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I returned from Azerbaijan on June 23rd and had to go that morning to Parliament for a COPE meeting. The report on the Bond scam was being drafted, and it was clear that it would show that Arjuna Mahendran had interfered egregiously with bond placements to the great detriment of the economy. The Opposition was feeling quite confident, but this made it push its luck and indicate that it would press for a motion of No Confidence on the Prime Minister, who had clearly been responsible for what had happened, as indicated by his spirited defence of his acolyte – and indeed the instructions he had given to less scrupulous members of COPE to delay proceedings.
But this was not the only issue of importance, and it should not I felt be allowed to detract from the reforms that had been pledged in the President’s manifesto. The most important of these, which had been ignored when the Constitution was amended in April, was electoral reform, but the President had promised that he would not dissolve Parliament until that was accomplished. I believe he was sincere, but I worried given the rumours that were circulating about an early dissolution. However Nimal Siripala de Silva, the Leader of the Opposition, assured me during this week that the President had again promised that he would ensure electoral reform before having an election.
One area that I had not been able to address in the Manifesto was the need for a comprehensive Bill of Rights. This had been pledged in Mahinda Rajapaksa’s 2005 manifesto, and he had indeed appointed a Committee headed by Jayampathy Wickremaratne to draft one. But by 2007, when I was appointed to head the Peace Secretariat, this lay forgotten, with the President and Jayampathy clearly no longer trusting each other. I was sorry about this, and told Jayampathy he should proceed, but it was clear he did not think the effort worthwhile in the prevailing dispensation.
But when in 2008 I was appointed also to the position of Secretary of the Ministry of Disaster Management and Human Rights, following a renewed pledge in Geneva that a Bill of Rights would be introduced, I felt I could press, and Jayampathy was persuaded to reactivate his committee. We used many of the people who were also working on the Human Rights Action Plan that had been promised in Geneva, and well before the end of 2009 we had good drafts ready.
The silly season however had set in by then, and the President was concerned now only about the election. He had said work on the HR Plan should only continue after the election, and Mahinda Samarasinghe was not willing to press, nor even to bring the Bill of Rights to his attention. I foolishly asked him whether I could put it on the Ministry website as a draft, which he forbade, whereas I should have gone ahead without asking him, so that he would not have got any flak. Read the rest of this entry »
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. Read the rest of this entry »
When I got back to Colombo from Uzbekistan, the Central Bank Bond issue was hotting up. Ranil had tried to suppress the report his own lawyers had produced, which made it clear that chicanery had taken place. They had I think been asked to protect Arjuna Mahendran, and this they did with a dogmatic claim regarding his innocence, which the rest of their report belied. Even devoted UNP lawyers, it seems, were not prepared to put their reputations on the line by claiming that nothing wrong had occurred.
The Opposition demanded a debate on the subject, but the Speaker, perhaps trying to maintain a balance, decided that the issue should be investigated by the Committee on Public Enterprises. D E W Gunasekara, its dedicated Chairman, was keen to start immediately, but I was due to go abroad again on May 24th and he decided to postpone sittings. Though others perhaps would disagree, he saw me as the most valuable member of the Committee, and felt I needed to be present to deal with what he realized would be obfuscation on the part of UNP members.
I make no bones about the fact that the transformation of COPE had been largely because of my initiatives. I had not asked to be put on this Committee, having asked instead for Consultative Committees in areas which I knew about. But the myopic Ministers the President had put in charge of subjects relating to Reconciliation obviously wanted no one around with significant capacity. So this was the most important Committee I was appointed to, apart from the one on Standing Orders, and that ceased to meet after a few months.
Assessing what COPE was about, I found that we were supposed to report on a couple of hundred institutions, but managed in a year to look at fewer than 50. This struck me as ridiculous, so I suggested sub-committees, which D E W Gunasekara institutionalized, against opposition I should note by Ravi Karunanayake who thought the whole committee should look at any institution (despite the evidence that this was not possible). Read the rest of this entry »
Tarzie Vittachi’s ‘Island in the Sun’ is perhaps the best piece of political satire written in this country. It has graphic desctiptions of the politicians of the nineties, with Sir John Kotelawala for instance being the Rogue Elephant and Dudley Senanayake the Tired Tortoise. J R Jayewardene was the Seethala Kotiya, a description that perhaps would not fit his nephew, familiarly known as ‘Poos’ in the family, a milder member of the Cat family.
But there is another description that fits Ranil well too, given the strange goings on at the Central Bank. Tarzie suggested that R G Senanayake could not move straight even when that was the easiest thing to do. So now we find that, what might have been an understandable – if capital friendly – change of policy was not done direct as a principled man like Eran Wickremaratne might have done. Rather there was clandestine activity which, in a Watergate style operation, has been concealed so that the ugly truth emerges only gradually.
I was surprised to be told recently that the Secretary to the Cabinet Ministry under which I was supposed to work as State Minister of Higher Education had been dismissed. Eran Wickremaratne explained the reasons to me, but I will not go into those since, much as I respect Eran’s own integrity, there may be another side to the story, which reflects less well on the Cabinet Minister than the Secretary.
In particular, after the admission that Kabir Hashim, along with Malik Samarawickrema and the Minister of Finance, had been in the Central Bank to raise the issue of obtaining more money, shortly before Arjuna Mahendran’s fatal decision to take 10 billion by auction, I have my suspicions about what has been going on there. Thankfully, Eran said very clearly that he was not at that meeting and had known nothing about it, which I suspect would be true of the Secretary too.
I did raise with Eran the question of the failure of the 19th Amendment to address a fundamental principle of Good Governance, which is the strengthening of the independence of Public Servants. Certainly there should be provision to dismiss public servants if they do something wrong, but that should not be a political decision, it should be made by the Public Service Commission. And we must go back to the usual practice in parliamentary democracies where Ministers come from within Parliament, which is that Secretaries to Ministries are in effect Permanent, and not changed with every change of government.