By The “Sunday Times” Political Editor
President Maithripala Sirisena chose to reveal highlights of the story behind the Central Bank bond scam on Wednesday – part of the findings of the Commission of Inquiry.
That it came unusually in a pre-recorded 21-minute address to the nation gave it the status of a “national” issue. Yet, it was one that had drawn greater public attention countrywide. Even in villages where there was less literacy and the word ‘bond’ was only associated with James Bond movies, there was sufficient awareness of the alleged plunder of public funds. They were only oblivious to the nitty-gritties of bond auctions but most long believed there was something rotten in the entire episode.
The address did considerably boost Sirisena’s popularity. It had taken a strongly downward slide after his efforts to reunite the Sri Lanka Freedom Party (SLFP) failed miserably. How much this will impact at the local polls remains to be seen. The SLFP is now having small pocket meetings in some areas. This is ahead of major rallies which Sirisena will address in every district. The main campaign is to be launched next week.
This is one of the rare occasions when a Government in power has appointed a Commission to probe its own activities. Most others have been directed at their predecessors. Sirisena is still livid that former Defence Secretary Gotabaya Rajapaksa had not kept to the ‘assurances’ he held out about uniting the party. He was in fact in favour of the move but remarks by Prasanna Ranatunga (UPFA – Gampaha District) at a meeting that they (the Joint Opposition) had taken Sirisena ‘for a ride’ had angered him more. Earlier, Sirisena did blame Sri Lanka Podujana Peramuna (SLPP) principal strategist Basil Rajapaksa who stoutly opposed any reunification.
And now, what is equally shocking, if not more, is the fact that he has placed his Sri Lanka Freedom Party’s (SLFP) relationship with its coalition partner, the United National Party (UNP), on a razor’s edge. The carefully crafted delivery, the contents of which were perhaps expertly done, seemingly had an eye on the local polls on February 10. It was pregnant with many serious political nuances. That helped him regain some prestige.
It was only a week earlier that he pledged to wield the sword to deal with those whom he perceived as bribe takers or the corrupt and took a few swipes. Those who were scarred, those who are yet to be when the Commission’s report becomes public and the related disclosures all point in the direction of the UNP, the main coalition partner.
Firstly, Sirisena has vented his anger on the UNP, using a credible account that emanated from two Supreme Court Judges and a retired Deputy Auditor General. This naturally places the UNP in an extremely unenviable position as a coalition partner. Secondly, the political missiles Sirisena fired are sure to hurt the UNP’s local polls campaign with the exception of the party’s strongholds. It will also affect the UNP’s slow preparations, with the help of even foreign communication experts, for the next presidential and parliamentary elections. Why does this aspect become so significant?
The story begins with the Commission of Inquiry making a request for a meeting on Sunday (December 31, 2017) to present its report. That was the last date of its twice extended mandate. However, Sirisena was going to be away from Colombo and the members were offered a meeting at 12.30 p.m. on Saturday, the 30th. A source close to the Presidency said Sirisena who received the report had a conversation with the members for some 45 minutes. On learning that the report alone ran into 1257 pages, together with some annexures, he sought to know the significant highlights, the source added.
During last week, Prime Minister Ranil Wickremesinghe was on a yearend working vacation at his official residence, the Prime Minister’s ‘Lodge’ in Nuwara Eliya. When contacted by Parliament officials to arrange for a meeting of the Constitutional Council, he had replied that he would return to Colombo only on January 2. The news about the report reached him breaking his holiday of relaxing listening to music and talking with friends and their families. He rushed back to Colombo however on New Year’s Day and sought a meeting with President Sirisena. A senior UNPer said it was partly to discuss the Commission report and obtain a copy. That was to ascertain the Commission’s findings and the recommendations made by it.
That copy of the report has not reached him yet. Nor was he able to have a meeting. The President’s office had informed the Premier that he would be in Polonnaruwa on New Year’s eve and then in Kandy and Kataragama on New Year’s Day. Thereafter, Wickremesinghe sat down for a session that New Year’s Day evening to discuss the UNP campaign for the local polls with party Chairman Malik Samarawickrema and General Secretary Kabir Hashim. However, just hours ahead of his address to the nation on Wednesday, Sirisena telephoned Wickremesinghe and briefed him on what he was going to say. That was his first intimation of what the report contained, but still, no copy of the report was sent.
