Corruption in Indonesia: Budi Mulya Found Guilty in Bank Century Case
Former Deputy Governor of Indonesia's central bank (Bank Indonesia) Budi Mulya was sentenced to ten years imprisonment and a fine of IDR 500 million on Wednesday (16/07) after being found guilty of self-enrichment and corruption in connection to the government's USD $573 million bailout package for Bank Century in 2008 when, amid the global financial crisis, this bank was on the brink of collapse. However, many disagree that Bank Century was about to collapse as no deep analysis had been conducted on the financial condition of the bank.
Regarding the financial condition, Mulya also refrained from asking the opinion of the Bank Supervisory directorate, which was tasked to oversee Bank Century.
The Jakarta court found Mulya guilty of abusing his power when he declared Bank Century a bank on the brink of collapse and provided the short-term loan facility (FPJP) to the bank. Mulya, together with former Bank Indonesia Governor Boediono (currently Indonesian vice president) as well as members of the bank's board, approved the FPJP (worth IDR 689.3 billion) and made it possible for Bank Century to obtain a temporary capital injection of IDR 6.7 trillion (USD $573 million) from the country's Deposit Insurance Agency (LPS). Mulya had accepted an IDR 1 billion (USD $86,000) bribe from former Bank Century owner Robert Tantular. This sum of money was given in order to influence Mulya to provide the short-term loan to Bank Century (although Mulya claims it was a personal loan which has already been repaid). Robert Tantular was sentenced to five years in prison in 2009 after being found guilty of issuing USD $200 million in fraudulent loans as well as misusing depositors' funds (in 2010 this sentence was raised to nine years by the Supreme Court).
The court gave a heavy sentence to Mulya because he is considered to have seriously harmed the image of Bank Indonesia (undermining the institution’s authority) by engaging in criminal activities while performing his duties as Deputy Governor.
The case is the latest in a series of high profile corruption scandals in Indonesia. Political corruption is a structural problem in Southeast Asia’s largest economy and seriously undermines people’s trust in politicians and political parties. In late 2012, Sports Minister Andi Mallarangeng was forced to resign after being named a suspect in a corruption case involving the construction of a new sports complex (Hambalang sports complex) in Bogor (West Java). In May 2014, Minister of Religious Affairs Suryadharma Ali resigned after being accused of mishandling the country’s hajj pilgrimage fund. However, on a lower political level, corruption cases fill the pages of Indonesian newspapers on a daily basis. Some notable recent examples include Rudi Rubiandini (former Head of Indonesia's oil & gas regulator SKK Migas), Anas Urbaningrum (former Chairman of the ruling PD party), Muhammad Nazaruddin (former Treasurer of the PD party), and Ratu Atut Chosiyah (Governor of Banten). Moreover, the judicial power is also not free from corruption. Former Chief Justice of the country's Constitutional Court (Mahkamah Konstitusi) Akil Mochtar was sentenced to life imprisonment after being found guilty of corruption as well as money laundering.
In the Corruption Perceptions Index of Berlin-based politically non-partisan Transparency International, Indonesia occupied the 114th place (out of a total of 177 countries) in 2013, indicating a high degree of political corruption.
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