August 20, 2020, parliament: President Gotabaya Rajapaksa delivers his policy statement.
By Shamindra Ferdinando
Lawmaker Gajendrakumar Ponnanbalam, 46, on August 21, in Parliament, alleged that the Tamil community, in the North-East, had been subjected to genocide, Sri Lanka committed war crimes during phase IV of the war and that they wanted international accountability.
Ponnambalam deviated from the Geneva Accountability Resolution, co-sponsored by the previous UNP-SLFP/UPFA coalition, in Oct 2015. That resolution was meant to set up hybrid war crimes courts, comprising local and foreign judges, in terms of a tripartite agreement, involving Sri Lanka, the US and the four-party Tamil National Alliance (TNA).
Having represented the LTTE mouthpiece, the TNA twice, in Parliament, in 2001 and 2004, Ponnambalam addressed Parliament, last week, as the leader of the Ahila Illankai Tamil Congress (AITC), a constituent of the Tamil National People’s Front (TNPF). The TNPF, established in 2010, had never been previously represented in Parliament, though it contested both the 2010 April and 2015 August parliamentary polls. In addition to Ponnanbalam, the TNPF secured one National List slot. Ponnambalam accommodated Selvarasa Gajenthiran, who quit TNA, along with him in 2010, on the National List.
Angajan Ramanathan, elected to Parliament on the Sri Lanka Freedom Party (SLFP) ticket, from the Jaffna electoral district, was in the chair at the time Ponnambalam delivered his explosive statement. Former UPFA National List member Ramanathan is the Deputy Chairman of Committees.
Gajendrakumar dismissed an attempt made by the State Minister of Provincial Councils and Local Government, retired Rear Admiral Sarath Weerasekera, to intervene. In fact, the Sri Lanka Podujana Peramuna member Weerasekera was the only one to make an attempt to challenge Ponnambalam, in Parliament, on that day. The former Navy Chief of Staff was not successful. On the previous day, Weerasekera wanted to respond to C.V. Wigneswaran, leader of the Thamizh Makkal Kootani (TMK), though was asked by his party not to, as only party leaders addressed Parliament, during the inaugural session.
GP, Wiggy mount frontal assault
Both Ponnambalam and Wigneswaran represented the R. Sampanthan-led TNA earlier. Ponnambalam quit the TNA, in March 2010, having successfully contested the Jaffna district twice, in 2001 and 2004, with the blessings of the Liberation Tigers of Tamil Eelam (LTTE). At that time, TNA nominations, as well as the National List, were subjected to the LTTE’s approval. Former Supreme Court Judge Wigneswaran functioned as the first Chief Minister of the TNA-run Northern Province, during Mahinda Rajapaksa’s tenure as the President.
The TNA stood solidly with the LTTE as it declared Eelam War IV, in August 2006, with simultaneous attacks on the Army, both in the Northern and Eastern Provinces.
Ponnambalam attacked President Gotabaya Rajapaksa’s policy statement. The lawmaker targeted the following section in particular: “It is equally important to precisely interpret the mandate given by the people. We respect the trust that the people have placed in me and the Prime Minister and the newly elected people’s representatives. We have a clear understanding of the expectations with which the people gave such a powerful mandate to the government. We will leave no room for such expectations to be dashed for any reason. It should always be remembered that the prime responsibility of a people’s representative is to serve the public. We will be sensitive to fulfilling the needs of the people, keeping in mind that all these positions are responsibilities and not privileges.”
Ponnanmalam declared that President Gotabaya Rajapaksa’s mandate (2019 November presidential and 2020 August parliamentary polls) did not extend to the North-East region. Ponnambalam depicted the vote received by all Tamils, including SLFP’s Ramanathan and the Eelam People’s Democratic Party (EPDP) Douglas Devananda, elected to the new Parliament, as one that overwhelmingly endorsed self-determination of the Tamil speaking people. Ponnambalam justified international intervention on the basis of the Tamil community being deprived of the security it deserved.
Declaring them (Tamil lawmakers) received a mandate for Tamil rights to be recognized, Ponnambalam declared: “two nations exist in this country.”
Int’l intervention justified
“Sovereignty can never be a defence. This country has gone through a war and the whole world says that heinous crimes have been committed and the state is the number one accused party,” Ponnambalam declared, adding “Under no circumstances can any President, or any country, for that matter, try to hide behind the concept of sovereignty, to prevent accountability for heinous crimes. The victims of these heinous crimes stand as Tamils… the major victims stand as Tamils and they have consistently said that genocide has been committed and that they want international accountability.”
When Ponnambalam went on and on repeating war crimes allegations, in Parliament, former Presidents and Commanders-in-Chief, Mahinda Rajapaksa and Maithripala Sirisena, as well as war-winning Army Chief Field Marshal Sarath Fonseka, were present. Opposition Leader Sajith Premadasa, too, was present.
It would be pertinent to ask lawmaker Ponnambalam whether, as a member of the TNA, he endorsed the party’s decision to vote for the then common presidential candidate General Sarath Fonseka at the January 26, 2010 presidential election. Did the TNA decision to join the UNP-led coalition, comprising the Janatha Vimukthi Peramuna (JVP), the Sri Lanka Muslim Congress (SLMC), All Ceylon Makkal Congress (ACMC) et al unanimously approved by all constituents of the TNA?
Why North, East endorsed Fonseka?
Now that Ponnambalam reiterated genocide allegations, he owed an explanation why the Tamil community overwhelmingly endorsed Fonseka at the presidential election. Fonseka comfortably won all electoral districts, in the Northern and Eastern Provinces, though the South ensured Mahinda Rajapaksa secured a second term, with a staggering 1.8 mn majority. Mahinda Rajapaksa polled 6,015,934 votes (57.88%) whereas Fonseka received 4,173,185 votes (40.15%). Fonseka comfortably won the predominantly Tamil electoral districts of Jaffna, Vanni, Batticaloa, Trincomalee, Digamadulla and Nuwara-Eliya.
