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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 »
The last chapter of my book dealt with election systems, a matter of particular concern today, when we are conducting an election under a system that is universally condemned. One of the most serious tragedies of the Sirisena Presidency thus far is the failure of those to whom he entrusted the reforms he had promised to work immediately (as promised in the manifesto) on electoral reforms. It seems he tried his best, but was defeated by the intransigence of the UNP, and its fear of both the COPE Report and possible No Confidence Motions.
First-Past-the Post System
Reform has been an urgency for a long time, for Sri Lanka was singularly unlucky in the election systems it has adopted over the years. Initially it had the first-past-the-post system used in Britain, whereby the country was divided into constituencies which elected members by a simple majority. In Sri Lanka a few constituencies had more than one member. This was designed to ensure representation of different communities where they were mixed up together so that two separate constituencies would not have served the purpose. Thus, Akurana usually elected one Sinhala and one Muslim member, while Nuwara Eliya, which became a multi-member constituency for the 1977 election, had one representative each of the United National Party (UNP), the Sri Lanka Freedom Party (SLFP) and the Ceylon Workers Congress (CWC).
In general, however (as opposed to the few multi-member constituencies) the philosophy was that those who won, by however small a margin, took it all. In Britain, the effect of this is mitigated because there are certain constituencies which always stay with one party, so that a party that loses the election still has substantial strength in parliament. In Sri Lanka, however, where most constituencies are what are termed marginals, that is, a small shift either way changes the result, the two major parties found themselves reduced to very small numbers when they lost an election. Thus, the UNP got eight seats out of 101 in 1956 and 17 out of 157 in 1970, while the SLFP had eight out of 168 in 1977. Conversely, the party that won had a massive majority, even though its share of the national vote was just around 50 per cent.
Both in 1970 and in 1977 these massive majorities enabled the party in power to do virtually anything it wanted, including the introduction of new constitutions that represented their narrow interests, and the extension of the term of parliament. It is conceivable that in 1970 those who perpetrated this injustice actually believed in the slogan that parliament was supreme, in that it represented the people. The constitutional principle that representatives elected by the people for a particular period cannot deprive the people of their basic rights was not recognised by them.
Proportional Representation System
J.R. Jayewardene, who presided over the 1977 government and its majoritarian excesses, understood the need for better representation and more safeguards. In his new constitution he introduced proportional representation. He instituted an election system for the future where voting was according to districts. The quota of seats for the district was divided according to the proportion of votes each party got within that district as a whole. In that system, a majority of two-thirds in parliament would mean the mandate of a high percentage of the population. The special measures passed by such a parliament would enjoy the support of representatives of well over half the population. However, he passed several measures with the two-thirds majority he had obtained under the earlier system, including a bill to amend the Constitution to extend the term of that parliament by a further six years.
Initially, the system of proportional representation Jayewardene introduced simply required voters to select a party. The seats the party won would be allocated to its candidates according to their position in the party list. However, in the first election held under that system—the election for District Development Councils in 1981—Jayewardene realised its drawbacks. Those who were not placed high in the party list found out that they could not be elected. Sometimes they crossed over to another party, which would place them high in their list. If they remained on the list, they did not bother to canvass for votes.
Jayewardene, therefore, amended the legislation to allow the voter three choices for selecting candidates on the list. In principle, the idea of allowing the voter choice was a good one, but allowing one choice per voter would have been enough. Candidates could then have campaigned in designated areas against candidates of the opposing party. By allowing three choices, Jayewardene ensured, not only that all candidates would campaign actively all over the district, but also that they campaigned against the other members of their own parties.
Though he succeeded in his aim, it was at a great cost to the country. To cover an entire district in active campaigning required a lot of money, and soon it became apparent that those who did not have massive resources had to acquire them, in order to stay in the race. Thus, after an election candidates made it their first priority to recover the money they had spent. There was greater opportunity for corruption and increased instances of violence. Paid workers of political parties, for instance, who were traditionally plied with liquor, often turned violent in the process of putting up posters or tearing down those of other candidates, especially those of their own party.
Other aspects of the legislation introduced by Jayewardene with regard to elections were also faulty. One provision was that any member of parliament who ceased to be a member of the party from which he had been elected would automatically lose his seat. The argument was that, since a member was elected only by virtue of a vote for the party, he had no individual right to remain as a representative if he no longer belonged to the party. This provision was, however, implemented even for members of the 1977 parliament who had been elected from constituencies as individuals. However, those who had crossed over from the opposition to his party were retained in parliament through a special constitutional amendment. And even when the system of choices within the proportional representation system was introduced, the provision that candidates would lose their seat if they were no longer in the party was retained.
