The fall of Pohottuwa govt.
An efficient mechanism is required to guarantee that disclosures made at parliamentary watchdog committees on the basis of Auditor General’s reports are used to further investigate and prosecute wrongdoers. AG’s reports and observations made by watchdog committees underscore the failure on the part of the Parliament to take effective and punitive measures to curb waste, corruption, irregularities and mismanagement. In spite of revelation of massive corruption at every level of administration, the Parliament is yet to take remedial measures. The storming of government buildings on July 09 reflected the decay in the overall parliamentary system that sort of served members, political parties and those pursuing private agendas.
By Shamindra Ferdinando
Speaker Mahinda Yapa Abeywardena, 77, should name the corrupt politicians, both retired and those serving the current Parliament without delay.
Having admitted that the developing political-economic-social crisis has been caused by utterly corrupt politicians in high positions in successive governments, Speaker Abeywardena shouldn’t hesitate to name them. The Speaker said so in response to veteran journalist Norman Palihawadana’s query last Friday amidst simmering turmoil over the joint Opposition’s demand for President Gotabaya Rajapaksa’s government to resign. (Speaker blames corrupt politicians in successive govts. for current situation – The Island, July 09, 2022)
The issue is whether Abeywardena can continue as Speaker having alleged that the ruling Sri Lanka Podujana Peramuna (SLPP), too is tainted.
Abeywardena has castigated political party leaders for offering corrupt politicians key portfolios at the expense of the country. The Matara District MP made no new revelation. However, at the time Speaker Abeywardena directed accusations at members of Parliament and leaders of political parties, he would never have envisaged the possibility of him receiving the opportunity to succeed President Gotabaya Rajapaksa as the acting President.
Several hours after the Army vacated the President’s House and the Presidential Secretariat (old Parliament building) on July 09, political parties reached consensus on the Speaker becoming the acting President. The announcement was made by Speaker Abeywardena himself following consultations held with leaders of political parties. This announcement was made on the basis President Gotabaya Rajapaksa’s assurance, he would resign on July 13 (today)
At meeting held on July 11, at the parliamentary complex, also chaired by the Speaker, the party leaders decided to elect Gotabaya Rajapaksa’s successor on July 20 in terms of the relevant constitutional provisions. Therefore, Speaker Yapa would receive executive powers for a week. In case, PM Wickremesinghe declined to step down, he would automatically succeed Gotabaya Rajapaksa for a period of 30 days. In terms of the Constitution, the Parliament will have to elect a new President. At that time this edition went to press, Wickremesinghe hasn’t indicated what he intended to do.
Having first entered the Parliament on the UNP ticket, way back in 1983, under the first-past-the post system, the landed proprietor turned politician has served both main parties, the UNP and the SLFP. Abeywardena switched sides on several occasions and was a member of the Cabinet-of-Ministers of the UNP-led yahapalana administration at the time then ruling party perpetrated the first Treasury bond scam in late Feb 2015.
Subsequently, Abeywardena joined the Joint Opposition and was rewarded with the prestigious post of the Speaker in 2020. That paved the way for the Speaker to accommodate several relatives, including his son, Chameera Yapa Abeywardena in his personal staff.
Why did lawmaker Abeywardena wait so long to admit the undeniable truth? Now that Abeywardena has said so, he should name them. However, the ruination of the national economy cannot be blamed only on politicians. The blame should be appropriately shared by the executive, the legislature, the judiciary and the holier than thou private sector that resorts to all types of shenanigans, like stashing export earnings abroad and importing things like corned mutton, chocolate etc., at a time when the country was scraping the barrel for foreign exchange to pay for urgent necessities.
As a person who has served the Cabinet-of-Ministers, Speaker Abeywardena cannot absolve himself of the accountability for the current crisis. He is not in a position to backtrack those home truths.
Had Speaker Abeywardena, as well as the majority, elected and appointed on the SLPP ticket at the August 2020 parliamentary election, took a stand when their colleagues, Vasudeva Nanayakkara, Wimal Weerawansa and Udaya Gammanpila opposed the utterly corrupt Yugadanavi deal, an unprecedented political calamity could have been averted. Unfortunately, the majority solidly stood by the government and the Speaker, too, turned a blind eye to a rapidly deteriorating situation. The Yugadanavi issue reflected the crisis within the ruling coalition with deal-making being the lifeblood of the country’s politics, even against national interest.
