‘Oath of allegiance’ and public positions
View(s):Six weeks after the committee of lawyers appointed by Prime Minister Ranil Wickremesinghe handed over their fact-finding report on the controversial Treasury bond issue the findings were debated in parliament, and not unexpectedly, created a thunder of discontent.
The run-up to Thursday’s debate in parliament and earlier when the Speaker considering a no-confidence motion against the Central Bank (CB) Governor Arjuna Mahendran decided that the allegations could be reviewed by a parliamentary committee, has been filled with fury, anger and astonishment from opposition benches and good governance campaigners.
Even before the committee comprising Gamini Pitipana, Mahesh Kalugampitiya and Chandimal Mendis sat down to work, their appointment drew the ire of opposition parliamentarians and civil society labelling the exercise as a political farce as they were members of Wickremesinghe’s United National Party-lawyers forum.
However in such a sensitive and negative backdrop, the perceived pro-UNP committee hasn’t white-washed the transaction and urged a full inquiry by the Government. It has also raised serious doubts over contradictory statements made to the committee by the Chief Dealer of the Bank of Ceylon and the CEO of Perpetual Treasuries. The committee was appointed as a fact finding exercise devoid of any legal powers or obligations and thus had no authority to enforce any penalties or punishment.
The issue in question was the CB decision to accept Rs. 10 billion worth of bonds as against the advertised Rs.1 billion. While the practice of accepting an amount that is higher than what was advertised is not new, what raised eyebrows was that it was 10 times more than the earlier required amount. Adding fuel to the fire was the fact that Mahendran’s son-in-law’s firm, Perpetual Treasuries won 50 per cent of the Rs. 10 billion again in seemingly, suspicious circumstances. How was the company aware that the CB will increase the accepted amount to this extent and had made a bid for over Rs.5 billion when the highest bids by other dealers were around Rs. 1 billion or less? Did they have access to inside information? Were they tipped off by someone in the CB to offer a higher bid? These issues are addressed in the report with the committee saying that there are suspicions (among the trade) that sensitive information has been leaked over the year (not only in the latest case), and needs to be addressed and at one point, it said:
“The Committee at this stage can only make an observation that the bidding pattern of Perpetual Treasuries and securing 50 per cent of the accepted bids as unusual. Given the limited scope of the terms of reference this Committee is not empowered to make any assumption with regard to the aforesaid. However, in the interest of the public since the said transaction involves public funds and fiscal regulations of the government, the Committee observes that a full-scale investigation by a proper Government Authority is warranted. The Committee further observes that the Board of Directors of BOC shall initiate a full-scale investigation and if necessary a forensic audit into the activities of the dealer room of BOC given the fact that it is a state bank.”
The committee also observed that a full-scale investigation by a proper Government Authority is warranted upon the activities of “the CB’s Public Debt Department (PDD) and its officials and any other department of the CB and its officers, to ascertain whether there is any truth in the assumptions pertaining to the sensitive information of the CB being compromised”.
The committee says the Governor is not a member of the Tender Board Committee that decides on bond issues and thus notes that “there is no evidence at this stage to the effect that the Governor had direct participation with regard to the activities of the PDD and the Tender Board Committee”.
However Mahendran’s appointment had come into question earlier since he is a Singaporean national. The opposition had raised these issues in addition to a conflict of interest as his son-in-law is a dealer in a market regulated by the CB.
Earlier this week, former Minister G.L. Peiris raised the same issue asking whether Mahendran has been granted Sri Lankan citizenship status. He was quoted as saying that Mahendran has taken the (Singapore) oath of renunciation, allegiance and loyalty by which he has renounced loyalty to any foreign state or country. “How could a foreigner who pays no allegiance to Sri Lanka, hold the governorship of the Central Bank?” he has been quoted as saying at a media briefing.
However if one is to take Prof. Peiris’ argument further, why did the former minister and his ilk remain silent when US citizens, Gotabaya Rajapaksa and his brother Basil were appointed to more sensitive positions in the government by their elder brother, former President Mahinda Rajapaksa? Even as dual citizens, doesn’t the ‘oath of allegiance’ issue arise?The US Oath of Allegiance for those who become US citizens, says, “I hereby declare, on oath, that I absolutely and entirely renounce and abjure all allegiance and fidelity to any foreign prince, potentate, state, or sovereignty of whom or which I have heretofore been a subject or citizen; that I will support and defend the Constitution and laws of the United States of America against all enemies, foreign and domestic; that I will bear true faith and allegiance to the same; that I will bear arms on behalf of the United States when required by the law …”
The oath in the Singapore Constitution says, “… I do solemnly swear that I will be faithful, and bear true allegiance to the Republic of Singapore, and that I will observe the laws and be a true, loyal and faithful citizen of Singapore…” The Government has said it was considering citizenship for the CB Governor but Singapore doesn’t permit dual citizenship.
Unlike most other constitutions, the oath of allegiance in Sri Lanka’s Constitution applies only to public positions and not when taking citizenship.
On the issue of a foreigner taking up the post of CB governor, the government has listed two examples of foreigners in such positions to justify Mahendran’s selection. The first was the appointment of John Exter, the American Economist, who set up the Central Bank of Ceylon in 1950 with N.U. Jayawardena as his deputy while the second was the appointment of Canadian Central Bank Governor Mark Carney as the Governor of the Bank of England in 2013.
Yet the question of the oath of allegiance (as per Singapore rules) places questions on the appointment.
This is a new issue that is emerging in the Sri Lankan context and while the 19th Amendment to (some extent) covers this by saying Sri Lankans having dual citizenship cannot contest elections, it may be incumbent on the government seeking legal opinion on whether an ‘oath of allegiance’ bars dual citizens from taking up public positions.
Such an opinion would not only help the CB Governor clear any doubts (notwithstanding the Treasury bond debacle) over citizenship or ‘oath of allegiance’ issues but also clear roadblocks for others with similar backgrounds seeking appointments in the future.