“WHY BATAK NOT AS GOOD AS THIS BUSINESS MAN?”
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.
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.