Thursday (3) evening President Maithripla Sirisena making a special statement informed the nation about the findings and recommendations of the Presidential Commission of Inquiry into the Central Bank Bond issue, the report of which was presented to him on December 30, 2017.
The Commission was appointed following the exposure of an alleged fraud by the Parliamentary Select Committee on Public Enterprises (COPE), the Opposition and the public regarding the issue of Treasury Bonds by the Central Bank between February 01, 2015 and March 31, 2016.
The terms of reference of the Commission were to investigate and report to the President on what happened together with its recommendations. After 10 months of deliberations the Commission has submitted a comprehensive full report running to 1257 pages. The President’s statement was based on the report has already been sent to the Attorney General for necessary action.
The proceedings of the Commission attracted much public attention and the report was eagerly expected by the entire society. Never has a Presidential Commission earned such wide public interest in recent history which shows a fair degree of maturity of the political consciousness of the masses. The best guarantee of the implementation of its recommendations likewise rests on the continued vigilance and interest of the masses concerning the issue.
Fraudulent activities
According to the President’s revelations the brokering firm Perpetual Treasuries has earned by illegal means Rs. 11.5 billion during a short period of five months. The loss to the Government is estimated at Rs. 8.5 billion. They constitute funds of the National Savings Bank, the EPF, Mahapola Trust Fund and the Sri Lanka Insurance Corporation Fund.
The Commission has recommended legal action against several persons involved in the fraudulent activities. They include former Minister Ravi Karunanayake, former Central Bank Governor Arjun Mahendran, Kasun Palihena and several Bank officials et al.
Other recommendations of the Commission include the institution of civil and criminal legal proceedings to recover the brokering firm of revenue lost by the government and revision of relevant legislation to facilitate quick recovery. Costs incurred for the Presidential Commission are also to be recovered from Perpetual Treasuries.
It is proposed also to resort to the strategy of passing an Act of Parliament for expeditious recovery. Stressing the importance of better financial management, the Commission has recommended the early adoption of three new Acts by Parliament.
It has also found that secrecy and security at the Central Bank has been compromised. Hence it has recommended a complete overhaul of the Central Bank.
The repercussions of the President’s statement in informing the public on the findings and recommendations of the Presidential Commission and referring it to the Attorney-General for necessary legal action President Sirisena has initiated a healthy tradition in the context of many unpublished reports gathering dust in the Presidential archives.
By doing so the President has proved wrong those sceptics who prophesied that the appointment of the Commission was an eye-wash to placate and deceive the agitated public. It should, however, be stated that in contemporary Sri Lankan politics nothing can be taken for granted and hence permanent public vigilance is necessary to ensure that further action will not be abandoned in the ensuing period on various pretexts.
Parliamentary elections
It is clear that the President has initiated an astute strategic offensive to consolidate his position just as the strategic decisions he took during the Parliamentary elections that favoured the continuation of the 100 day program, much to the chagrin of the UPFA. This is particularly evidenced in his timing of the move to coincide with the local government election period.
Though it is too early (less than 24 hours when this column is being written) to predict the repercussions of the President’s move, we are tempted to comment on the effect it would have on political parties and the civil society in the short run.
The President has assured that his action is not against any political party and that he is only acting in accordance with the pledge given to the people to ensure the elimination of bribery and corruption. We have no doubt about his sincerity. However, the UNP would certainly be the loser for its stalwarts would be in the dock.
Any attempt to resurrect the sullied images of persons such as the former Finance Minister even among party circles would make matters worse.
Though the Prime Minister has escaped unscathed and the Commission has not found anything amiss in his recommendation of Arjun Mahendran to the post of Central Bank Governor, public perception of him as Mr. Clean has been dented at least marginally. The best course of action for the UNP would be to face the challenge boldly, clean its ranks of corrupt elements and cooperate with the President in establishing a corruption free political culture. Perhaps it would be asking too much!
Of course both wings of the SLFP would gain electorally from these developments. That would be in the short run. Despite the virulent opposition by the Joint Opposition under the command of the former President Mahinda Rajapaksa MP, lateral shift of allegiance from the SLPP to the Official SLFP headed by President Sirisena could be expected among the SLFP sympathizers.
Anti-bribery authorities
Much would depend on the Second phase of the Presidential offensive which relates to the findings of the Commission to Investigate Allegations of Bribery and Corruption as well as an appointment of a Presidential Commission to investigate the issue of Treasury Bonds during 2007 to 2015 in which many frauds had been allegedly taken place.
Already reports of 34 inquiries conducted by the anti-bribery authorities have been sent to the Attorney General and some plaints have been already filed in Courts. This could deflate the popularity of the former President and a majority of prominent leaders of the JO. Thus, the long-term effect of the President’s new strategy would be counter-productive for it. Till then they could revel on it just as the crabs that would dance in the pot until the water boils, as a local adage (“natana se kakuluwa tek diya seliye”) says.
The JVP would gain for it has been consistently fighting against corruption and has contributed much to these developments. However, how far this would be reflected in electoral gains is still a moot point. Perhaps the local government polls would be a pointer.
Tamil and Muslim political parties would not be much affected though a slight increase in their sympathy with the President could be expected and their relations with the UNP could be suspect among the rank and file.
Let us hope the Yahapalana government would awake from its slumber and pursue its promised agenda with vigour.
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