Suharto Summoned to Bailout Hearing

Indonesia’s former leader Suharto was summoned to appear before a parliamentary committee investigating the channeling of funds to insolvent banks during his presidency, a lawmaker said. Didi Supriyanto, a member of the committee, said parliament wants to know why Bank Indonesia, the central bank, injected billions of dollars into several ailing banks in 1998 when there was little chance of recovering much of the money. Indonesia’s economy collapsed in 1997. In an effort to halt a run on failing banks, the government directed Bank Indonesia to try to prop them up. Much of that support was allegedly directed to ineligible banks. Bank Indonesia officials and other senior bureaucrats have told the committee that they were ordered by Suharto to spend the money. Suharto has denied any wrongdoing.