Notwithstanding what the Commission reported to him during their discussion on December 30, and the disclosures he made to Sri Lankans, President Sirisena is on the horns of a serious dilemma over this situation. A UNP Cabinet minister who spoke on grounds of anonymity since he is governed by ‘collective responsibility’ was livid. “The assumption, quite correctly, is that there is only one Government in Sri Lanka formed together by the SLFP and the UNP. Here is a situation where there is a publicly demonstrated assumption that there are two different Governments, one by the SLFP and another by the UNP. This may be the first time a President has not taken into confidence his own Prime Minister in sharing a document that is going to be placed before the public, through Parliament on January 23.” It will thereafter be printed as a Sessional Paper of Parliament. That raises the all-important question – whether President Sirisena has lost the trust and confidence of Premier Wickremesinghe? More so, when he chose not to share a copy of the Commission report with him and brief him only on the contents of his address just hours before he delivered it.
As the December 31 deadline for the Commission neared the final days, there was public anxiety over what its findings and recommendations would be. It was ‘the talk of the town’, so to say. Yet, when the Cabinet of Ministers met for the first time in the New Year last Tuesday, there was no reference to the Commission. The previous week’s meeting was cancelled and some ministers expected copies of the report to be given to them at this meeting.
The ruling SLFP is anxious that a session of Parliament be summoned ahead of January 23. They, together with the ‘Joint Opposition’ and the Janatha Vimukthi Peramuna (JVP) have sent in separate requests to Speaker Karu Jayasuriya. A decision whether to allow such an early session rests in the hands of Premier Wickremesinghe. Speaker Jayasuriya has summoned a meeting of party leaders for 2 p.m. on Tuesday (January 9) to discuss the matter. The UNP is one of the parties that called for the tabling of the report in Parliament and it is now unlikely it would raise objections. Yet, an early debate on the Commission report is unlikely since its contents are yet to be known. An early date, however, would facilitate the tabling of the report.
A UNP Working Committee member, who also wished to remain anonymous, alluded to a letter which Sirisena wrote to his predecessor Mahinda Rajapaksa ahead of the parliamentary elections in August 2015. The UNP member argued there were “shades of that episode” in Sirisena’s conduct. On July 13 of that year, Sirisena told Rajapaksa in a three-page letter that in the event of (the SLFP) gaining the support of other parties to form a Government….”it is not you who should become Prime Minister but another senior member of our party….” He claimed this letter one of the reasons why the Rajapaksas lost the parliamentary elections.
Mahinda Amaraweera, General Secretary of the United People’s Freedom Alliance (UPFA), however, countered the arguments. He told the Sunday Times, “We thought it is more democratic for the President to act impartially and address the nation instead of discussing the statement with other parties. If it was discussed, it could have resulted in some alterations being made to it (the statement).” Those remarks from a minister regarded as a confidant of President Sirisena make it abundantly clear that withholding the report, from the Prime Minister, was a conscious move. However, Amaraweera’s reason for it – that there would possibly be pressure to make amendments – is arguable for many reasons. Earlier, the appeal by three UNP ministers — Malik Samarawickrema, Kabir Hashim and Mangala Samaraweera — to Sirisena not to have Wickremesinghe summoned before the Commission of Inquiry had failed. He declared he had no role in the Commission’s proceedings. Similarly, Sirisena could well have refused to make any changes if indeed they were suggested.
President Sirisena also made a reference contained in the Commission report to Premier Wickremesinghe. He said, “…..The Commission report said that the Honourable Prime Minister’s responsibility in the appointment of Mr. Arjuna Mahendren as the Governor to the Central Bank was proper.
The Commission is of the opinion that the Prime Minister made his statement in Parliament regarding the appointment of Mr Mahendran believing in the facts presented by Mr. Mahendran and Mr.Samarasiri, especially the promises made by Mr Mahendran. The Report also says that the Prime Minister should not have done that.