The 2010 presidential election was held less than a year after the armed forces eradicated the LTTE. Blindly accusing Sri Lanka of war crimes, and genocide, seemed ridiculous, after having voted for the very man who conducted the ground offensive that brought the LTTE to its knees, in May 2009.
Accusing the Sri Lankan state of attacking Tamils, Ponnambalam justified international intervention here. But not so much as even a word about many Tamils, including so many moderates who were butchered by the terrorists in cold blood like internationally respected jurist and TULFer Dr Neelan Thiruchelvam or even a person like TULF Leader Appapillai Amirthalingam for merely ruffling the feathers of the LTTE. Both Ponnambalam and Wigneswaran conveniently forgot how India transformed a low level insurgency, in the North, to an unprecedented terrorist campaign.
Interpreting ‘own citizens’
Ponnambalam advised President Gotabaya Rajapaksa, who, during his 20-year service as a frontline combat officer of the Sri Lanka Army, fought Indian-sponsored terrorist groups. “What the President must also realize is that when it comes to international relations, sovereignty comes with a certain baggage, one of the most cornerstone principles on which sovereignty will be compromised is if within the country the state does not protect its own citizens, or, even worse, if, within the country, the state attacks its own citizens,” Ponnambalam declared.
Perhaps, other members of Parliament should remind Ponnambalam that the LTTE, as well as half a dozen other Tamil groups, that consisted of Tamils who waged war on the State. Fighting among Tamil groups claimed the lives of hundreds before they all, except the LTTE, renounced violence, in 1990. Those who had been categorized as ‘own citizens’ also killed over 1,300 Indian servicemen and wounded over 2,500 (Oct 1987-January 1990) and blew up one-time Indian Prime Minister Rajiv Gandhi.
Former Indian High Commissioner in Colombo J.N. Dixit, didn’t mince his words when he admitted direct Indian involvement in destabilizing Sri Lanka in ‘Makers of India’s Foreign Policy: Raja Ram Mohun to Yashwant Sinha.’ India paid a terrible price for destabilizing Sri Lanka. Indian-trained Sri Lankan terrorists tried to capture power, in the Maldives, in Nov 1988. The Tamil community cannot absolve itself of the culpability for the mass killings perpetrated in the name of ‘Eelam.’ Where were those elected representatives of the Tamil people when the LTTE used the Vanni population as human shield in its last bastion Mullaitivu?
Perhaps, those propagating war crimes allegations, in Parliament, should peruse Australia-based ex-terrorist Niromi de Soyza’s ‘Tamil Tigress’, first published in 2011, two years after Sri Lankan military finished off the LTTE on the banks of the Nanthikadal lagoon. S. Attanayake of Kottawa, Pannipitiya, sent the writer ‘Tamil Tigress’ having read the Midweek piece, titled ‘Chargie’s predicament inspires novel, highlights Lanka’s pathetic response to external threats,’ published on March 18, 2020. It was a comment on award-winning author Sena Thoradeniya’s ‘Nimala Mala-Miya Giya Soldaduwekuge Nomiyena Kathawa’ (Immortal Story of a Dead Soldier). Attanayake quite rightly guessed the writer hadn’t read ‘Tamil Tigress’ hence sending it by post soon after the government lifted the ‘Covid lockdown.’
GP’s entry into TNA politics
Qualified as a barrister-at-law, in the UK, in 1997, Gajendrakumar Ponnambalam received Sri Lanka qualification as an attorney-at-law, two years later, before entering active politics, in the wake of his father Kumar Ponnambalam’s assassination, in early January 2000.
Gajendrakumar Ponnambalam’s All Ceylon Tamil Congress/Ahila Illankai Tamil Congress. Its roots can be traced to his legendary grandfather G.G. Ponnambalam QC, who was a colossus as a lawyer and politician. ACTC had been among the four parties which formed the TNA, in Oct, 2001, at the behest of the LTTE. Constituents included, in addition to Ahila Illankai Tamil Congress, the TULF (Tamil United Liberation Front) and two former terrorist groups TELO (Tamil Eelam Liberation Organization) and the PLOTE (People’s Liberation Organisation of Tamil Eelam). The TNA functioned as the political wing of the LTTE. The TNA had been subservient to the LTTE to such an extent; it recognized Prabhakaran as the sole representative of the Tamils.
The TNA remained mum when the sole representative quit the negotiating table, in April 2003, to pave the way for the presidential takeover of ministries and, subsequently, the sacking of the UNP government. Kumaratunga called for early general election, in April 2004. The LTTE unleashed violence against those who dared to challenge the TNA in the then temporarily merged North-East region. Thanks to the LTTE intervention, the TNA secured 22 seats. Having won the lion’s share of seats in the North-East region, the TNA-LTTE combine, in Nov 2005, ordered Tamils to boycott the presidential election. The move was meant to ensure UNP leader Ranil Wickremesinghe’s defeat. The UNPer lost by 186,000 votes. Those who allege the Rajapaksa Camp bribed the LTTE to disrupt election in the North and East to Mahinda Rajapaksa’s advantage should explain whether the LTTE received money from them. As the TNA announced the polls boycott, on behalf of the LTTE, it owed an explanation to the public. Did the LTTE receive money from the Rajapaksa Camp?
The truth is that the LTTE and the TNA really believed they could take care of Mahinda Rajapaksa far more easily than Wickremesinghe. Having dug its own grave, the LTTE faced a relentless three-year military onslaught, once it initiated a military offensive in the second week of August 2006.
The armed forces eradicated the LTTE, in May 2009. In the following year, the TNA backed the very man who led the campaign against the LTTE at the presidential poll.
