeing such criminals brought to justice. 

"I don't want any extortion, backroom deals or anything by the law enforcement 
people here that would create a more difficult situation for the judiciary," 
Yudhoyono warned, when commenting on the joint operation by Indonesian police 
and the US Federal Bureau of Investigation that resulted in Wijaya's capture in 
San Francisco. 

Significantly, US assistance came less than a week after Washington praised 
Jakarta's arrest of suspects in the 2002 murders of two American teachers in 
the province of Papua. The case was the main hurdle to restoring military ties 
between the two countries. 

Once again, as with the Papua arrests, public statements confirm the strong 
relationship developing between Jakarta and Washington. "I am grateful to the 
friendly country that helped him [Wijaya] be brought to justice," Yudhoyono 
said. 

The US Embassy in Jakarta said in a statement: "The US government understands 
that returning fugitives and stolen assets from abroad in corruption cases is a 
top law-enforcement priority in Indonesia and looks forward to cooperating with 
Indonesia in other cases in the future." 

Wijaya had been on the run since 2004, a few weeks before Indonesia's Supreme 
Court increased an earlier sentence to eight years for embezzlement in a scam 
linked to one of the biggest and nastiest wholesale fraud cases ever, the 
misuse of Bank Indonesia Liquidity Assistance (BLBI) in 1997-98. 

In a related development, the owner of liquidated Bank Bira, Atang Latief alias 
Lau Tjin Ho, returned to Indonesia on Friday to face trial over alleged 
embezzlement of Rp325 billion (US$34.7 million) in BLBI. 

He arrived in Jakarta from Singapore and was immediately rushed to a hospital 
for an undisclosed illness, according to Antara news agency. Sutanto said a ban 
on Latief going abroad abroad was issued in 2000 but later revoked by the 
immigration office. 

"He went abroad because he felt he was being treated unfairly," Sutanto said. 
"We will try to conduct an objective legal process and assure him that his 
rights will be respected." 

Of Rp325 billion Latief is accused of taking from the BLBI fund, Rp155 billion 
has been returned to the state. "Latief has taken responsibility for the 
remaining Rp170 billion and, most importantly, he has returned home," Sutanto 
said. Latief's assets in Indonesia have been transferred out of his name since 
he left the country. 

Commander Benny Mamoto, head of the Transnational Crimes Division, said 
Indonesia's "improved image" among the international community had helped the 
recapture of fugitives. "We successfully convinced the US government about the 
recent improvements to our law-enforcement system, so that they were willing to 
surrender Wijaya to us." 

The US is the first foreign country to give explicit assistance to Jakarta's 
hunt for fugitive criminals. It is almost certain to result in breaking the 
deadlock in negotiations with Singapore over an extradition agreement, an 
essential element in Indonesia's crusade against corruption. Wijaya initially 
fled to Singapore before moving on to the United States. 

Out of harm's way?
Indonesia has extradition agreements only with Hong Kong, Australia, Thailand 
and the Philippines. Singapore has resisted such arrangements, although Jakarta 
has tried to negotiate a pact since 1973 and often demands that the tiny 
island-state cease harboring criminals and their ill-gotten gains. 

Attorney General Abdul Rahman Saleh only last week accused Singapore of 
delaying a pact planned in December by insisting that it be inked this year as 
part of a Defense Cooperation Agreement between the two neighbors. Saleh, 
hand-picked by Yudhoyono, pledged last year to reopen an investigation into the 
BLBI crimes and go after fugitives abroad. 

Singapore's economy depends to some extent on Indonesian cash, and Indonesians 
are among the biggest buyers of private real estate there. Jakarta has alleged 
that Indonesians have transferred illegal funds to Singapore, which has strict 
bank-secrecy laws and claims to have enough safeguards to prevent the country 
from becoming a haven for laundered funds. 

Nonetheless, many Indonesians alleged to have committed crimes at home live 
freely in Singapore, and some have become citizens of the tiny but wealthy 
republic, which is a regional financial center. 

Many of those on the run are living in Singapore and "if we don't have an 
extradition agreement, it's very difficult to catch corruptors", Saleh told a 
Jakarta Foreign Correspondents Club lunch. 

Mother of all heists
Wijaya, the former head of Bank Umum Servitia, had been convicted of 
involvement in a case tied to the infamous misuse of BLBI funding. A total of 
about Rp140 trillion ($13.5 billion) in liquidity support, equal to more than 
half of the 1998-99 state budget, was dished out as a lifeline to 48 of the 
country's ailing banks during the 1997-99 Asian financial crisis to help them 
cope with mass runs against them. 

The Supreme Audit Agency (BPK), in a report commissioned by the House of 
Representatives, found that Rp138 trillion of the BLBI funds had been channeled 
by improper procedures and then misused by the recipient banks, mostly owned by 
cronies and relatives of former president Suharto. 