The current Parliament is represented by 15 political parties. They are SLPP (145 members), SJB (54), ITAK (10), JJB (03), AITC (02), EPDP (02), UNP, SLFP, OPPP (Our Power of People Party), TMVP (Tamil Makkal Viduthalai Pulikal), MNA (Muslim National Alliance), TMTK (Tamil Makkal Theshiya Kutani), ACMC (All Ceylon Makkal Congress), NC (National Congress) and SLMC (Sri Lanka Muslim Congress) represented by one MP each.
But how the noose was tightened was by virtually shutting off the only remaining foreign currency flow into the country from those generally unappreciated Lankan expatriate workers literally slaving in West Asian countries by a means of Hawala/Undiyal underground money transfer system as never before. Instead of making genuine efforts to tackle the illegal system, then Finance Minister Basil Rajapaksa merely joked about it saying he himself had used such means. With the country having stopped servicing its external debt in April, had the cash flow from expatriate workers, not been reduced so drastically the country could have easily managed to finance the day-to-day bare necessities of its people.
Instead of addressing the issues at hand, the SLPP tried to manage the crisis. The SLPP neglected the growing threat until public anger exploded at President Gotabaya Rajapaksa’s private residence at Pangiriwatta, Mirihana, on March 31.
As this piece was being typed last Saturday, July 09, protesters entered the President’s House and the Presidential Secretariat around noon as the Army and police defences quickly collapsed. In spite of coming, under fierce tear gas attack, protesters within hours, overwhelmed the, military. Controversy surrounds the destruction of Premier Ranil Wickremesinghe’s private residence at Flower Road. The Premier has pointed the finger at a section of the media for influencing the attack. A no holds barred investigation is required to establish the truth and those responsible punished.
Gotabaya Rajapaksa, who played a significant role in Sri Lanka’s triumph over separatist LTTE in May 2009, paid a huge price for a spate of blunders, beginning with the overnight changing of the country’s agriculture policy. The President decided against seeking IMF intervention on the advice of Presidential Secretary Dr. P.B.J, CBSL Governor Prof. W.D. Lakshman, CBSL Governor Ajith Nivard Cabraal and Finance Secretary S.R. Atygalle. Obviously, the President didn’t bother to properly consult the Cabinet-of-Ministers or the parliamentary group.
Of course it is easy for us to blame all of the above officials in hindsight, but from experience worldwide, IMF prescription is not the panacea for economic woes plaguing the world. If it was so, then most South American countries, in the backyard of the US, would be one big Shangri-La as they have been religiously taking its medicine since its formation.
Even so-called economic experts in the SJB have been so foolish to claim in the past that economists from prestigious American business schools in Harvard and Yale universities should be brought in to correct economic shortcomings here, little realizing that the snowballing financial crisis, since 2007/08, is yet growing and probably will lead to a worldwide great depression much bigger than that happened with the stock market crash of 1929.
Workshop for journalists
The Parliament on June 28 conducted a special one-day workshop on parliamentary procedure for the parliamentary correspondents. Speaker Abeywardena inaugurated the programme at the Cinnamon Grand.
Abeywardena, in his brief address to the gathering, emphasized the pivotal importance of accurate reporting of parliamentary proceedings. The Speaker stressed the responsibility on the part of those who covered Parliament for both print and electronic media to meet the expected standards.
Unfortunately, the Parliament appeared to have failed to recognize or acknowledge that the country was heading for an unprecedented crisis. The Parliament ignored warnings.
The Parliament failed to make necessary interventions to curb waste, corruption, and irregularities though it was responsible for public finance. Had the House watchdog committees, COPE (Committee on Public Enterprises), COPA (Committee on Public Accounts) and COPF (Committee on Public Finance) and the Parliament as the supreme institution responsible for overall public finance took remedial measures, Sri Lanka wouldn’t have ended up bankrupt. That is the undeniable truth.
The top management of the Central Bank and its top decision-making five-member Monetary Board had been always under the influence of those who exercised political power and contributed to the overall deterioration of public finance. The CBSL had been so irresponsible it paid PAYE (pay as you earn) tax of its employees regardless of Inland Revenue Department directives. The Parliament never took up the issue. In fact, the Parliament simply slept on such detrimental disclosures even in other state bodies, made by its own watchdog committees.