Accusations pertaining to war crimes and genocide, in Parliament, should be examined against the backdrop of the TNA losing political clout, following the poor performance at the general election. The TNA parliamentary group now comprises 10 lawmakers. In the last Parliament, the TNA group consisted of 16. The TNA won 16 seats when it contested the general election, for the very first time, in 2001. At the 2004 general election, the LTTE threw its full weight behind the TNA to enable the coalition to win 22 seats, 14 seats in 2010 and 16 in 2015. In spite of the setback suffered by the TNA, Gajendrakumar Ponnambalam and Wigneswaran are likely to go flat out against the government.
In the wake of President Gotabaya Rajapaksa presenting his policy statement, a section of the much-depleted TNA met the Indian High Commissioner. The meeting took place on Friday, August 21. The TNA, in a brief statement issued on the same day, quoted Indian High Commissioner Gopal Bagley as having assured India’s continuing commitments to finding a resolution to the Tamil national question in Sri Lanka. The TNA delegation consisted of R. Sampanthan Mavai Senathirajah, Dharmalingam Siddarthan, Selvam Adaikalanathan and M.A. Sumanthiran. ITAK (Illankai Tamil Arasu Kadchi) leader Mavai Senathirajah is no longer an MP having been defeated at the August 05 general election.
It would be interesting to see whether Gajendrakumar Ponnambalam and Wigneswaran received invitations from the Indian High Commission.
Over 100 LTTE cadres in
Let me finish this piece by reminding how the likes of Wigneswaran propagated lies. Minister Vasudeva Nanayakkara’s brother-in-law, Wigneswaran, chided the government over the July1983 violence, while insisting the need to consult India, if the government wanted to do away with the 13th Amendment, introduced in line with the Indo-Lanka Accord. Wigneswaran should know that the July 1983 violence wouldn’t have happened if not for India providing the LTTE expertise to wipe out a mobile military patrol. India sponsored terrorism here to create the conditions required for direct military intervention. The incumbent government should set the record straight, at least now.
Sri Lanka never took tangible measures against those who propagated lies as part of an overall strategy to ruin the country. Some cannot stomach the LTTE’s annihilation, on the Vanni east front, over a decade ago. Wigneswaran is one such person. Wigneswaran, and a section of the Tamil media, in August 2016, accused the military of killing over 100 LTTE combatants, in custody, by poisoning them. The PTI and NDTV were among the international media which reported unsubstantiated allegations.
Accusers placed the number of such deaths at 104. Accusations were made while the U.S. Pacific Command’s ‘Pacific Angel’ exercise was underway, in the Jaffna peninsula.
Wigneswaran brashly declared that the U.S. Air Force’s medical team, in Jaffna, would examine the former rehabilitated LTTE cadres, who, he alleged, had fallen sick because they were injected with poisonous substances, at government detention, or rehabilitation camps.
The then State Defence Minister Ruwan Wijewardene and Health Minister Dr. Rajitha Senaratne dismissed the vicious accusations. Wijewardene offered the international community access to rehabilitation facilities. What the Minister didn’t realize was that by August 2016, the vast majority of ex-LTTE combatants had been released.
The US conveniently refrained from making its position clear on Wigneswaran’s claim when the writer raised the issue with the US Embassy in Colombo. There had never been such a claim, before Wigneswaran sought to humiliate Sri Lanka with it. It would be pertinent to mention that one-time LTTE subordinate, the TNA, backed common candidate Maithripala Sirisena, at the 2015 presidential poll, having earlier supported Gen. Sarath Fonseka at the previous poll. On both occasions, the TNA delivered all northern and eastern electoral districts to Fonseka and Sirisena, who contested on the New Democratic Front (NDF) ticket with the ‘Swan’ as its symbol. The TNA did the same for Sajith Premadasa, in the North and the East at the last presidential poll, though the South overwhelmingly defeated the UNPer.
In answer to several questions The Island posed, regarding ex-LTTE cadres being poisoned, the US Embassy said: “Operation Pacific Angel is providing assistance, based on the specific needs of the local communities. Among the nearly 70 members of this multilateral assistance programme – including some medical staff and engineers from Bangladesh, Nepal, and the Maldives, as well as the United States – are over 40 doctors, providing basic medical services: dental procedures; physical therapy; general medical assistance; and optometry. These are the only services being provided.”
The writer asked the US Embassy whether it could confirm that US Pacific Command personnel, conducting medical tests on ex-LTTE cadres, allegedly poisoned by the previous government; whether they would be moved to overseas medical facility for further tests; whether the GoSL had been informed of the development; when did the TNA request the US intervention and whether the US military had conducted similar tests in other countries. For obvious reasons, the US refrained from responding to The Island queries.
The five-day ‘Operation Pacific Angle’ was launched, in Jaffna, by the then US Ambassador in Colombo Atul Keshap.
The New Indian Express quoted Wigneswaran as having said that the US Air Force’s medical team would examine ex-LTTE cadres who had been sick because they were injected with poisonous substances by the Sri Lankan armed military while they were undergoing detention, or rehabilitation. Wigneswaran, according to the New Indian Express, had told the NPC (Northern Provincial Council) that he had mentioned the plight of the former combatants in his conversation with the US Ambassador, Atul Keshap, and asked if the USAF team could examine them and give an independent report.
Wigneswaran’s allegations died a natural death. The TNA, or the US, never discussed the issue publicly. But, such calculated lies caused massive damage.
