Indonesia president's in-law fingered in MP payments

JAKARTA (Reuters) - A former governor of Indonesia's central bank has implicated an ex-colleague, who is President Susilo Bambang Yudhoyono's relative by marriage, in a scandal involving payments to members of parliament.

The Bank Indonesia scandal is potentially embarrassing for Yudhoyono, who promised to tackle endemic graft in Southeast Asia's biggest economy when he was elected in 2004.

Several officials have been arrested for graft over the past year as the anti-corruption agency stepped up its investigations, including a high-profile case involving Bank Indonesia, the central bank.

Former Bank Indonesia governor Burhanuddin Abdullah and two colleagues are suspects in a graft case concerning a foundation linked to the central bank. The foundation was alleged to have paid about $10 million to members of parliament and to cover the cost of legal assistance for central bank officials in 2004.

Abdullah, who has denied any wrongdoing, told a court on Wednesday that former deputy governor Aulia Pohan, whose daughter is married to Yudhoyono's eldest son, was in charge of operational activities at the time.

When asked by the judge who was responsible for making the payments to members of parliament, Abdullah said, "that's based on a decision by deputy governor Aulia Pohan."

Pohan, who has not been named a suspect in the case and who testified as a witness on Tuesday, told Reuters that as coordinator of the central bank's social and community relations committee, he was not responsible for handling payments to the parliament or for the legal assistance.

"The responsibility of the coordinator was only to approve the request that has been submitted by the chairman and the deputy chairman," he said in telephone text message to Reuters, sent via a central bank spokeswoman on Thursday morning.

"The amount that was approved by the board of governors' meeting to be distributed to the parliament was 31.5 billion rupiah ($3.38 million)," he added in the text message.