Thursday, May 27, 2010

Bribery in Bank Indonesia

Since Indonesia became a democratic country in 1998, almost everything that ever happened here are freely reported by the media.

So many corruption cases and foul play in the management of the country have been exposed, the latest being the mysterious flow of 6.7 Trillion Rupiah to bailout of Bank Century, and the Trillion Rupiah Tax fraud.

While the above cases are still being investigated by the law enforcement agencies, yesterday The Jakarta Post (below) reported that officials of the central bank i.e. Bank Indonesia, have received US$ 1.3 million bribes from a subsidiary of the Reserve Bank of Australia for helping the latter in winning a contract in 1999.

Considering that this is a very serious allegations, I hope that the law enforcement agencies in both countries would check whether or not the news report is true.

Former BI officials took bribes from RBA: Reports
The Jakarta Post, Jakarta | Wed, 05/26/2010 10:13 AM | National

Former Bank Indonesia officials received US$1.3 million in bribes from Reserve Bank of Australia (RBA) subsidiaries to help the latter win a contract and manipulate future tenders in 1999, a newspaper reported.

Melbourne’s The Age cited confidential faxes from a Jakarta businessman to executives at Securency International and Note Printing  Australia (NPA) referring to “our friends” and “unofficial payments" and “commissions”. One fax, dated July 1, 1999, specifically stipulates the paying of S1.3 million to two Bank Indonesia officials.

According to The Age, Radius Christianto, who represented the RBA firms Securency and NPA in Indonesia between 1999 and 2006, was to be paid US3.65 million for his services.
In his faxes, Christianto refers to “Mr. S” and “Mr. M”, which the newspaper believes were senior Bank Indonesia officials who played key roles in awarding the RBA firms the contract for printing 500 million Rp 100,000 banknotes.

The revelation of this possible corruption came when a former Securency employee said recently that he was asked to pay bribes and procure prostitutes for foreign central bank officials.

Currently, the Australian Federal Police are investigating Securency for paying more than $A20 million in bribes through middlemen to win currency printing contracts in Vietnam, Nigeria and Malaysia between 2003 and 2006.

Christanto’s correspondence also revealed collusion between Bank Indonesia officials, Christanto and RBA banknote executives to mark up the Securency and NPA bid for the rupiah banknote contract by 20 percent with an agreement that it would then be reduced to a 10 per cent mark-up.

Bank Indonesia said it would allow the law enforcers to investigate the alleged bribery. “Let the KPK [Corruption Eradication Commission] and the Attorney General’s Office conduct an investigation,” he was quoted as saying by Antara news agency.

“The KPK has not received any official report on the case,” KPK spokesman Johan Budi said Tuesday. He added that the commission had only just learned of the allegation from Jakarta journalists, so had not had the opportunity to discuss a possible investigation.

“We will process any information on possible corruption as long as it involves state officials,” Johan said.

“The KPK does not work retroactively, therefore we can’t process any case that occurred before August 1999,” Johan said, adding that the KPK was regulated by the 1999 Corruption Eradication Law, which came into effect in August that year.
The law defines corruption as well as the process for its eradication.

“The KPK also refers to the Criminal Code, which stipulates that a person cannot be charged or tried for any crime occurring before the issuance of any law covering such crimes,” Johan said.

“However, we can investigate these allegations if the case has consequences occurring after 1999.”
 It is possible that someone might come forward with information on the case because of the media coverage,” he said, emphasizing that ”we except anonymous reports”. (ipa)


umihoney said...

This white collar crime is kinda hard to eradicate I suppose.It requires great political will on the ruling party to combat criminal breach of trust.

"But there will be no justice, there will be no government of the people, by the people, and for the people, as long as the government and its officials permit bribery in any form."
~John Jay Hooker

Luke said...

Harry, this amazing, its like the country is made of wood. Looks nice and is highly polished but full of termites underneath burrowing away making the country collapse one day.
At what level is there not political or financial corruption?
Seems even the traffic lights are corrupt always favouring one direction more than another!!!!
Still, I love living here so its not all bad :)

H. Nizam said...

I agree that what is really needed is a strong political will to fight all kinds of corruption. I always love your comments and quotes, makes me feel want to quote you :
"But there will be no justice, there will be no government of the people, by the people, and for the people, as long as the government and its officials permit bribery in any form."
~John Jay Hooker

We may have been independent since 1945, but we only began as a democratic nation since 1998. Before that it was one of the worst authoritarian ruled country.
The beauty of democracy is that everything is open thereby making problems more possible to solve.

Anastasia F-B said...

Harry, off topic, but I thought you might like to offer a comment on this

colson said...

One of my acquaintances who was at the top of the Asian division of a European company located in Jakarta, at the time Of Suharto's new order, once told me "there was no corruption or bribery in Indonesia, you only paid for information".

Maybe the Aussies and the Indonesian bankers involved, did have a similar perspective.

I mean: morals in business don't come naturally. They have to be imposed.

H. Nizam said...

Hi Ana I am so glad to see you back. Okay I'll check your blog post which I am sure would be interesting as always.

"It takes to tango" that what people use to say. I am not saying that the our officials who received bribes are okay, but the one who gives should also be blamed.
During Soeharto era me and anti corruption activists wondered why do developed countries keep on giving financial credit/aids while they always blamed our government officials corrupt. I am sure it was because at that time US and Co need Indonesia in their Cold War against the Communists countries.