One reason Jayewardene had introduced the provision of losing a seat upon change of party for that it enabled him to exercise a tight control over his party members. While it could be argued that members of political parties should not be allowed to change sides—Jayewardene had first hand experience of the implications of this, since he had been closely associated with the offering of bribes that brought down Sirimavo Bandaranaike’s first government in 1964—the provision entailed that members expelled by their party also lost their seats. Thus, by threatening expulsion against anyone who did not toe the party line, Jayewardene ensured absolute obedience to the party. By the party was meant allegiance to Jayewardene himself as party leader, since there has never been a tradition of internal party democracy in Sri Lankan political parties.
One of the promises in the President’s manifesto which was broken was that relating to the Right to Information Bill. The manifesto pledged that the Bill would be introduced on the 20th of February and passed within three weeks. Some sort of leeway was also given, because it was actually a month later, on the 20th of March, that it was pledged the Bill would be passed.
There is no excuse whatsoever for having failed to get this done. True, the Right to Information was incorporated in the Constitution in April, but this needed to be fleshed out through a Bill. Such a Bill was indeed drafted, and circulated at the beginning of April, so I assumed all would be well. I found the draft generally satisfactory, though I suggested some changes to extend its scope, including posting electronically for the information of the public ‘the Declarations of Assets of Ministers, Deputy Ministers, Secretaries of Ministries, Chairs of Public Authorities and all officials responsible for contracts or expenditure over the value of Rs 1 million…… Gifts over the value of Rs 500,000 received by such individuals should also be recorded.’
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.
Many allegations are now being traded with regard to corruption, but sadly there is no discussion about measures to get over the problem. We seem more inclined to concentrate on allegations for political purposes rather than institutionalizing preventive measures, remedial measures and also measures that will give early warning.
I am very sorry about this since one of the reasons for my leaving the last government was perceptions of increasing corruption. Though now I realize that this government too is engaged in corrupt deals, this was not a reason for my resignation from the Ministry, nor yet for my crossing over. But what seemed the institutionalization of nepotism was a reason, the requirement that jobs and perks be provided for one’s supporters, as exemplified by the takeover of Ministry vehicles by Kabir Hashim’s henchmen after I had left.
Measures to prevent all this could easily have been taken as soon as the new government was set up. I had high hopes because the responsibility for reform to promote Democratic Governance, by which I thought Good Governance was also meant, had been entrusted to Karu Jayasuriya. I thought he was sincere, and he certainly seemed so at the start, but it was soon clear that his heart was not in it.
Former UPFA MP Rajiva Wijesinha says the next parliament should take up a special parliamentary report that dealt with alleged Central Bank bond scam.
The report shouldn’t be allowed to be suppressed; the outspoken former MP said, adding that the new parliament should take a fresh look at the alleged scam.
Parliament will meet again on September 1.
The Liberal Party leader represented the 13-member committee chaired by the then MP and General Secretary of the Communist Party D.E.W. Gunasekera, Chairman of the Committee on Public Enterprises (COPE).
I am worried that the commitment of this government to Good Governance is being forgotten in the midst of the various other concerns we have to deal with. But I believe that addressing this issue promptly and effectively will help us also to approach other problems more sensibly.
Since I began work, I have addressed a number of letters on the matter to Karu Jayasuriya since he has been appointed Minister for Good Governance. He is a politician for whom I have the highest regard, and I think he will do a great job, but I believe he should be made aware that this is an area about which the people are deeply worried.
He replied to one of my letters, registering the need to get rid of politicization of everything, to say that this was part of the culture and it would be difficult to make a change. But I pointed out that we must make a start. I think there needs to be greater discussion though of the manner in which the change should be made, and so I have begun this column in the hope that it will provoke debate and discussion.
I will post these articles on my Facebook but I hope others will do the same on theirs, with amendments and changes to popularize their ideas too. In addition I would encourage everyone to write direct to Mr Jayasuriya, so as to strengthen his hand to effect changes.
In particular he must start immediately to draft a Code of Conduct for those who are supposed to serve the public, and who receive public funds. This was promised in the manifesto, and it is a great pity that the public do not know what is being done about it.
I have told the UGC to draft a Code for academics and administrators in academia, and they gave me a first draft but I found it woefully inadequate. If I am still involved and can get the UGC to function again, I will suggest that the next draft be put on their website for discussion. They have already, as I requested, put on their website the criteria for appointment to Councils.
The Committee on Public Enterprises had instructed some time back that this be done, but there was a delay. On my first day in office I inquired what had happened, and was told there was a draft. That did not seem good enough to me, and I told them that, since they had had sufficient notice, I expected a final draft within a week. That was forthcoming, and the Eastern University Council was appointed accordingly. Those appointments seem to have been welcomed, though I also realized there still needs to be fine tuning. It would be useful if those interested checked on those guidelines and commented, so that we can have an even better set of requirements to put into the act when it is being prepared. Read the rest of this entry »