Indonesian & Australian central banks scandal

The Coruption Eradication Commission (KPK) will start inquiry on allegation that the Reserve Bank of Australia (RBA) has given US$ 1.3 million in Bribe to senior officers of Bank Indonesia (BI) to win a note printing tender in 1999.

The Jakarta Globe (below) quoted KPK Deputy Chief M. Yassin as saying that  this inquiry is based on an undisclosed public complaint received on 25 May.

Considering that this case was disclosed by an Australian newspaper The Age 11 years after the bribery took place, I wonder whether there are any other unknown foul play between said central banks of both countries. Hmmmm .... I'll keep my fingers crossed.

KPK Begins Inquiry Into Bank Indonesia Australian Bribery Case

Armed with a public complaint, the Corruption Eradication Commission announced it would initiate an investigation into allegations that senior central bank officials had received $1.3 million in bribes over a banknote-printing tender with an Australian company in 1999.

Deputy Chairman Muhammad Jasin said on Friday that the complaint officially enabled the antigraft agency, also known as the KPK, to conduct the probe.

“Regarding allegations of bribery at Bank Indonesia, the KPK received a report that was registered at the KPK Directorate of Public Complaints on May 25,” Jasin said. “The report is now being examined by the public complaints team as we gather additional information.”

Jasin added that the commission would not disclose who filed the complaint or the contents of the report.

“We are also discussing the possibilities of collaborating with our Australian counterparts on the matter,” Jasin said.

The case surfaced after Melbourne-based newspaper The Age reported on Tuesday that two senior BI officials, identified only as Mr. S and Mr. M, had allegedly received bribes from Indonesian businessman Radius Christanto.

Radius reportedly paid $1.3 million in bribes to award the $50 million contracts to print 500 million Rp 100,000 banknotes to two Australian firms he was representing — Securency International and Note Printing Australia.

KPK spokesman Johan Budi said that the case was under the agency’s jurisdiction. “As long as it involves public officials and there had been a misappropriation of state funds, the KPK will investigate.”

Muhammad Assegaf, lawyer of former Bank Indonesia Governor Syahril Sabirin, confirmed that the alleged bribery occurred during his client’s tenure. “However Syahril was not aware of the bribery because he was not involved in the technical aspect of the procurement or tender process,” Assegaf said.

The central bank also pledged to conduct an internal investigation into the matter. Deputy Governor Budi Rochadi said four former BI officials directly linked to the tender had been questioned but refused to disclose names.

“The officials involved in the procurement had mostly retired but some are still active. We will question everyone from the staffers to the directorial levels,” he said, as quoted by state-run Antara news agency.

The Age reported that a confidential fax, sent from Christanto to the two firms on July 1, 1999, explicitly referred to large bribes to Bank Indonesia.

The paper added that Christanto’s correspondencewith the Australian firms also revealed collusion among BI officials, Chris­tanto and the firms’ executives to mark up the bids for the rupiah contract.

The Reserve Bank of Australia, the holding company of both firms said it took the matter “very seriously” and condemned corrupt behavior of any kind, but could not comment further given the ongoing Australian Federal Police investigation.

In a separate statement, Securency said it had referred the bribery allegations to Australian police after it became aware of them a year ago.

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)