Syamsul Nursalim’s BLBI testimony war in the Syafruddin Temenggung hearing

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DR. Fuad Bawazier, MA
Economist and Former Finance Minister in Cabinet Development VII

IO – On 24 June 2018, Rakyat Merdeka Online (RMOL) reported that Witness Iwan Ridwan Prawiranata stated that Syamsul Nursalim’s Bank Dagang Negara Indonesia – “BDNI”, has misused the Bank Indonesia (Central Bank) Liquidity Assistance (Bantuan Likuiditas Bank Indonesia – “BLBI”) funds. Syamsul Nursalim’s legal counsel, Otto Hasibuan, categorically denied this statement. Even though the BLBI is an old case (about 20 years ago), if the Government, especially legal enforcement officers, has serious political will to resolve the case, the State’s losses can be reduced and a deterrent effect will be generated in the future.

We have concluded that from the very start of the case, BLBI perpetrators, especially Syamsul Nursalim, have been able to conspire with important deviants among the authorities. This enables them to steal vast amounts of the State’s monies and to keep the case from being resolved, and to prevent the State from recovering much of its losses. BDNI has been the bank with the worst level of violation from the start of the BLBI case, as it has the strongest conspiracy network with these bad officials.

At the start of the BLBI case (1997 until 1st Quarter of 1998), the Government had serious difficulties in exposing BLBI violations in general and BDNI/Syamsul Nursalim violations in particular, because of the many efforts made to cover the man and the bank in a network of power, so that it seemed that no violation had occurred. Therefore, as the Minister of Finance (Menteri Keuangan – “Menkeu”)/ Chairman of the Monetary Board at the time, I accepted the offer of help from the US Department of Finance. This offer was generously made by David Lipton as the Vice Minister of the US, i.e. to send us tens expert investigators in banking fraud to work jointly with 60 State Development Audit Agency (Badan Pengawasan Keuangan dan Pembangunan – “BPKP”) auditors at the Indonesian Bank Restructuring Agency (Badan Penyehatan Perbankan Nasional – “BPPN”).

The results include the travel restriction placed on Syamsul Nursalim et al. through the Decree of the Minister of Finance No. 201/KMK. 01/1998 dated 4 April 1998, and the takeover of BDNI by BPPN. BPPN’s special audit, executed with the assistance of the international auditor team, generated the Chairman of BPPN Report No. S-3/Prog/BPPN/1998 dated 18 May 1998 concerning the BPPN Progress Report until 15 May 1998. The BPPN Chairman at the time, Iwan Ridwan Prawiranata, sent me the report as I was the Finance Minister in charge then.

The BPPN clearly showed that until 3 April 1998, BDNI has received Rp 27.6 trillion BLBI funds from BI. It disbursed a total loan or credit of Rp 26.9T. Out of this total, Rp 24.4T (90.7%) was distributed to its own group. This is a flagrant violation of the Maximum Credit Limit (Batas Maksimum Pemberian Kredit – “BMPK” to its own group). When the BPPN Audit team audited total asset as reported by BDNI, the total was only Rp 5.8T instead of the reported Rp 33.6T, which means there was a mark-up of 82.8%. On the other side of the ledger, BDNI’s reported liability was only Rp 32.3T. However, when the Team audited it, the actual total was Rp 48.2T or 33.1% higher. Therefore, the total loss estimate was Rp 42.4T, which was derived from Rp 48.2T – Rp 5.8T. This is the amount embezzled by BDNI, that it handed over to the State and that is the amount lost by the State.

The BPPN Special Report stated that certain banks, including BDNI, has used their business funds in the interest of the founding shareholders and management. Furthermore, BDNI has been suffering from liquidity troubles prior to the crisis, and that they have obtain a lot of money from Bank Indonesia through the Special Money Market Bonds (Surat Berharga Pasar Uang Khusus – “SBPUK”). Just for BDNI, the value of the SPBUK paid out was Rp 9.8T. At the time, the exchange rate was Rp 2,400.00/USD, or more than USD 4 billion. Even worse, the Report also showed that BDNI continued to disburse USD 600 million to its own group companies despite its having liquidity issues (May 1997). Therefore, it is obvious that Syamsul Nursalim has violated many rules and regulations to enrich himself, by siphoning off BI/BLBI monies through BDNI.

In my written report to the BLBI Task Force (Panitia Kerja – “Panja”) of Commission IX of DPR dated 9 February 2000, I have also explained that according to the BPPN International Audit Team Report, BDNI was one of the banks that deviated and performed fraud in disbursing its credit. Therefore, it is erroneous if BDNI’s Legal Counsel stated that neither Bank BDNI or Syamsul Nursalim violated banking or BLBI regulations.

In fact, both the Financial Audit Board (Badan Pemeriksa Keuangan – “BPK”) and BPKP have issued many reports concerning BLBI, such as BPKP Report No. Lap-02.02.07.-437/D VII.2/2000 dated 17 July 2000 concerning the Report on the Results of Joint Audit and Investigation of BLBI Utilization by 42 BLBI Recipient/User Banks. Briefly, this Report states that there are strong indications of highly material deviations in the disbursement and utilization of BLBI. These include legal violations, losses to the State, the names of the parties benefiting from these deviations. The Report contains many details that include figures and name of banks, such as BDNI.

As I have reported to President Suharto at the time, BDNI/Syamsul Nursalim was the kingpin in the BLBI banking crime. I believe this was the reason why the Kejaksaan Agung – “Kejagung” arrested Syamsul Nursalim during the tenure of Attorney General Marzuki Darusman. Unfortunately, he succeeded to escape and left the country, he has never came according to KPK’s summons. If he really were innocent, why did he run away instead of going to KPK to explain himself?

On the other hand, law enforcement officers seem to be half-hearted in their effort to forcibly bring back Syamsul Nursalim, or in the effort to recover the State’s losses by seizing his assets in Indonesia. To quote Djony Edward in Nusantara.news, Jakarta 10 May 2018, suggested that KPK has at least 5 entry points it could have used to reopen investigations on Syamsul Nursalim’s BLBI case. Djony described Syamsul Nusalim’s uncooperative attitude and various oddities in some detail. For example, Syamsul Nursalim should have paid out Rp 1T, but he only paid out Rp 337 billion instead. Even more audaciously, Syamsul Nursalim claimed to have submitted Rp 27.49T in assets to BPPN, yet the legal status of these assets is unclear. To put it more plainly, these assets are still in Samsul Nursalim’s hands, and the State cannot seize them.

Is our State so helpless against a mere fugitive?

It shouldn’t have been. Once again, the difficulties faced by the State in resolving BDNI/SN’s BLBI case must be caused by some “X factor” that only a clean Government can resolve. This is no different from the Century Bank, which is always stuck at KPK because some “force” continues to protect it.

My surmise is based on experiences since 1998, that SN has been able to “buy out” deviant authority figures with his ill-gotten wealth (obtained among others from BLBI funds), and in that way has been able to establish a conspiracy to protect both his person and his property. I am certain that if they were serious, the Government, or the legal enforcement authority, will be able to bring Syamsul Nursalim in by force, either with the help of Interpol or with direct request to the Singaporean Government. The 1-billion-Rupiah question is, “Have these efforts been made?” If not, why, and who is responsible? The Government must not be brought down to its knees by terrorists, but must also be strong against BLBI corruptors.