Pandora Papers: Dig deep

Thursday 7th October, 2021

The Pandora Papers revelations have eclipsed all other issues in this country. The Commission to Investigate Allegations of Bribery or Corruption is expected to summon former Deputy Minister Nirupama Rajapaksa and her husband Thirukumar Nadesan exposed by the International Consortium of Investigative Journalists (ICIJ) over controversial offshore financial transactions. President Gotabaya Rajapaksa is reported to have ordered the investigation.

It is heartening that the Pandora Papers investigation has had the desired impact here. Opposition Leader Sajith Premadasa has demanded that a Parliamentary Select Committee (PSC) be appointed to probe the revelations made by the ICIJ. A thorough investigation must be conducted. The Indian government has ordered a multi-agency probe into the ICIJ revelations, according to a report we publish today. The probe involves the Central Board of Direct Taxes (CBDT), Enforcement Directorate (ED), Reserve Bank of India (RBI), and Financial Intelligence Unit (FIU). Pakistan has also undertaken to do so because several members of Prime Minister Imran Khan’s Cabinet have been exposed for their shady offshore financial transactions.

Other countries ought to do likewise. The clandestine operations disclosed by the Pandora Papers have cost many countries across the globe trillions of rupees in tax revenue. The rich are getting richer and the poor poorer owing to the existence of tax havens, where enormous amounts of wealth, mostly amassed illegally, are hidden.

In this country, issues crop up at an amazing rate, and nobody can keep track of them. So, the Opposition will have to stay focussed, and ratchet up pressure on the government to ensure that the promised probes are conducted. But it is doubtful whether Parliament will be able to hold an impartial probe. Most of the PSC investigations have been farcical. The one into the Treasure bond scams serves as an example; it was a case of a mountain in labour writ large. The government members of that PSC were all out to save their leaders, and the final committee report became a total disappointment; it did not reveal the mastermind behind the mega racket. The same is true of the Presidential Commission of Inquiry that probed the bond scams. It also obfuscated the issue, and produced a report, which also did not name the mastermind.

However, the Opposition’s call for a parliamentary probe is welcome for want of a better alternative. If a PSC is ever appointed, the public will at least be able to see how the government members attempt a cover-up. Ideally, Sri Lanka, too, should conduct a multi-agency probe into the ICIJ revelations. We, however, must not lose sight of the need for legal mechanisms to prevent funds being smuggled out of the country.

Shell companies have been on a roll all these years because the developed nations allow their properties to be owned by anonymous foreign firms. If the affluent countries legislate for the identities of the owners of assets on their soil to be disclosed, the problem of surreptitious investments could be tackled effectively. BBC informs us that the UK published draft legislation to that effect about three years ago, but it has not been presented to MPs. Will Britain pass the proposed law and take the lead in fighting tax dodgers and money launderers, compelling other countries to follow suit?

The ICIJ has sifted through about 12 million financial documents, but there is reason to believe it has been scratching the surface of the problem of offshore transactions. It has received documents only from 14 companies and there are many other outfits. We fervently hope that more confidential documents will be leaked to the ICIJ, and more Sri Lankans exposed.

It is obvious that colossal amounts of money stolen from the Sri Lankan public have found their way into offshore accounts of politicians and their family members and cronies. This money must be traced and brought back. But we will be able to identify the crooks without waiting for investigations by the ICIJ, etc., if a local probe is conducted into the assets of the politicians and their kith and kin. Most of them were penniless when they entered politics and did not own even bicycles, but today they are living in the lap of luxury. Let them be made to account for their wealth.