ICRC on genocide accusation
A leaked cable, dated July 15, 2009, signed by the then Geneva-based US Ambassador, Clint Williamson, cleared the Sri Lankan Army (SLA) of crimes against humanity during the Vanni offensive. The cable addressed to the US State Department, was based on a confidential conversation Ambassador Williamson had with the then ICRC head of operations for South Asia, Jacque de Maio, on July 9, 2009. Ambassador Williamson wrote: “The army was determined not to let the LTTE escape from its shrinking territory, even though this meant the civilians being kept hostage by the LTTE were at an increasing risk. So, de Maio said, while one could safely say that there were ‘serious, widespread violations of international humanitarian law,’ by the Sri Lankan forces, it didn’t amount to genocide. He (Maio) could cite examples of where the army had stopped shelling when the ICRC informed them it was killing civilians. In fact, the army actually could have won the military battle faster with higher civilian casualties, yet chose a slower approach which led to a greater number of Sri Lankan military deaths. He concluded, however, by asserting that the GoSL failed to recognize its obligation to protect civilians, in spite of its approach resulting in higher military casualties.” Sri Lanka never properly used available information, including Wikileaks revelations, pertaining to Sri Lanka and Lord Naseby’s disclosure to counter lies. The travel ban slapped on Lt. Gen. Shavendra Silva, as well as Field Marshal Sarath Fonseka, by the US is evidence of Sri Lanka’s continuing failure to set the record straight.
How bankruptcy paves way for exploitation of Sri Lanka
Mismanagement of cash cow SLPA, where still it’s carry on as usual
By Shamindra Ferdinando
The United States is keen to further enhance and consolidate its role in Sri Lanka. The current turmoil that has been caused by waste, corruption, irregularities, mismanagement of the economy over the years as well as a spate of ill-advised decisions taken by the incumbent administration would facilitate the US strategy here. The global fuel and food crises caused by Russia rushing into a quagmire in Ukraine, essentially tailor made by the West, as happened to its predecessor the Soviet Union in Afghanistan earlier, has further debilitated the Sri Lankan and many other economies.
The failure on the part of the ruling SLPP and the Opposition to reach a consensus regarding a common action plan to face the daunting economic challenges, has assisted the U.S. and common ‘Quad’ approach towards Sri Lanka. The organization consists of the U.S. Japan, Australia and India, the last now more or less a reluctant bride.
The U.S. wants to strengthen Sri Lanka’s accounting and auditing sectors as part of its overall measures to improve the public sector here. Other ‘Quad’ members are pursuing combined as well as individual strategies pertaining to Sri Lanka. India is now in a position to dominate Sri Lanka in every aspect. The push to expand network of Lanka IOC service station is a case in point.
Speculation is rife of New Delhi seeking to further enhance its share of the oil market here in a situation of utter economic turmoil caused by unprecedented shortages.
The recent announcement that the USAID (U.S. Agency for International Development) would partner the Institute of Chartered Accountants of Sri Lanka (CA Sri Lanka) and the Association of Public Finance Accountants of Sri Lanka (APFASL) to toughen Sri Lanka’s accounting and auditing sectors was amidst the worst ever economic turmoil. The US project, according to a statement issued by the U.S. Embassy in Colombo, is meant to train approximately 600 public sector accountants and audit professionals and 1,200 officers on IT applications and other platforms that support strategic decision-making.
U.S. Ambassador Julie Chung declared at the launch of the project the partnership with CA Sri Lanka and APFASL would contribute towards greater accountability in the public sector. The Embassy, in a statement issued on June 15, 2022, quoted Chung as having said that as one of Sri Lanka’s longstanding development partners, the U.S vision was to help the country to emerge from crises stronger than before.
The statement also quoted Sanjaya Bandara, President of CA Sri Lanka, as having said that “Strong public financial management is very critical for Sri Lanka to achieve its long-term goals. President of APFASL V. Kanagasabapathy profusely thanked the USAID for the recognition of its efforts. The U.S. Embassy quoted Kanagasabapathy as having said that APFASL’ vision was to lead the public financial management to excellence while helping the sector to continue to play a pioneering role in Sri Lanka.
The countrywide U.S. project, according to the statement, is meant to provide a framework for the preparation and presentation of financial statements in compliance with international best practices for quality financial accounting and reporting. Having published the US statement, the writer asked the Embassy whether it would be possible to know the total cost and duration of the project and who would receive the funding?
The Island received the following response: “This initiative is a series of trainings supported by the United States. The training will be attended by public sector accountants and audit professionals to strengthen oversight and accountability capacity in Sri Lanka.”
The Island again asked the U.S. Embassy whether it would be possible to know the total cost of the project. We received the following second response: “This initiative includes 24 training programmes over the course of two years. Training programmes will take place in all 9 Sri Lankan provinces.”
After having thanked the U.S. Embassy, The Island once again repeated the question how much the project would cost the US? The Embassy didn’t respond to that query. That was nearly two weeks ago.
Question mark over 2016 US project
The latest project can be examined taking into consideration the high profile USAID funded three-year project launched in late Nov. 2016. Budgeted at USD 13,000 mn (Rs 1.92 bn), the project launch that took place in Parliament under the auspices of the then Speaker Karu Jayasuriya and USAID Mission Director Andrew Sisson, the gathering was told the Strengthening Democratic Governance and Accountability Project (SDGAP) would improve strategic planning and communication within government and Parliament, enhance public outreach, develop more effective policy reform and implementation processes, and increase political participation of women and underrepresented groups in Parliament and at local levels.
Had that project achieved stated goals, Sri Lanka wouldn’t be in the current predicament. It would be pertinent to mention that the U.S. finalized the project over eight months after the then Central Bank Governor Singaporean national Arjuna Mahendran perpetrated the second far bigger Treasury bond scam. So were all those American efforts nothing more than a smokescreen for other agendas?
The CBSL perpetrated the first scam in February 2015, just few weeks after the US-backed campaign installed Maithripala Sirisena as the President, which they shamelessly crowed about publicly with none other than then Secretary of State John Kerry announcing it to the world. Mahendran carried out the second bond scam in late March 2016, half a year after the UNP won the general election.