By the time the current CBSL top management and the Monetary Board as well as their former officials appeared before the COPE and COPF on May 25 and June 08, the country has been declared bankrupt and the stage set for unprecedented political turmoil. COPE should explain why the previous CBSL administration hadn’t been summoned in the previous year to seek an explanation amidst reports of economic downturn.
President Rajapaksa requested Dr. Nandalal Weerasinghe to take over the CBSL leadership after Cabraal unexpectedly quit having repeatedly vowed to save the economy. Cabraal who quit his SLPP parliamentary seat in September last year to succeed Prof. Lakshman gave up the top post under pressure. By then, the economy had suffered irrevocable damage. Cabraal called it a day in March this year.
Focus on LP gas deal
The recent examination of a Litro deal for 100,000 mt of LP gas pointed the finger at the outgoing Prime Minister Ranil Wickremesinghe’s Office. The shocking revelation that the Premier’s Office may have had a hand in exploitation of current difficulties to the advantage of certain interested parties underscored the failure on the part of the Parliament to take remedial measures.
COPE Chairman Prof. Charitha Herath queried the top Litro management whether it deliberately sabotaged a Cabinet approved tender for the purchase of 280,000 mt at a cost of USD 96 per mt to pave the way for the procurement of 100,000 mt at a cost of USD 129 per mt.
SLPP National List member Prof. Herath didn’t mince his words when he directly alleged the state enterprise of misappropriating USD 90 mn (of that amount the World Bank provided USD 70 mn) available for the procurement of LP gas. Statements made by Prof. Herath, National Freedom Front MP Jayantha Samaraweera, Samagi Jana Balavegaya MP S.M. Marrikar, Sri Lanka Insurance Corporation Chairman Vijitha Herath and Litro Chairman Muditha Peiris revealed how precious funds were being wasted.
Prof. Herath has called for a report on the transaction from the Auditor General W.P.C. Wickremaratne. Sri Lanka Insurance participated in the process as the parent company of Litro.
COPE also raised hitherto unknown contentious issue of Litro’s failure to utilize USD 160 mn allocated for the procurement of LP gas in terms of USD 1 bn Indian credit line. COPE recommended that Finance Secretary Mahinda Siriwardana inquired into the failure to take advantage of the Indian credit line. It would be pertinent to mention that S.R. Attygalle had been the Secretary to the Treasury at that time Sri Lanka and India finalized the credit line during Basil Rajapaksa’s tenure as the Finance Minister (July 2021-April 2022) Controversial COPE recommendation that the appointment of Board of Directors of Litro through the parent company instead of through the Ministry of Finance is evidence the key ministry didn’t command the respect of the parliamentary watchdog. Muditha Peiris was reappointed as Chairman on June 13, 2022, three days after Vijitha Herath quit that post. In response to one of Prof. Charitha Herath’s queries Vijitha Herath declared that he declined to endorse Oman agreements therefore opted to give up the position of Litro Chairman.
A Parliament statement dealt with the relevant COPE proceedings named Siam Gas Company as the enterprise that secured the original Cabinet approved tender to supply gas at USD 96 per mt whereas the contract finally ended up with an Oman company. Bankrupt Sri Lanka paid USD 129 per mt to the Oman Company. Current Speaker, now expected to be sworn in as the new acting President once Gotabaya Rajapaksa resigned on July 13, should ensure investigations into Litro affairs are brought to a successful conclusion.
It would be necessary also to probe the circumstances Anil Koswatta, in his capacity as Litro Chairman halted state auditing of the enterprise and hiring of lawyers, including Romesh de Silva, PC and Sanjiva Jayawardena, PC, at a cost of over 20 mn.
Amidst simmering controversy over the Litro transaction, 24 hours after the public seizure of the President’s House, Presidential Secretariat and Temple Trees, the President’s Media Division (PMD) announced the arrival of a ship carrying 3,700 mt of LP gas. The PMD further announced that a second ship carrying 3,740 mt will also reach Sri Lanka and a third vessel with 3,200 mt scheduled to arrive here on July 15.
