KPK to grill JK in Century bailout probe

JAKARTA. The Corruption Eradication Commission (KPK) will question former vice president Jusuf Kalla on Thursday as a witness in the Bank Century bailout case.

KPK spokesperson Johan Budi said on Wednesday that Kalla would be summoned because KPK investigators felt the need to question him to probe the case, which centers on the government’s controversial decision to bailout the ailing bank in 2008. “Pak Jusuf Kalla will be questioned because of his expertise,” he told a press conference at the KPK’s headquarters in Kuningan, South Jakarta.

Kalla last year claimed that he had no hand in the government’s decision to use Rp 6.7 trillion (US$580 million) of public money to save the floundering Bank Century in 2008, and singled out then finance minister Sri Mulyani Indrawati as the main culprit.

According to Kalla, the 2008 Government Regulation on the financial system safety net (JPSK) signed by President Susilo Bambang Yudhoyono, had granted Sri Mulyani the full authority to disburse unlimited amounts of funds and issue a blanket guarantee for the troubled bank.

Kalla said the fundamental flaw in the regulation was that it gave Sri Mulyani an authority greater than the President’s. The 2003 State Treasury Law stipulates that the President can bail a bank out up to a maximum of Rp 100 billion.

Kalla has repeatedly emphasized that he never approved the disbursement of the funds, and that he had declined the request of Sri, along with former Bank Indonesia governor and current Vice President Boediono and other ministers, to issue a blanket guarantee to save the bank.

He said that he had objected to such a plan as it would rob the state and because it was unfair to burden the state with the problems of a private bank.