The release of the unedited video footage of the examination of public enterprises undertaken by the parliamentary watchdog, the Committee on Public Enterprises (COPE) under the leadership of Prof. Charitha Herath MP has exposed unbridled waste, corruption, irregularities and mismanagement of state enterprises. Unfortunately, the media and the civil society hadn’t taken advantage of the availability of such video footage released by the Parliament to educate the public. The press releases issued by the Parliament on proceedings at the COPE, COPA (Committee on Public Accounts) and COPF (Committee of Public Finance) quite clearly helped the media, but video footage provided much clearer picture of the developments taking place.
The video footage of the Sri Lanka Ports Authority (SLPA) top management appearing before the COPE on June 22, 2022 is a case in point. The proceedings revealed not only a pathetic state in public sector finance but the failure on the part of the executive, legislature and the judiciary to address these issues at hand. Prof. Charitha Herath flanked by Auditor General W.P.C. Wickramaratne and Secretary to the COPE Nishanthi Wickramasinghe examined the top SLPA management. Ports and Shipping Secretary K.D.S. Ruwanchandra, flanked by Chairman, SLPA Dr. Prasantha Jayamanna, Director J.R.U. de Silva and Chief Financial Officer, Ports and Shipping Ministry Sandhya Pushparani. They were on the first row. Isuru Balpatabendi, Director sat in between Chairman, Jaya Container Terminal Attorney-at-Law Lakmal Ratnayake, and its Managing Director Upul Jayatissa. Director General Customs Maj. Gen. (ret.) G.V. Ravipriya also sat on the second row as a Director of the cash cow.
The COPE didn’t raise any queries from Isuru Balpatabendi nor did he offer any explanations. Balapatabendi’s presence among the eight-member Board of Directors should be examined taking into consideration of him being the Secretary of the Bar Association of Sri Lanka (BASL). Having offered solutions to overcome the current political, economic and social crisis, the BASL cannot turn a blind eye to continuing waste, corruption, irregularities and mismanagement in the public sector. The SLPA can be a case study for the BASL.
The bottom line is that Sri Lanka is currently in such a desperate situation the US may find the environment conducive for a fresh attempt to force SOFA (Status of Forces Agreement) and MCC (Millennium Challenge Corporation) on Sri Lanka. The US succeeded in securing Sri Lanka’s consent for ACSA (Access and Cross Servicing Agreement) in Aug 2017. Interestingly both Ranil Wickremesinghe and Maithripala Sirisena who approved ACSA that gave US military access to Sri Lanka are now with President Gotabaya Rajapaksa’s government.
Importance of internal audit
At the onset of the COPE proceedings, Prof. Herath sought an explanation as regards the status of the internal audit. Obviously, Chief Internal Auditor, SLPA, Gayani Liyanage responses as well as that of the SLPA Chairman to specific questions didn’t appease Prof. Herath, who asserted that poor internal audit could be one of the reasons for the current issues. Prof. Herath asked the SLPA Chairman not to assign tasks to the 53-strong internal audit unit outside their legitimate duties.
Herath raised several contentious issues with COPE members Patali Champika Ranawaka (PCR), Madura Vithanage, Jagath Pushpakumara, D.V. Chanaka, Eran Wickramaratne and Premanath C. Dolawatta making valuable contributions. PCR was particularly spot on. The former JHU heavyweight dealt firmly and expertly with contentious issues while Vithanage targeted the Finance.
The following are the main points of contention:
(1) The loan obtained from China to build Hambantota port has been removed from all government financial statements. As at Dec 31, 2021, Sri Lanka owed China Rs 165.4 bn (USD 1.89 bn). USD 1.2 bn received from China for 99-year lease of the strategic port hadn’t been utilized to settle the loan. Instead, the USD 1.2 bn had been spent though the COPE was not told of the allocation of USD 1.2 bn. The Treasury now services the loan. Prof. Herath requested Ports and Shipping Ministry Secretary Ruwanchandra to submit a comprehensive report on this matter.
(2) The COPE sought an explanation from the SLPA why the state enterprise failed to market the Hambantota port the way the Chinese did after the finalization of the USD 1.2 bn agreement on the 99-year-lease on the commercially strategic port.
(3) Massive losses suffered as a result of procurement of a stock of oil at a cost of USD 24.3 mn (Rs 8,000 mn) that had to be sold for USD 3.5. COPE questioned Niroshan Siriwardena, Managing Director, Magampura port over the circumstances the outfit unwisely utilized the loan obtained from a bank on the advice of a consultant. COPE recommended the SLPA and the Secretary Ports and Shipping Ministry to take legal measures against the consultant. Proceedings revealed Magampura port operation is nothing but an absolute waste of public funds. The failure on the part of those responsible to take tangible action in this regard stressed.
(4) The inordinate and continuing delay in equipping the ECT (East Container Terminal) thereby giving advantage to the China owned CICT (Colombo International Container Terminal) and SAGT (South Asia Gateway Terminal). The SLPA owned 15 percent each of both CICT and SAGT. The negligence and the failures on the part of those responsible for transformation of the ECT seemed, in a way, deliberate. The parliamentary watchdog questioned the possibility of some interested party purposely undermining the operation. The fault seemed to be at the level of Cabinet of Ministers as well as successive SLPA administrations. The issue of taking delivery of gantry cranes before constructing specific positions they were to be installed shocking and disappointing. The COPE took notice of the fact that such equipment took one and half years to be built after an order was placed. It transpired that the cost of the civil works component was USD 198 mn (65% local currency) and equipment installation cost USD 282 mn. However, the installation has been delayed due to the failure on the part of the SLPA’s state bank to provide the required financing. The shocking revelation that the ECT hadn’t been expanded for five years after the completion of the 400 m stretch is evidence that successive governments failed public expectations. Lawmaker PCR emphasized the pivotal importance of revisiting the ECT project as the ground situation has changed. The MP reminded the SLPA and the COPE of the government’s admission of bankruptcy.
