Columns

Two months before the presidential election campaign last year reached its crescendo this column raised the issue of stolen national assets and the international effort to bring offenders to book.

The reference was to the joint effort by the United Nations drug and crimes agency and the World Bank which is called Stolen Assets Recovery unit (StAR). Particular attention was drawn to StAR because there was so much of platform talk about corruption, kickbacks, commissions asked for or demanded and given, bribery and assorted crimes in the previous decade or more that things were beginning to look murkier and murkier as the anti-Rajapaksa family et al campaign got into top gear.

The purpose then was to remind those making allegations, wild and startling, that there were international instruments available if those in power were really intent on pursuing the stolen assets trail to recover whatever was possible and, equally importantly, haul the offenders and blatant crooks before the law.
I thought it was worth reminding, for only a few weeks earlier the world had commemorated an important event — World Anti-Corruption Day. It was an event Sri Lanka should have joined in enthusiastically as this country was the second UN member-state to ratify the UN Convention Against Corruption (UNCAC) in March 2004.

If Sri Lanka was in the forefront of nations ratifying such an important convention then obviously it intended to faithfully fulfill its obligations under this convention. If that was the real intention and not a sham commitment to fight corruption which was all around us and greasy hands were deeply immersed in mammonistic aggrandisement.

Four months after attention was drawn to StAR and how it could help in the global fight against corruption, offering analyses and ways to recover stolen assets, one is encouraged to find that the present government has approached the World Bank and the UN to lend their support and expertise to help Sri Lanka get back at least a part of what it is alleged has been stolen from the country.

It is also encouraging to note that Switzerland, whose banking system was long known for its utmost secrecy and as a haven for stashing away corrupt money, is also now assisting StAR in its long, hard and intricate task of tracing national assets.

At least that is a step in the right direction to try and recover the assets from those alleged big-time swindlers because so far there has been much rhetoric and strong allegations about the bad, the ugly and the corrupt but little in the way of positive action.

This is what has riled many of those who voted for the collective opposition in the hope that the bribery and corruption the public were victims of in their pursuit of getting legitimate public services delivered to them, are dragging on and on in their perception.

It is, of course, easy to make allegations — and there might well be much truth in them — but it is not always easy to find corroborative evidence that would lead to convictions.

The general accusation these days is that the authorities are catching small fry while the big fish are swimming around as freely as the big Blue Whales off our southern waters undeterred by floating armouries and other weapons of human destruction (WHD).

Actually flying around would be a more appropriate description of what is happening as even bureaucrats and state officials seem to take to the skies far more smoothly than the scandal-wracked SriLankan Airlines whose new directorate seems packed with businessmen and ageing politicians who are probably better qualified to comment on the airline’s capricious cuisine than its ground operations. That is not to mention the highly discounted tickets and upgrades they would be entitled to and the ‘concierge’ service provided by the airline to arriving and departing big bosses, perhaps in an act of homage.

The question being asked by many is whether this government is cohesive enough in intent to pursue the publicly avowed objective of finding and punishing the corrupt. Some say — and with some conviction — that the business community straddling the political divide effectively massages the political Right and Left and somehow creeps through the net to safety and possibly to mass more wealth under a new dispensation.

So catching somebody’s wife for doctoring data and not dealing with the person who might well have initially signed the application forms for a diplomatic passport, seems like reaching for the bottom of the ladder instead of the top.

If one might pass these off as aberrations which some others call witch-hunting, there is a chance that the call for international support means that, at least, there is some hope of accumulating evidence against the sharks, the main target of those who are really going after the godfathers instead of the smaller hit men, if one might change the metaphorical gear.

It is no secret that some of those who creamed off the top of the national cake have stashed their assets abroad. They could be anywhere.
A Senior Financial Sector Specialist of the World Bank has written about the ever-more sophisticated methods used to hide bribes, stolen assets and other criminal proceeds from StAR initiatives.

He says the first step is creating a legal person by setting up a company which seems to be a simple, straightforward process, certainly in the world’s financial centres. On the whole this is good approach, he says, as the impediments to free enterprise would be minimal.

He argues that all grand corruption cases involve a company, trust or foundation (what the report calls “corporate vehicles”) that has been created to conceal the beneficial owner’s identity. Several cases are cited to illustrate how this has been done.

The writer warns that a system that allows for the participation of corporate vehicles in our financial traffic without insisting on the transparency of who is driving them allows such corruption to continue.It is argued that we need to identify the “puppet masters” — those politicians and government officials who hide ownership and control of corrupt assets behind constructions of paper.

A number of steps a government should take are suggested including identifying which entities are most often abused and how it is done. Identifying the puppet master is important. Is the director the real director or is he a nominee for someone? Who is behind the share holding company? Does the listed shareholder take instructions from someone else?

The theft of public assets is facilitated by a lack of transparency and public accountability. It is not only governments that should be conscious of this because there is a limit to what regulations can do. Sophisticated criminals can beat nearly any system, he argues and suggests law enforcement to step up its own game.

Now that the government has sought the help of StAR and also individual countries in its fight to beat corruption, the public will hope that there will be no impediments to the investigations in the way of political, corporate or individual pressure or influence to stymie the guilty from receiving their just desserts. Otherwise all the pre and post-election talk will remain mere rhetoric and scrutiny will die in friendly fire.