COPE began its investigations on Friday June 5th, and we met every day the following week, except on the Friday – again my fault, for I had arranged another trip, our High Commission in Delhi having succeeded in getting visas for Azerbaijan. During the weekend I read the reports the Bank had prepared on the whole business, and found the situation even worse than I had thought. Because of Mahendran’s actions, the interest the country had to pay on bonds had shot up, so that not only had Perpetual Treasuries, the company associated with Mahendran’s son-in-law, made a massive profit, but also the interest payments Sri Lanka had to make on loans after February 2015 reached ridiculous heights.
Our questioning of bank officials revealed an even more sordid side to Mahendran’s machinations. The first Deputy Governor we interviewed seemed to me a very shady character, and not very bright. I actually asked Nivard Cabraal why he had promoted him, to which the answer was that he was good at some things, and had seniority on his side. But he knew nothing of debt, so it was suspicious that Mahendran had put him in charge of that area.
The Director in charge of that area also knew nothing of the subject, but my sister told me that she was known for her honesty. She had called my sister when she was transferred to that position, expressing worries about her capacity to handle the job, but my sister told her that integrity was vital and that was perhaps the reason for the move. Certainly she exuded decency, to the point of practically breaking down when we reprimanded her for not having told the Governor that it was wrong to take 10 billion worth of bonds when the advertised amount had been 1 billion, and the few bids for large amounts were at high rates of interest. She declared that they had told him this repeatedly and, though they stopped him from insisting on 20 billion being taken, he had been adamant about 10.
Her Deputy was a very smart young man, and it was clear that he had made the position clear to Mahendran, but they had been over-ruled. It transpired too that Mahendran had come down to the bidding floor twice that morning, and had interfered egregiously in the process. It was absurd therefore that the UNP lawyers had claimed that he had no direct responsibility for what occurred.
Other suspicious details included the fact that Perpetual Treasuries had obtained a loan from the Bank of Ceylon for its bid, and that this had been approved straight away with no proper assessment of the request. It was unprecedented that the Bank, which was also a primary dealer, should not have bid to any substantial degree for bonds, but had instead underwritten the bid of a private company.Meanwhile a couple of the UNP members on COPE tried to disrupt the proceedings, treating very badly the staff who were trying to tell the truth. One of the more honest members of the UNP, perhaps the only one who still had any ideals left, had it seems told D E W that they had been tasked by Ranil to prevent an adverse report. Seeming to confirm this was the fact that they tried to draw the red herring that Ranil had introduced when the matter was first raised in Parliament, when he claimed that there had been much dishonesty under Cabraal, and Perpetual Treasuries had benefited from the fact that Cabraal’s sister had sat on its Board.
But this was complete nonsense, for Cabraal produced statistics to show that that company had received hardly any bonds while he was Governor, whereas its portfolio had increased by leaps and bounds after Mahendran took over. And this obviously made sense, for Cabraal had kept interest rates low, which was doubtless why a company concerned with large profits had not subscribed at acceptable levels in the past, whereas now it bid on a large scale given the high interest rates the country had been forced to pay.
Meanwhile the government was going from bad to worse. Soon after I got back from Delhi I heard that Sudharshan Seneviratne had been removed, to be replaced by Esala Weerakoon, son of Ranil’s old henchman Bradman. Esala himself was a decent young man, but he was very Western in his outlook, and certainly not the man for India. The government seemed in time to understand this, for after about a year he was transferred to Colombo as Foreign Secretary.
It was a great pity Sudharshan was sent away, for he had good contacts in Delhi, having done his doctorate at Jawaharlal Nehru University. He was also very thoughtful and had begun a process of building up relations with different states, which had been a key element in the President’s manifesto. But the concept paper he had prepared had been ignored, and though initially I thought this was a consequence of the Foreign Minister’s myopia, it turned out that in this instance Mangala Samaraweera was not to blame. It turned out that one of they youngsters in his office, who was also very Western in his outlook, had thought the paper too trivial to bring to the Minister’s notice.