(5) Dispute over the SLPA’s stated profits. The SLPA challenged the Auditor General’s estimate that the state enterprise earned Rs 45 bn in 2021. The SLPA placed annual profits at Rs 62 bn. The COPE also made reference to the SAGT returning to the SLPA in 2019 and the government’s responsibility in that regard.
(6) The loss of revenue as well as foreign shippers’ faith in the SLPA as a result of the strike launched on June 10, 2020.
(7) Construction of Adani Group-led CWIT (Colombo West International Terminal). Comparison of the CICT and the SAGT workforce with that of the SLPA and the sharp difference in the number of the private sector workers and the SLPA. The SLPA seemed a law unto itself with the disclosure that the highly profitable venture operated to a certain extent outside the purview of the Management Services Department though the total number of employees remained well under the stipulated figure 9,900. The COPE stressed the need to ensure that the SLPA under any circumstances didn’t go beyond the stipulated number of workers. The current work force comprised 9,300.
(8) Rohitha Abeygunawardena who served as the Ports and Shipping Minister of President Gotabaya Rajapaksa till April 2020 raised the contentious issue of recruitment beyond the approved cadre. The lawmaker stressed the need to compare the private sector operations and that of the SLPA. The COPE was told that though the total approved cadre hadn’t been exceeded, recruitment has been carried out in an irregular and extremely shoddy manner.
(9) Big question mark over the transfer of just Rs. 600 mn out of 69,686 mn profits (2016-2021) period and the pathetic failure on the part of the Finance Ministry to address the issue.
(10) Absence of a cohesive and efficient system to charge CICT and SAGT for certain services rendered by the SLPA.
(11) Growing overtime Bill with 2021 recording a staggering Rs 5.8 bn in extra payments. Scandalous disclosure some workers earned overtime for 400 hours and unskilled work assistants numbering 1,500 continued to be a heavy burden.
(12) Controversy over so-called collective agreement that ensured salary increase every three years. The COPE stressed the need to have guidelines formulated by the Management Services Department to prevent exploitation of collective agreements as the process threatened financial stability.
The SLPA, in spite of being a profit making state enterprise, remains in an utterly chaotic situation. The SLPA hasn’t been a burden on the taxpayer though the national carrier SriLankan, the CEB and the CPC bled the country dry. But casual examination indicates regardless of the financial status a section of public servants continued to enjoy perks and privileges while the entire country suffered as a result of local and some external factors beyond Sri Lanka’s control.
The Bonhomie of the Ages
By Lynn Ockersz
Ignoring aching hearts and limbs,
And unmindful of days passing,
The men slumped in their Tuk-Tuks,
Continue their lonesome vigil,
In queues snaking into the distance,
For those never-coming cans of fuel,
Promised by smooth-talking Sires,
That could help fetch a few more coppers,
And delay the onset of starvation,
But thanks to the age-old wisdom,
Handed to them by their humble elders,
The only inheritors of the pristine Dhamma,
The men are not bereft of compassion,
So much so, they share the frugal meals,
The Sweat of their Brows has yielded.
House watchdog committees ascertain culpability of FM, Monetary Board
By Shamindra Ferdinando
The Committee on Public Finance (COPF), inquiring into financial meltdown recently, called several former and serving officials to ascertain their culpability as well as that of the institutions they served for the developing crisis.
Among them were former Governors of the Central Bank Prof. W.D. Lakshman (Dec 2019- Sept 2021), and Ajith Nivard Cabraal (Sept 2021-March 2022), Secretary to the President Dr. P.B. Jayasundera (Nov 2019-Dec 2021) and Treasury Secretary S.R. Attygalle (Nov 2019-April 2022), Sanjeeva Jayawardena P.C. (received appointment as a member of the Monetary Board in Feb 2020) and Dr. Ranee Jayamaha (the retired CB Deputy Governor received appointment to the Monetary Board in June 2020). It would be pertinent to mention that Attygalle earlier served a short stint as the Treasury Secretary (Ministry of Finance) between Oct. 31, 2018 and Dec. 18, 2018 during the constitutional coup staged by ex-President Maithripala Sirisena.
The term of office of an appointed member of the Monetary Board is six years and in the event of vacation of office by the appointed member, another person shall be appointed in his or her place to hold the office during the unexpired part of the term of office.
The COPF meeting took place on June 08. Dissident SLPP lawmaker Anura Priyadarshana Yapa chaired the meeting. CBSL Governor Dr. Nandalal Weerasinghe and Finance Secretary Mahinda Siriwardana, too, were present.
Attygalle didn’t mince his words when he squarely blamed the then Prime Minister Mahinda Rajapaksa, who also served as the Finance Minister (Nov 2019 to July 2021) for the controversial fiscal policy that had ruined the country. Attygalle declared that the government implemented the first Cabinet paper, dated Dec 04, 2019 presented by Premier Mahinda Rajapaksa.
The former Treasury Secretary, who also served in the Monetary Board till April this year, challenged the widely held view that abolition of a range of taxes, in line with Mahinda Rajapaksa’s fiscal policies, triggered the crisis. Attygalle asserted that the import restrictions, especially the ban on the importation of vehicles imposed at the onset of the Covid-19 eruption, and the economic contraction, resulted in the meltdown.
The COPF should seek an explanation from Attygalle, himself a former top Central Banker, having last served there as Deputy Governor, regarding the failure on the part of the Finance Ministry and the Monetary Board to review the decision to abolish taxes soon after the Covid-19 eruption. The Finance Ministry banned vehicle imports in March 2020 as part of the overall measures to manage the weak foreign currency reserves. Therefore, the Finance Ministry and the Monetary Board cannot absolve themselves of the blame for failing to take remedial measures.
