VP Dismisses Bank Bailout Concerns

JAKARTA ~ The vice president denied this week any wrongdoing in a contentious US$704-million bank bailout at the centre of the country’s latest corruption scandal.

Boediono, the former head of the central bank, Bank Indonesia (BI), told a gathering with foreign reporters on Wednesday that he stood by the decision to authorise the Rp6.7-trillion lifeline to the ailing Bank Century.

“I do not want to talk about the bailout of Bank Century because we know it was a necessary action and we did the right thing,” Boediono said.

The vice president and Finance Minister Sri Mulyani Indrawati have been under fire for their roles in authorising the bailout after Bank Century failed late last year.

President Susilo Bambang Yudhoyono has said he welcomes pushes by activists and lawmakers for legal and parliamentary investigations into allegations the bailout ultimately benefited wealthy allies of the president.

Boediono said he welcomed the opportunity for all “suspicions” surrounding the case to be “cleared up.”

“If there are any questions we will answer them,” Boediono said.

“I’m very optimistic that this government will actually get through this (corruption crisis) very well,” he said.

“We got a landslide mandate and we will stick to that and we will stick to our promises of clean government.”

The country’s top auditor, Hadi Poernomo, presented a report on Monday into the bailout finding strong indications of “violations” and recommending a full investigation.

The total funds disbursed to save the relatively minor bank were 10 times the amount initially deemed necessary to prevent the lender’s collapse.

Poernomo found in his report BI had providing no evidence the collapse of Bank Century posed a systemic threat to the economy and that Rp2.8 trillion injected into the bank after 18 December, 2008, had “no legal basis.”

Allegations of wrongdoing over the Bank Century bailout and a connected scandal over an alleged plot by police and prosecutors to concoct false charges against top officials of the Corruption Eradication Commission (KPK) have caused major headaches for Yudhoyono.

Activists have accused the president of failing to act decisively against corrupt officials allegedly involved in the scandal and some protests have called for his resignation.

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