Indonesia: Where Did The Billions Go?

At first, it just looked like shoddy bookkeeping. But as auditors pored over Bank Indonesia's books in December, they kept coming across odd entries. According to the records, large sums of "assistance" had gone to "affiliated parties" of the central bank about two years earlier. As the financial sleuths from KPMG International and the Indonesian government dug deeper, their suspicions grew. At a time when banks at home were in desperate peril, the probe showed that substantial central bank funds had gone to an affiliate in the Netherlands. The Dutch bank then bought securities in Indonesian institutions, raising questions whether central bank funds were used inappropriately. What's more, auditors could not find records for millions in gold deposits at the central bank.

Investigators are still following tortuous paper trails to find out what really happened at Bank Indonesia during the chaotic years before and immediately after the 1998 downfall of President Suharto. Although the Finance Ministry is backing off of earlier suspicions that the central bank is billions of dollars in the hole, audits run by the government and the International Monetary Fund have raised questions about the institution's handling of funds intended to shore up local banks. The Indonesian attorney general is not involved in the probe, and no criminal charges have been filed. But Indonesia's Supreme Audit Board is launching another investigation, and Indonesian President Abdurrahman Wahid is pushing for the central bank governor's resignation.