The COPF specifically asked whether the Finance Ministry and the Monetary Board officials sought to advise the political leadership of the ground realities against taking such decisions. It emerged that they did nothing. The COPF proceedings revealed that in spite of a rapidly deteriorating financial situation, the Finance Ministry and Monetary Board mandarins failed to take remedial measures. The SLPP members in the COPF, too, should not forget that the change of tax policies had been in line with their 2019 presidential election manifesto ‘Vistas of Prosperity and Splendour’.
A disastrous manifesto
The SLPP made the following proposals:
a- Income tax on productive enterprises will be reduced from 28 to 18 percent.
b- The Economic Service Charge (ESC) and Withholding Tax (WHT) will be scrapped;
c- A simple value added tax of eight percent will be introduced, replacing both the current VAT of 15 percent and the Nation Building Tax (NBT) of two percent;
d- PAYE tax will be scrapped and personal income tax will be subject to a ceiling of 15 percent;
e- A five-year moratorium will be granted on taxes payable by agriculturists and small and medium enterprises;
f- Various taxes that contribute to the inefficiency, irregularities, corruption and lack of transparency of the tax system will be abandoned. Instead a special tax will be introduced for different categories of goods and services;
g- Import tariff on goods competing with domestically produced substitutes will be raised;
h- A simple taxation system will be introduced to cover annual vehicle registrations and charges for relevant annual services, replacing the cumbersome systems that prevail now;
i- Various taxes imposed on religious institutions will be scrapped;
j- A zero VAT scheme will be adopted in the case of businesses providing services to Tourist hotels and tourists, if they purchase over 60% of the food, raw materials, cloths and other consumer items locally;
k- Service charges levied on telephones and Internet will be reduced by 50%;
l- Special promotional schemes will be implemented to encourage foreign investments;
m- A tax-free package will be introduced to promote investment in identified subject areas;
n- A clear and uncomplicated system of taxing will be in place with the use of internet facilities, special software and other technological services;
O- Information Technology (IT) services will be totally free from taxes (Zero Tax), considering said industry as a major force in the national manufacturing process;
p- All the Sri Lankans and Foreigners, who bring Foreign exchange to Sri Lanka through consultancy services, are exempt from income tax.”
Dr. Athulasiri Kumara Samarakoon, Soosaiappu Neavis Morais and Dr. Mahim Mendis in a FR petition filed in terms of Articles 17 and 126 of the Constitution listed the above-mentioned points, in that order, as one of the primary reasons for the current crisis. Among the respondents are Prof. W.D. Lakshman, Ajith Nivard Cabraal, Dr. P.B. Jaysundera and S.R. Atygalle.
All of them earlier appeared before the COPF where the incumbent Governor of the Central Bank Dr. Nandalal Weerasinghe emphasized that officials should never engage in politics and should recognize the difference between them and politicians. Dr. Weerasinghe asserted that officials were duty bound to inform politicians if the decisions taken by the latter were wrong. The outspoken CBSL Chief declared that politicians alone shouldn’t be held accountable for the consequences of such wrong decisions. What Dr. Weerasinghe obviously meant was those who served in key positions at that time, too, were responsible for the current crisis. Dr. Weerasinghe, who had been asked to succeed Ajith Nivard Cabraal, in March, after the former suddenly announced his retirement, told the COPF, the officials’ claim that they had been unaware of the economy was on a wrong path for two years leading to the meltdown was not acceptable. Dr. Weerasinghe also strongly questioned the claim that economic policies had been implemented only on decisions taken by the political leadership.
Lawmakers present participating in the proceedings declared that the political leadership and the officials ignored their concerns as regards the economy raised at different occasions.
CBSL Governor Dr. Nandalal Weerasinghe before COPE on May 25, 2022. Finance Secretary Mahinda Siriwardana is on Dr. Weerasinghe’s right.
The COPF proceedings should be studied along with revelations made by Dr. Weerasinghe before the COPF and the COPE (Committee on Public Enterprises) on May 24 and May 25, respectively as well as lawmaker Ali Sabry’s shocking declaration on May 02 as regards the origins of the crisis. President’s Counsel Sabry discussed the issue in his capacity as the Finance Minister after having led the government delegation for talks with the IMF.
Appearing before the COPF, Dr. Weerasinghe disclosed that those who had been responsible for preparing budget estimates over the years deliberately deceived even the Parliament by providing unrealistic and inaccurate revenue estimates. The CB Governor explained how such practices further weakened the economy as decisions and allocations were made on the basis of fraudulent estimates.
The whole process had been nothing but a farce. Lawmaker Sabry on May 02 in a live interview with Swarnawahini, and Dr. Weerasinghe on May 25, named those responsible for the current crisis that has ruined the economy with unemployment at an unprecedented high. Sabry alleged that the Secretary to the Treasury, Governor of the Central Bank, and senior economic advisors to the President, misled the Cabinet as regards the economic situation. The National List member revealed how they repeatedly assured that the situation was well under control, in spite of difficulties while expressing confidence that issues could be successfully dealt with.
By the time the Central Bank floated the rupee in March this year even without bothering to inform the Cabinet-of-Ministers of its decision, irreparable damage had already been caused, Sabry said.
The COPF and COPE proceedings and MP Sabry’s interview in which he questioned the role of the Finance Minister have revealed the pathetic situation as regards public finance.
The MP has alleged that those who managed the national economy had prevented the country seeking IMF’s intervention well over a year back. Had President Gotabaya Rajapaksa and the Cabinet-of-Ministers received proper advice, Sri Lanka would not have been in the current predicament, Minister Sabry said.
Dr. Weerasinghe named those who refused to heed IMF warnings when he appeared before COPE on May 25. The role played by Mahinda Rajapaksa, Dr. P.B. Jayasundera and the Cabinet-of-Ministers were discussed during the proceedings with Finance Secretary Mahinda Siriwardana, too, helping to ascertain the environment in which the SLPP leadership operated.
