The Ongoing Bali Bank Scandal

The Bank Bali scandal is turning into a long-running saga which has almost all the elements of a TV soap opera. John Howard reports.

A Byzantine tale of back-stabbing and bribery, death threats and murky multi-million-dollar deals has become Indonesia's most keenly followed soap opera, and nobody is watching more closely than President B J Habibie. His political future depends on it.

The saga has dominated Indonesia's newspapers and television newscasts for weeks, eclipsing even the tragedy in East Timor and its capital Dili. A nation that had grown wearily resigned to rampant corruption has been obsessively following the scandal, scenting the chance that the perpetrators may for once be brought to book.

"It is about huge sums of money involving people in high places, if not the president - an allegation yet to be proved - then certainly people in his circle," the Jakarta Post said in an editorial last week.

The scandal surrounds the payment of US$70 million by Bank Bali to a firm run by Setya Novanto, a leading member of Mr Habibie's ruling Golkar party, for the recovery of loans owed by the Indonesian Bank Retructuring Agency (IBRA)

Former Bank Bali president, Rudy Ramli, says he tried for months to get the money before finally accepting Mr Novanto's offer to recover it - at a 60 percent commission.

The opposition says the money was plundered for Mr Habibie's re-election war chest, a charge he has denied. But clear evidence is emerging that high-level officials were involved.

An audit of the deal by PriceWaterhouse-Coopers contains a dizzying catalogue of abuses, detailing; - "numerous indicators of fraud, noncompliance, irregularity, misappropriation, undue preferential treatment, concealment, bribery and corruption during the processing and payment of the Bank Bali claims."

The case has provided a succession of lurid revelations for Indonesia's, until now, newly unfettered press.

"The scandal has revealed back-stabbing and betrayal," the Jakarta Post said. "The bank could not have picked a more exotic name. There has been no murder, thank God, but there have been threats made to the lives of the whistle-blowers."

"The only thing missing in the picture is that there is no sex scandal. It would certainly liven up this otherwise dull all-male cast, which has nevertheless kept the nation if not in suspense, then certainly amused," the Jakarta Post added.

Mr Ramli has requested protection from the National Commission of Human Rights, saying anonymous callers have threatned to kill him and his family. Newspapers say he has also been constantly followed by mysterious black cars.

A journal written by Mr Ramli is at the centre of the scandal. It details meetings with several government officials and close associates of Mr Habibie, including one of his brothers.

An attempt by the government to discredit the journal backfired embarrassingly.

The government produced a statement signed by Mr Ramli which said he had been forced to fabricate the journal after being kidnapped by an opposition party. But the statement met widespread derision, not least because it misspelt the first name of its purported author as "Rudi."

Mr Ramli told a parliamentary hearing last week he had not written the retraction, after pointedly introducing himself as "Rudy Ramli - and that's Rudy with a y, not an i".

IBRA staff have also been threatened. Some are using special devices on their mobile phones to prevent calls being tapped. Finance ministry officials say they, too, have received bomb threats.

There is an atmosphere of mounting paranoia. There are also concerns that bribery is being used to keep the scandal under wraps. A group of anti-Habibie legislators within the ruling Golkar party are pushing forward to have Golkar abandon Habibie.

As fresh revelations emerge, the scandal is creeping ever closer to Mr Habibie's inner circle. One name in particular keeps cropping up: Mr Habibie's old friend A.A. Baramuli.

Mr Baramuli, head of the president's Supreme Advisory Council, is regarded a s a key player in the "Habibie success team", which is arranging Mr Habibie's bid to win re-election when Indonesia chooses its next president in November.

In testimony to parliament last week, the IBRA head Glenn Yusuf said he had been called to a meeting in late July shortly after the scandal broke, where Mr Baramuli told him that unless he co-operated, state enterprises minister Tanri Abeng and Mr Baramuli himself could be implicated, and Mr Habibie's position threatened.

Mr Baramuli and Mr Abeng are both named in Mr Ramli's journal. Both deny any wrongdoing.

Mr Baramuli is not taking his newfound notoriety lying down. He says he is a victim of a plot to smear him, and in a series of outbursts has denounced one of the Bank Bali whistle-blowers as a drug addict, and attacked Marzuji Darusman, a leading player in Golkar's anti-Habibie camp, as "a fool in politics."

International financiers, meanwhile, anxious to take a stand against corruption in Indonesia, have said they are suspending loans until the scandal is properly settled. Analysts say this is a signal they have given up on the current regime and are waiting for a new government.

The scandal, meanwhile, remains far from solved. "We have only seen a few of the pieces that make up this mysterious jigsaw puzzle." the Jakarta Post said.

So, did US President Clinton's threats of economic sanctions against Indonesia over East Timor troop withdrawals mean anything. Probably not, the international financial community was already saying to Indonesia, "We're outta here." The Indonesian's now don't have much more to lose. And that could be very dangerous.

ENDS

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