No action to salvage Rs 2.88 T black money outflows

By Rathindra Kuruwita and Umesh Moramudali

Rajith Keerthi Tennakoon is better known as the Executive Director of Campaign for Free and Fair Elections (CaFFE), Sri Lanka’s most outspoken election monitoring outfit. However, in recent months he has been actively campaigning against bribery and corruption and to implement Police reforms. Ceylon Today met Tennakoon to get to know the reasons for his shift of focus.

?: We have known you for a long time as an election monitor. But in recent months you have been campaigning against bribery and corruption. Why the sudden shift?
A: I would not call it a sudden shift. Free and fair elections, human rights, rule of law, etc. are all part of a healthy democracy and we can’t have free and fair elections without the rule of law and vice versa. Ever since we started CaFFE to August of last year we at least had one election per year, so the main focus was on elections.
From 2008, I have been talking about how corruption has been affecting our elections. I saw that how corrupt individuals were using money they made from illegal ways, including bribery and corruption, to ensure that candidates they like get elected in all levels of government. Thus after the January 2015 elections, I realized that an intervention is needed to expose the bribery and corruption allegedly prevalent under the Mahinda Rajapaksa administration, to ensure that those guilty are punished and to create a culture which does not tolerate corruption.
The Anti-corruption Front (ACF) was established in January 2015 to provide an organizational structure to an organically-generated citizen-driven anti-corruption drive. After the political transition of January 2015 ACF made a public request to send in complaints of various financial irregularities which had taken place since 2008. We received information on bribery, corruption, abuse of State properties etc. and verified some of the complaints, collected the necessary documents and evidence with the assistance of experts from different professional backgrounds. ACF facilitated the national challenge of a ‘Corruption Free Country by 2020’ campaign.

The ACF has sent over 512 detailed complaints to law enforcement authorities such as the Criminal Investigation Department (CID), Financial Crimes Investigation Department (FCID), the Commission to Investigate Allegations of Bribery or Corruption (CIABOC), Police Crimes Division and the Presidential Commission to Investigation Large Scale Bribery. Authorities dealing with financial corruption have filed 7 cases based on complaints lodged by ACF. Moreover, law enforcement agencies have sent 42 files to the Attorney General’s Department for further instructions after comprehensive investigations based on initial complaints filed by ACF.

?: You said the ACF was created to ‘expose the corruption which was allegedly prevalent under the Mahinda Rajapaksa administration,’ however you were one of the first organizations to expose the Central Bank Treasury Bond issue last year. A controversy which damaged this government’s credibility?

A: The people of this country voted for President Maithripala Sirisena to eradicate bribery and corruption and to democratize the society. The people voted for Ranil Wickremesinghe’s UNFGG for the same reason. I believe, that both leaders are democratic, both have allowed the government officials to act independently and their image has not been tarnished by corruption charges. However, bribery and corruption seeped in through other members of the government and when we heard about what transpired we had to expose it and a number of others, some who had done a lot to bring Sirisena, from the JVP to NGOs, into power joined us. I don’t think we had any other choice but to do what we did.
In addition, we played a big role in pushing for investigations on the US$ 650 million Krrish Tower project, CSN TV channel, baby elephants taken from the wild after killing their mothers, Central Bank and Lankaputra Bank.

?: Last week you alleged that a similar scam might have taken place on 29 March 2016?
A: We did not say that there was a scam for sure but there are indications that the process (on 29 March) has run on parallel lines of last year’s controversial auction. Central Bank of Sri Lanka has issued Treasury Bonds worth Rs 80, 000 million on 29 March, although it initially announced that it would issue Treasury Bonds worth Rs 40, 000 million (http://www.cbsl.gov.lk/pics-n-docs/02-prs/- docs/notices/notice-20160324eb.pdf). It is said that the figure was revised due to the high demand. However it is suspicious that the CBSL issued twice as much Treasury Bonds as planned. In addition most of the bonds are those that will mature in 14 years and one month, worth Rs 28,975 million at a price of Rs 80.52 (at an interest rate of 14.23%), which places the biggest burden on the CBSL.