Mangala was certainly responsible for another blunder in that he had claimed in Parliament that Tamara Kunanayagam was an LTTE sympathizer. This would have been astonishing, given how forcefully she had worked for Sri Lanka as our Permanent Representative to the UN in Geneva, except that in the process she had earned the animosity of the West, and perhaps Mangala thought it his duty to treat her as an enemy. He dredged up therefore comments made about her by a UNP apologist with regard to her forthright criticism of the ethnic violence which the UNP government had permitted, indeed encouraged, in July 1983.
Meanwhile it was clear that Ranil had no intention of allowing electoral reform to happen before the next election. Whatever was proposed was objected to, and it was clear he was using the minority parties to claim that consensus was not possible. The Elections Commissioner was clear that a formula could easily be worked out that would, though it would not satisfy everyone, deal with the fears each expressed, but he also indicated that he knew Ranil would prevent consensus being reached.
I had by now got into the habit of seeing Rev Sobitha occasionally. I had not known him before the election but, when it became clear that the government was not living up to its commitments, I went to visit him, and found that he was probably the only other person who was deeply depressed about what was going on. He too understood the urgency of the need for electoral reform, and he too realized that the principle problem we faced was Ranil, his intransigence and his ambition.
Meanwhile the Opposition was not being very sensible. Though I agreed with them that there was need of a change in the government, I told them that they should have discussions with the President and propose a change that would in no way threaten them. It seemed to me that he could not be expected to appoint a Prime Minister from the SLFP, given all its senior leadership had opposed him during the Presidential election. What made sense therefore was for the opposition to offer to support a UNP Prime Minister who would introduce necessary reforms rather than singlemindedly pursuing a UNP victory over the SLFP at the next Election.
What the Opposition was doing, in suggesting that after a No Confidence Motion they should press for a Prime Minister of their choice, was making the President nervous. Later Vasudeva Nanayakkara told me that I had perhaps been right, but they had thought that, with a parliamentary majority they should be able to decide on who should be Prime Minister. What he forgot was precisely what Ranil had forgotten in 2003 when Chandrika challenged him by taking over some vital Ministries, that under the existing Constitution the President could dissolve Parliament whenever he wanted. Relying then on an existing majority was foolhardy.
In the midst of all this political mayhem, there was however some cause for celebration in that several of my nephews got married this year. I had a couple of them, and their girlfriends, to lunch at Lakmahal, since this was something my father had done for the younger generation. It was a lovely occasion, and I found the two young ladies great company. I was also pleased that they were most complimentary about the style of the new bathrooms I had built, and encouraged me to take possession of the Chinese junk I had been offered.
This was by Mildred Tao, who managed the Twin Towers. Many years earlier she had commissioned Ena to decorate the place, and the two ladies had then got on extremely well, Mildred even inviting Ena to her daughter’s wedding in South Africa and providing her with a ticket to attend. But then there had been a falling out when Mildred’s father had insisted on the abaci which Ena had designed for the Twin Towers being removed, on the grounds that abaci only moved when you pushed them, and he did not want staff like that.
But though Ena was upset, Mildred was determined to make peace, and a couple of years previously she had gone up to Aluwihare to stay after a lapse of some years. Ena wanted me there as well, and when I asked about the abaci and found they were in store, I asked if I could have them. Mildred just gave them to me, and my village carpenter did a great job in fitting the biggest one on the wall on the back verandah.
In 2015 Mildred called to ask if I would also provide a home for the junk Ena had designed for the Boardroom. That was being redecorated and she wanted to make sure the superb stuff Ena had placed there did not get discarded. I jumped at the chance, not quite sure where I would put it, but in the end I placed it in the large bedroom upstairs which my grandparents had occupied, and which I had decided to move into a year after my father’s death. My sister was not very happy, perhaps because I told her that the obvious place for the junk was on top of the large dining table downstairs, but she could not object to it being in my own room. It sits there now, with the fantastic cargo Ena put in it, giraffes and an elephant and a hermit and a statuesque woman.