“The Commission stated that moreover these facts were before the COPE committee and the Prime Minister had not stated that because of that he had not taken the proper action against Mr. Mahendran……”
On Monday, a senior official at the Prime Minister’s office showed documents to the Sunday Times. One dated November 11, 2016 sent by the Prime Minister’s Secretary Saman Ekanayake, refers to the following reports:
• = The Report of the Committee on Public Enterprises (COPE) Parliament Series No. 109 tabled in Parliament on October 28, 2016.
• = The Special Report on Bonds issued by the Central Bank between the period of February 2015 and May 2016 which was forwarded to the Committee on Public Enterprises.
Ekanayake said he had been advised by the Prime Minister, as Minister of National Policies, to seek the AG’s opinion on the legality/validity of the bonds issued by the CBSL since 2008 and;
(a) If the procedure which had been followed is lacking in authority then the measures to be taken to rectify such defect, and
(b) Your views on the observations given in the Auditor General’s Report pertaining to Public Auction and Private Placements.
In a three-page letter, Deputy Solicitor General Milinda Gunatilleke (on behalf of the AG) in a reply on November 7, among other matters declared that “in order to pursue recovery” in terms of the Registered Stocks and Securities law, “it would be necessary to provide a precise quantification of the loss suffered by the Government…” He has said it was prudent that “the quantification should be carried out by the Auditor General’s Department with the assistance of an independent expert whose evidence can be relied upon in a court of law.” The letter said “this Department is considering whether an offence under this provision or any other law has been committed…”
The UNP also issued a statement on Thursday. Contrary to Minister Amaraweera’s claims that discussions with “other parties” would have led to the President’s message being amended, the UNP was conciliatory and supportive in its tone. Perhaps a detailed response was prevented by the non-availability of the report to the UNP. A few highlights of the UNP statement issued this week:
“The President has now forwarded the report of the Presidential Commission of Inquiry into the Bond Issue to the Attorney General (AG). We would like to thank the Bond Commission for its services rendered through its 10-month long inquiry.
“The investigative report into the bond issue compiled by the Committee on Public Enterprises (COPE) under the Chairmanship of Mr Sunil Handunnetti was forwarded to the AG on the instructions of the Prime Minister in December, 2016. In December, 2016, the PM requested the AG to forward recommendations on legal action that should be taken against officers responsible for the disputed bond issue, and on regulating the bond issuance process.
“Accordingly, the responsibility of taking suitable legal action regarding the bond issue was conveyed to the AG’s Department by the PM in December, 2016 and by the President in January, 2018.”
These assertions no doubt place on the Attorney General the responsibility of explaining why no action has been forthcoming since the Premier’s request. Of course one has to bear in mind that such cases take considerable time.
The Sunday Times has learnt that the Commission of Inquiry has also raised issue on the placement of the Central Bank of Sri Lanka (CBSL) under the Prime Minister on grounds of the legality of that exercise. The Commission is of the view that in terms of the law, the subject should have remained with the Ministry of Finance. There was a political rationale then for the move. Ravi Karunanayake, who was the Finance Minister, had faced court action over the remittance of funds from Raj Rajaratnam, a stockbroker of Sri Lankan origin in New York and now in jail in the US for insider trading. The investigations had been initiated by the Exchange Control Department that came under the CBSL. Hence, it had then been considered prudent to bring the CBSL under the Prime Minister.
Sirisena said in his address that “The Commission report refers to the allegation against former Finance Minister Mr Ravi Karunanayake regarding the payment of rent for the penthouse apartment that belongs to the Aloysius Family and their Walt and Rowe Company and stated that Mr Karunanayake was responsible for that and recommended that the Government should take necessary action against Mr. Ravi Karunanayake under the section of bribery and corruption and further legal action under the penal codes for giving false evidence at the Commission.”
