Recently the Board of the National Savings Bank (NSB) sought to explain why it purchased shares of The Finance Company (TFC) from two or three of the latter’s directors with a premium exceeding 50% of the market value at a time when the entire Stock Market was in dire straits. It was apparently a very sound investment! For whose benefit? The NSB has not revealed from where it got the confidence to violate the very Act under which it was created and the various provisions under which the Central Bank, the Treasury, the Stock Exchange and the Securities & Exchange Commission (SEC) are required to exercise certain supervisory functions over all financial institutions and the Stock Market, including the NSB. If the NSB claims to have done only what was permitted and good for its future development, why did it fail to pay for the shares within the mandatory period? And why did it allow Sampath Bank to make payment after having decided to go back on the purchase? If the NSB Board still maintains its position that the deal it entered into was in the interests of the NSB, are its individual members not implying, in effect, that President Rajapaksa was neither empowered nor competent to interfere with their actions? If so, why did they not protest when he ordered the deal to be cancelled? Was it ignorance, spinelessness or being caught red-handed? In substance, these are just a few of the many searching questions that knowledgeable commentators have been asking regarding this extremely dubious transaction. Disturbingly, many high profile names, with multiple conflicts of interest, are being added from time to time to the list of persons who are credibly believed to have colluded in various ways in this attempted scam.
It is understood that, even as this article is being a written, a way out of the mess created by the NSB is being worked out by the SEC and we may expect the entire affair to be soon forgotten by the public. However, what this contribution seeks to do is to explain that the case of the NSB-TFC deal is only the sensational tip of a huge hidden iceberg which has frighteningly malefic repercussions for the economy and the social development of Sri Lanka.
The Committee on Public Enterprises (COPE) has annually highlighted bad decision-making, inefficiency, evidence of fraud and so on from the multitude of public institutions which are covered under its Terms of Reference. Even those citizens who do not take a special interest in politics and economics have a pretty good idea of the scale of the inefficiency, corruption and fraud at the CEB, CPC, Srilankan Airlines, Mihin Air and Sri Lanka Cricket, which are the most publicized of the big offenders. But there seems to be no great eagerness on the part of the Government to carry out wide-ranging, in-depth studies of the financial transactions of these organizations by properly constituted and empowered Commissions of independent and appropriately qualified investigators so that meaningful and exemplary corrective steps may be taken to put things right. Needless to say, such Commissions must be appointed and their findings and recommendations published in full.
One of the worrying revelations made by the media recently is that the Permanent Commission to Investigate Allegations of Corruption (“Bribery Commission”) has apparently decided not to investigate a number of the cases which have been referred to it by COPE. As far back as February 2006, the Citizens’ Movement for Good Governance (CIMOGG) recommended that the Bribery Commission should not wait to be asked to investigate alleged offences but initiate action on its own even on media reports. CIMOGG has also recommended changes to the funding, composition, staffing and functioning of the Bribery Commission to make it more independent and effective. Whatever be the justification for the current decision of the Bribery Commission not to do anything, what is of concern is that crooked officers of all public enterprises who have fearlessly violated established financial and administrative procedures will feel emboldened to carry on as before, knowing that the risk of being investigated, prosecuted and convicted are virtually nil.
The public finds it very disturbing that the Police, the Attorney General, the Bribery Commission, the Central Bank and other responsible authorities distance themselves too readily from investigating even well-publicized allegations of violations of the law by powerfully-connected lawbreakers. What this lackadaisical attitude on the part of the relevant law-enforcement bodies points to is the almost total lack of transparency and accountability in carrying out their responsibilities to safeguard and administer conscientiously the assets of the Nation. We need to understand why this is happening so that a proper remedy can be found.
The mechanisms required for dealing with injustice, corruption, inefficiency and waste have been progressively weakened ever since the 1978 Constitution created an Executive Presidency. Thanks to efforts by some committed members of the Organization of Professional Associations (OPA) and an all-too-brief and unanimous show of responsibility by Parliamentarians in 2002, the slightly-flawed 17th Amendment was passed. President Chandrika Kumaratunga implemented about a third of this landmark Amendment but took no steps to remove the minor flaws in it. She went further and exploited one of its poorly drafted Articles to avoid appointing the Elections Commission. On the precedent set by her, President Rajapaksa unceremoniously ditched virtually all the provisions contained in this invaluable constitutional Amendment except to keep the helpless Mr Dayananda Dissanayake functioning in place of the Elections Commission. CIMOGG has written extensively in the past regarding these aberrations (www.cimogg-srilanka.org).
The largest nail in the joint coffin of democracy, good governance, the Rule of Law, accountability and public trust was the passing of the 18th Amendment to replace the 17th. We have repeatedly pointed out that this outrageous piece of legislation has transformed the government members of Parliament and the Cabinet into a collection of willing, gutless sheep who bleat a “Yes” to anything that the President wants. We recall that three senior MPs admitted publicly, right at the outset, that they would vote to pass the 18th Amendment itself even though they were against it in principle! They became and remain puppets.
Under the 18th Amendment, there are no independent institutions of any kind within the machinery of government. Positions requiring intelligence, integrity and competence are filled by the President with or without the advice of his close circle of advisors. All choices appear to be made on the basis of relationships, friendships, loyalty to the SLFP and UPFA, and complete subservience to members of the inner circle. No-one, however outstandingly suited for a particular position, will even be considered for it unless he toes the line. Surely, if the Government has the interests of the Country at heart, it would want to secure the cooperation of every available honest and independent citizen, irrespective of political or other ties, to man the hundreds of institutions which are entrusted with the development and protection of the Nation’s resources.
The hugely detrimental effects of the 18th Amendment could have been partly countered if the public, and especially the media, had free access to information that allowed proper monitoring of the manner in which public funds are utilized or, more accurately, robbed or wasted. For many years, CIMOGG has been calling for a comprehensive Right to Information law, without debilitating loopholes. It was particularly gratifying to note that the LLRC included the need for the Right to Information as one of its far-reaching recommendations.
In short, the People must continuously pressurize the Government to drop the 18th Amendment and revert to the 17th, with the requisite small improvements. They must also press for a strong Right to Information law.