We wrote to the Governor of the Central Bank of Sri Lanka (CBSL), President and the Finance Minister, stating that the CBSL should answer a number of concerns to ensure transparency of the process and to rebuild people’s faith in the Central Bank. These concerns were,
n Why did the CBSL which initially wanted to issue bonds worth Rs 40,000 million ultimately issue bonds worth Rs 80,000 million?
n Why did the CBSL issue Treasury Bonds worth over Rs 28,000 million on the most expensive variety of Treasury Bonds?
n Who were the primary dealers present at the auction on 29 March who bid for the 14 years and one month variety of bonds? The volume of bonds obtained and at what interest?
We want the Central Bank to answer these questions so that the people know the truth. The public trust on the Central Bank has deteriorated for years, and last year’s Treasury Bond scam was a serious blow. That is why that the authorities need to be more transparent, the public needs to know that the correct process is being carried out if we are to rebuild the public trust in institutions.
?: You were the first organization which provided details on Sri Lankans exposed by the Panama papers; however these people have done nothing illegal. What we think more important is that although members of the UNFGG government have also revealed names of people allegedly having millions of dollars in overseas accounts, made from illegal means, nothing has been done to reclaim the money?

A: You are right, re-claiming money from hidden offshore accounts is more important than revealing names. People of this country have been told that members of the Rajapaksa family and their associates have offshore accounts, which contain illegally made money. But nothing has been done, no one has been charged, no money has been brought back.
Last week, Washington-based Global Financial Integrity released a report stating that corrupt individuals have moved US$ 19.96 billion in black money out of Sri Lanka from 2004 to 2013. In rupees this sum is Rs 2.88 trillion and this includes money illegally earned through corruption. The Central Bank and other relevant institutions like the Finance Ministry have failed to prevent these outflows.

According to the report the outflows were highest in 2011 (US$ 4.6 billion). Outflow was US$ 2.63 billion in 2010 and US$ 1.45 billion of illegal money exited Sri Lanka in 2009. Look at these numbers, the current government has had over a year to investigate such outflows and to take action to bring the money back. So far this has not happened.
The ACF has repeatedly told the government that it needs to charge people and take action against those who made money illegally/in corrupt ways, and have deposited them in other countries. Sri Lankans are tired of dropping names, the people want action and they are angry at the slow progress.
?: CaFFE has also been demanding that the government carries out structural reforms of the Police. Why have you demanded these changes and what have you achieved so far?
A: After 8 January 2015 Presidential Election, the pressure exerted by political leaders is much less. It is impossible to imagine the President or the Prime Minister attempting to influence any State officials, and their ministers have taken a cue from these two leaders. The Judiciary is acting with great independence now; you can see it from the verdicts given in recent times. With the new Attorney General swearing in, many of the issues of the AG’s Department have also now been resolved. These two developments directly help Policemen to be independent. Most importantly, an independent National Police Commission has been established and now Policemen know that unlike in the past they can’t be punished for doing the right things, as transfers, promotions, punishments, etc. now first have to be approved by the Commission. Thus if our hypothesis, i.e. once the political influence on Police diminishes, the Police Force will automatically rectify its ways and inculcate attitudes that befit a democratic State, is correct, the Police Force should have rectified their behaviour by now.

However, we still see that Policemen are holding onto the status quo and refusing to change their corrupt ways. Not a week passes without a news report of alleged Police brutality. However, we have also understood that the policemen have a lot of problems; they face a number of economic and social issues. For example, there are thousands of policemen who have not been promoted for decades, they are underpaid and they work long hours, without addressing these issues there is no point in trying to carry out reforms and we have continuously asked the Ministry of Law and Order to address the concerns of policemen and we have also attempted to communicate the issues faced by the policemen to the people. There is a lot of frustration among the policemen and among the people so it’s the duty of all stakeholders to bridge the gap between the Police and the people.