The Commission to Investigate Allegations of Bribery or Corruption is set to probe the former Finance Minister and later Foreign Minister. Whilst this is being described as time consuming, action under the Penal Code is to come first, according to legal sources. Whilst those testifying before a Commission of Inquiry are entitled to immunity, those giving false evidence in a judicial proceeding face a sentence of up to seven years in jail and a fine under the Penal Code. The Attorney General’s Department has opined that since two Judges of the Supreme Court, who were members of the Commission, had held that Karunanayake had given false evidence, there was already a strong case. However, Karunanayake has remained defiant. He told the Daily Mirror that he had been 25 years in politics and this was the first time his ‘integrity’ was being challenged.
Since his Wednesday address to the nation, paradoxical enough, President Sirisena chaired a meeting of SLFP and UNP ministers. It was held to discuss ways and means of avoiding criticism being levelled against each other during the ongoing polls campaign. Among others taking part: SLFP – Nimal Siripala de Silva, Anura Priyadarshana Yapa, Duminda Dissanayake and Thilanga Sumathipala. UNP – Premier Ranil Wickremesinghe, Malik Samarawickrema, Kabir Hashim and Mangala Samaraweera. Both sides refrained from making references to the report of the Commission of Inquiry. Worse enough, the UNP which has been at the receiving end of Sirisena’s address did not even raise a mild protest that it would hit the party’s campaign. Here is one area where the UNP’s communication machinery has faltered and it has been unable to come up with periodic responses to developments linked to the bond scam.
Today, UNP leader Wickremesinghe is expected to publicly outline his party’s response at the annual sessions of the party at Campbell Park in Borella. The UNP turns 70 this year. It is expected to be a reiteration of the position taken up in its statements. It is noteworthy that there is a distinct difference in the positions taken up by the SLFP and the UNP.
For the Sri Lanka Podujana Peramuna (SLPP), the main constituent in the ‘Joint Opposition,’ its first major session was held last Wednesday at the Sugathadasa Indoor Stadium. It was addressed by party leaders including their leader Mahinda Rajapaksa. There was, however, no reference by them to the bond issue. However, the SLPP’s main strategist Basil Rajapaksa told the Sunday Times, “Our position is that the entire Government including the Prime Minister should resign. They just cannot blame it on their former Finance Minister and remain silent.” The ‘JO’ parties discussed having maroon – or kurakkan (the colour of Mahinda Rajapaksa’s and Basil Rajapaksa’s shawl or satakaya) as their colour.
The SLFP’s focus, articulated by none other than President Sirisena, is on the “allegations of corrupt practices and misdeeds during the period 2015 and 2016.” He said that the Commission was mandated to inquire into the period from February 1, 2015 to March 31, 2016 “to find out the actual facts and to make recommendations with regard to the steps to be implemented in the future.”
However, Sirisena noted that the Commission of Inquiry did not have the mandate to inquire into Treasury bond issues from 2008 to 2015. He said the Commission has recommended that there should be an investigation into that period too and added that “Employees Provident Fund (EPF) money was lost mostly during that period.” He pointed out that the EPF and other Government institutions had lost more than Rs 8.5 billion.
In contrast, Premier Wickremesinghe is focused on the bond issues from 2008 until 2016. The period from 2008 to 2015 was under the previous Mahinda Rajapaksa administration where similar abuses have allegedly occurred. In other words, it was to highlight that not only UNP members but also those in the SLFP who had resorted to abusing the bond auctions. The fact that Maithripala Sirisena was General Secretary of the SLFP during that period is no secret. Wickremesinghe met the Central Bank Monetary Board members on Friday to emphasise that they should probe the earlier period too. The same request was also made from the CBSL Governor Indrajit Coomaraswamy.
If the Commission of Inquiry was given a mandate lasting three months and was renewed periodically till ten long months, to come up with its findings and recommendations, it would take more than that time to bring the culprits to book.
Yet, the issue is now before the court of public opinion. How they will give their verdict will be known within weeks or after February 10. Until then, the two major coalition partners, the SLFP and the UNP, are fighting it out over many omissions and commissions. This is notwithstanding pious pronouncements that one should not criticise the other. What follows in their on-off relationship will be the most critical question this year