Instead of diligently managing the funds to guarantee depositors' savings, 
bankers used much of the money for currency speculation, loans to affiliated 
business groups, and repayment of subordinated loans, securities transactions 
and even office costs. 

Though the verdict against Wijaya was based on Bank Servitia receiving BLBI 
funding totaling Rp1.29 trillion, he used the funds for the interests of his 
own business group through Bank Sembada Arta Nugraha, another bank that he 
owned. 

The horrendous abuse of funds was blamed firmly on weak supervision by the 
central Bank Indonesia (BI). At first the government refused to cover the BLBI 
losses, which threatened to bankrupt BI. In November 2000 the Finance Ministry 
and BI reached an agreement, under which the central bank would only have to 
cover Rp24 trillion, while the government's Indonesian Bank Restructuring 
Agency (IBRA) would be responsible for the remainder. 

Indonesians are still paying for the crimes of the errant bankers. The 
government raised funds for the BLBI using bonds for which it had to allocate 
trillions of rupiah every year to repay principal and interest. To finance the 
bonds, spending on subsidies and development programs was slashed under an 
austerity drive that hit the poor hard. Thousands of jobs were lost in the 
suspended or closed down banks. 

Classic example
A brief look at Wijaya's case serves to show just how easily things went wrong 
when the long arm of the law was, inadvertently or deliberately, caught 
napping. 

Although Indonesian law allows courts to order any defendant at any time to be 
detained to prevent him or her from absconding, many of the corrupt managed to 
flee prior to verdicts in their cases as they were not taken into custody while 
on trial or awaiting decisions on their appeals. By the time the courts had 
handed down a final verdict, they had absconded to escape imprisonment. Another 
common tactic is to plead illness. And instead of insisting on speedy 
prosecutions, officials continue to grant delays to court dates and issue 
permits for medical treatments abroad. 

Prosecutors can do nothing to prevent them from fleeing as only the courts have 
the power to order detention of defendants during the trial process. Meantime, 
officials use paper chases to give them time to leave the country, despite 
pending jail terms. 

The attorney general's office blamed bureaucratic snags for the late delivery 
of documents that normally get forwarded "a day or two" after a judgment is 
rendered. According to the law, prosecutors can only execute a verdict when 
they receive an "official" copy of the order from the issuing court. In 
Wijaya's case they got it only a year after the case closed. The Supreme Court 
was blamed for an administrative snafu that contributed to Wijaya's escape, as 
the court verdict, handed down on July 23, 2003, was received by prosecutors on 
July 28, 2004, long after Wijaya had fled. 

Deputy Attorney General for Intelligence Basrief Arief leads a special team set 
up to hunt down 13 of the country's most wanted fugitives. Many of Indonesia's 
top white-collar criminals are still at large but Arief's official "most 
wanted" list is now down to 12 names with Widaya's capture. Not all of them are 
wanted for BLBI crimes. 

Still on the loose (among many others)
Sjamsul Nursalim, former president commissioner of Bank BDNI, is one of the 
most notorious of the country's bad debtors. He lives in grand style in 
Singapore, which is hardly surprising considering his Rp37 trillion gift from 
BLBI through his bank makes him the second-largest recipient of BLBI after Bank 
Central Asia. 

Samadikun Hartono is another BLBI fugitive and a former president director of 
Bank Modern, another bank that was closed. He was found guilty of embezzling 
Rp169 billion and sentenced to four years in jail; there have been no public 
reports of his whereabouts. 

Bambang Sutrisno and Andrian Ariawan are also BLBI fugitives - they were vice 
president and president director, respectively, of the closed Bank Surya. Both 
were accused of embezzling Rp1.5 trillion and sentenced to life imprisonment. 
Both reportedly live in Singapore. 

Sudjiono Timan, former president director of state-owned venture-capital 
investment company PT Bahana Pembinaan Usaha Indonesia, disappeared when 
prosecutors tried to arrest him at his home after he was sentenced to 15 years 
in jail. He was involved in a Rp1.1 trillion corruption case involving the 
channeling of state funds to Suharto's cronies. He is also thought to be in 
Singapore. 

Set up in 1993 to facilitate national development and cooperation with foreign 
investors, BPUI ended up with debts of almost $1 billion and was owed hundreds 
of millions in outstanding loans by corruption-linked tycoons. 

Bill Guerin, a Jakarta correspondent for Asia Times Online since 2000, has been 
in Indonesia for 20 years, mostly in journalism and editorial positions. He has 
been published by the BBC on East Timor and specializes in business/economic 
and political analysis related to Indonesia. He can be reached at 
softsell@xxxxxxxxxxxx
. 

(Copyright 2006 Asia Times Online Ltd. All rights reserved. Please contact us 
for information on sales, syndication and republishing .)

[Non-text portions of this message have been removed]



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