Court quizzes ex-Indonesian minister over graft scandal

JAKARTA (AFP) - A former finance minister once regarded as Indonesia's top reformist was questioned in court as a witness on Friday in a corruption case that has sullied the president's ruling party.

Now a World Bank managing director, Dr Sri Mulyani Indrawati reiterated that a 6.76 trillion rupiah (S$743.6 million) bank bailout she approved was necessary to prevent the institution's collapse and a domino effect on the financial sector at the onset of the 2008 financial crisis.

The bailout money was allegedly siphoned off by well-connected depositors, while allegations emerged that funds flowed to President Susilo Bambang Yudhoyono's campaign coffers. The president has vehemently denied the accusations.

Dr Indrawati gave her account in the trial of the then-central Bank Indonesia deputy governor, Budi Mulya, who was charged with malfeasance in the bailout of Bank Century, now known as Bank Mutiara.

"As decision makers, what we were facing at that time was which (decision) would bring about the least consequences... to save the Indonesian economy," Dr Indrawati told the court.

"The situation at that time posed a systemic threat because of the global economic crisis," she said.

Dr Indrawati criticised the central bank for giving officials data on Bank Century that was out of date, leading to a significantly inflated bailout amount.

Dr Indrawati has already been questioned three times as a witness by anti-graft investigators over the case and has denied any wrongdoing.

Vice President Boediono, who was central bank governor at the time of the bailout, has also been implicated in the probe but denies any wrongdoing. Mr Boediono, who goes by one name, is due to testify as a witness in the same case on May 9.

Bank Century is the biggest scandal to hit the president's Democratic Party, which leads the ruling coalition government.

The party lost more than half its support in the April 9 parliamentary elections, with a slew of its lawmakers and senior officials jailed for corruption.

Dr Yudhoyono had just won his second term as president in 2009, a landslide victory on a graft-fighting platform, when the Bank Century case broke out.

Dr Indrawati resigned as finance minister in 2010 after being questioned by investigators and after the House of Representatives deemed the bailout illegal.

Analysts, however, say that parliamentary factions opposed to her reform agenda had long been seeking her removal and had effectively orchestrated her ouster.