Dr. Weerasinghe went to the extent of naming Dr. PBJ as the one who prevented the government seeking IMF’s intervention.
The Customs, Inland Revenue and the Excise Department responsible for revenue collection are run in a shoddy manner. In spite of the watchdog committees exposing glaring omissions and commissions by them that had caused revenue losses in billions of Rupees over the years, the political leadership hasn’t taken remedial measures. Committee reports paint an extremely bleak picture.
But what could be the most unforgivable sin is then Finance Minister Basil Rajapaksa joking about having himself used the illegal Havala/Undiyal system that completely shut down several billion dollars that should have legitimately come to Sri Lanka as in past years as remittances from our migratory workers, especially serving in West Asia. Even at the height of the COVID pandemic the country received about six to seven billion dollars from mainly those unappreciated poor Lankan workers slaving in those countries as mainly labourers and housemaids. Such money may not be enough to pay back the country’s USD 50 billion foreign debt. That money, however, would have ensured that the country had the few million dollars to clear a shipment of gas or other necessities, instead of having to beg all over the world.
Unfortunately, the Parliament seems incapable of taking corrective measures. The Parliament should explore the possibility of appointing, a smaller team, comprising members of COPE, COPF and the COPA (Committee on Public Accounts) to recommend remedial measures, including possible criminal prosecution of dual citizen Basil Rajapaksa for his many omissions and commissions, but especially for not applying the full weight of the law against those running the underground money transfer system, that has even robbed the education of our children.
Keeping the currency steady is the wish of any Finance Minister as otherwise in a country like Sri Lanka dependent on imports for many of its essentials, like milk food, wheat, etc., it would result in basics skyrocketing in price as experienced now and as former Finance Minister Ronnie de Mel also learnt it the hard way after allowing the rupee to devalue almost overnight by over 40 percent in the aftermath of opening up the economy to market forces after the victory of the UNP in 1977 with a staggering 4/5th majority in Parliament. It led to government workers staging a general strike demanding a Rs 10 wage increase, but was ruthlessly crushed by that regime.
A corrupt ministry
The Parliament needs to take tangible measures to restore public faith in the system. The Finance Ministry should be overhauled. Perhaps, the IMF, currently engaged in negotiations with the government, should look into the current system in place. The government can formulate an action plan on the basis of findings and recommendations made by the parliamentary watchdog committees. Perusal of proceedings of these committees reveals that the government hadn’t acted on their findings. The inordinate delay in taking action regarding the mysterious decision to reduce the duty on a kilo of white sugar from Rs 50 to 25 cents on Oct 13, 2020 without passing on its benefit to the people is a case in point as pointed out by the COPF Chairman Anura Priyadarshana Yapa, MP. It, however, cost the cash starved Treasury dearly in billions in lost revenue.
Mahinda Rajapaksa served as the Finance Minister at the time of the issuance of the relevant gazette notification. S.R. Attygalle had been the Finance Secretary. It would be pertinent to ask both MP Mahinda Rajapaksa and Attygalle who recommended the duty reduction.
Actually, the COPF should ask Attygalle to explain the circumstances leading to the issuance of that controversial gazette. As Dr. Weerasinghe pointed out recently the officials cannot absolve themselves of the responsibility for the highly questionable decisions taken by politicians.
Who benefited from the reduction of duty imposed on sugar? In fact, the parliamentary watchdog committees should undertake a comprehensive study. Perhaps, the Finance Ministry role in the Yugadanavi deal can be investigated. Sri Lanka finalized the Yugadanavi transaction with US based New Fortress Energy at midnight on Sept 17, 2021 against the backdrop of Basil Rajapaksa receiving the finance portfolio. The government also brought in retired controversial figure M.M.C. Ferdinando from Australia to assume the leadership at the CEB before making the final move. S.R. Attygalle played a critical role as the Secretary to the Finance Ministry. The SLPP had no qualms in going ahead with the agreement in spite of Vasudeva Nanayakkara, Wimal Weerawansa and Udaya Gammanpila challenging the transfer of 40 percent shares of the power station held by the Treasury among other concessions not fully revealed to the public.
The President’s Media Division (PMD) defended the agreement with the US energy firm. On the invitation of the then Presidential Spokesperson Kingsley Ratnayake, M.M.C. Ferdinando briefed the media of the usefulness of the US investment. It would be pertinent to mention that Ferdinando, who fled the country in the wake of Maithripala Sirisena’s triumph in 2015 returned from Australia after the change of government in Nov 2019. Ferdinando’s 2015, move should be examined against the backdrop of corruption accusations directed at him by civil society activists Rajith Keerthi Tennakoon and Attorney-at-Law Namal Rajapaksa. The lawyer lodged a complaint with the then anti-Corruption Committee Secretariat. There had also been a case in the Fort Magistrate Court regarding the import of coal for Lakvijaya coal-fired power plants at Norochcholai.
In spite of initial public interest, such major cases are often not pursued properly even by those initiating them possibly with ulterior motives. When The Island inquired, lawyer Namal Rajapaksa acknowledged not being aware of the developments of his own case. At the time of the Norochcholai project, Ferdinando had served as the Secretary to the Power Ministry. The unholy alliance between the Finance Ministry and monstrous institutions, such as the CEB, should be investigated and mechanism put in place to protect the public interest.
The controversy over President Gotabaya Rajapaksa’s alleged intervention on behalf of India’s Adani Group at PM Narendra Modi’s persistent request led to Ferdinando’s resignation recently. The disclosure made by Ferdinando at the COPE, his subsequent denial and a letter dated Nov 25, 2021 Ferdinando wrote to the then Treasury Secretary Attygalle exposing the horrific way business of the State is being conducted. Accountability and transparency seem to be the last thing in the minds of political leaders here.
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