Events leading to July 09 fall of govt.
Waste, corruption, irregularities and mismanagement over the past two decades gradually weakened the national economy. Regardless of shocking disclosures at the parliamentary watchdog committees, the Parliament conveniently failed to take remedial measures. The national economy was in severe difficulty at the time Gotabaya Rajapaksa won the last presidential election in Nov 2019. The government disregarded IMF recommendations, namely formulation of debt restructuring programme and dropping of plans to implement a major tax cut.
The five-member monetary board at the behest of political directives resorted to unbridled printing of local currency and wasted precious foreign reserves in a failed bid to artificially maintain the Rupee’s value at the expense of the overall national economy. CBSL Governor Dr. Nandalal Weerasinghe declared before COPE how the then Presidential Secretary Dr. PBJ dismissed the IMF recommendation. A week after UNP leader Ranil Wickremesinghe received appointment as Premier, Dr. Weerasinghe acknowledged Sri Lanka’s humiliating bankruptcy status.
By then, public anger had exploded at President Gotabaya Rajapaksa’s private residence at Pangiriwatta, Mirihana. Unfortunately, the March 31 protest failed to convince the top government leadership that the public weren’t in a mood to tolerate shoddy governance. There is no point in blaming opposition political elements, particularly those outside the Parliament for taking advantage of the unprecedented crisis that erupted during Gotabaya Rajapaksa’s tenure though the rot started over a decade earlier.
The idiotic pohottuwa leadership sought to overcome the crisis by political maneuvering. Between violent protests at Pangiriwatta on March 31 and the collapse of the government on July 09 largely depended on the participation of massive crowds. Political parties both in and outside Parliament never managed to attract such large crowds before. Political parties had no option to provide transport, free food and in some instances liquor to bring in crowds to Colombo or any other venue in the provinces. But, the bankrupt economy created an ideal environment for those awaiting an opportunity to oust the Rajapaksas.
Public anger exploded over the disruption of fuel, gas and the supply of essential goods and services due to Sri Lanka’s inability to pay in foreign currency. As the economy staggered causing turmoil, the then Finance Minister Basil Rajapaksa in early January, 2022 declared a Rs 229 bn relief package for the government sector. The announcement was made in the wake of President Gotabaya Rajapaksa sacking State Minister Susil Premjanatha for being publicly critical of handling of the economy. The Finance Minister didn’t even bother to reveal how he intended to allocate the required money. Instead, the government sought to overcome the crisis by deceiving the public.
State controlled media and a select group of print and electronic media (social media included) sought to influence the electorate. Silly but expensive projects continued until the Pangiriwatta explosion sent shock waves through the government. The PMD made high profile efforts to influence the population. The media briefings called by the PMD to justify the controversial Yugadanavi deal and explain the gas explosions backfired. The government for some inexcusable reason refused to review any of its decisions.
Disastrous decision taken in May 2021 prohibiting import of chemical fertiliser along with agrochemicals caused a catastrophic situation. Banning of chemical fertiliser overnight without taking tangible measures to procure required organic fertilizer ruined paddy and other crops. The procurement of carbonic fertiliser from China and liquid fertiliser from India is mired in controversy.
The government never bothered to investigate allegations pertaining to these transactions (the then Presidential Secretary Dr. PBJ and Prime Minister’s Secretary Gamini Senarath denied accusations directed at them. Both asked relevant authorities to investigate what they called unsubstantiated allegations made both in and out of Parliament). Mishandling of the Chinese fertiliser deal finally compelled the People’s Bank to pay USD 6.9 mn to Qingdao Seawin Biotec at a time the country was on its knees due to the economic downturn caused by Covid-19. The People’s Bank made the announcement in the first week of January this year. The government didn’t conduct a proper inquiry into that matter. Actually, the pohottuwa never made a serious attempt to re-examine its strategies, recognize shortcomings/faults, and rectify them to ensure the continuation of the government. Just over a year after the ill-fated decision on carbonic fertiliser in May 2021, the government collapsed. The seizure of the President’s House, the Presidential Secretariat and Temple Trees within hours after the police fired the first canister of tear gas at protesters at Chatham Street underscored the downfall of an utterly corrupt political party system, led by the UNP and the SLFP since independence.
