Columns

• President Sirisena furious over Rajapaksa march and other moves by Joint Opposition; cases against former ruling family to be expedited
• PM announces new unity plans in Parliament; two top-level committees appointed to strengthen ties and speak in one voice
• “Abandoned ” properties at Malwana, Matara likely to be taken over; questions over Basil’s admission to National Hospital

By Our Political Editor
It was a significant week for the 19 month old United National Front (UNF) Government. Its two main partners – the United National Party (UNP) and the Sri Lanka Freedom Party (SLFP) – declared that instead of the previously agreed two years, they would continue together for the full duration of their term of office. That is until the next presidential election in January 2020 and the parliamentary elections in August 2020.

In what was clearly a synchronised exercise, Prime Minister Ranil Wickremesinghe told Parliament on Thursday, “The present national unity Government will remain for five years. There is no doubt about it.” He made this announcement in a statement he made on his official visit to Singapore. On the same day Minister Duminda Dissanayake, General Secretary of the Sri Lanka Freedom Party (SLFP), declared at a news conference, that the SLFP and the UNP had signed the Memorandum of Understanding to form a Government of consensus for only two years, but the National Government would continue for five years.

“Measures needed for the extended term will be formulated once the two year term ends,” he said. Dissanayake likened the alliance to a “proposed marriage” which was “more successful” than love marriages. UNP General Secretary Kabir Hashim and Dissanayake also appeared on television to make the same announcement. During the parliamentary elections last year, the UNP sought a mandate from voters for a national unity Government for two years. Their SLFP counterparts, perhaps sure of victory then, did not make any mention of this.

A handcuffed Basil Rajapaksa, a key organizer of next week’s march from Kandy, being taken to prison after a court ordered that he be remanded on charges of financial crime. Rajapaksa was later transferred to the National Hospital. Pic by Gayan Amerasekera

The move has unnerved some pro-Mahinda Rajapaksa parliamentarians who are now in the ‘Joint Opposition’ and are members of the United People’s Freedom Alliance (UPFA). Moves are afoot to write to UPFA General Secretary, Mahinda Amaraweera asking him to explain the future of the UPFA. Amaraweera could not be contacted yesterday. A personal security officer who answered his mobile phone said he was busy at an alms giving in his Colombo residence. There was some unease even among smaller partners of the Government who are known to be discontented over some issues.

In both arranged or love marriages, one need hardly say, there are ups and downs. So it is with the historic ‘marriage’ between the two main political parties in Sri Lanka. Not many Sri Lankans would have realised the nuances behind the assertions by the two sides, no matter whether the pledges they made would be fulfilled or not in the years to come. This is at a time when hate replaced love, procrastination replaced promises and personalities began vying for prime positions. These are the main areas where they have been at loggerheads. Yet, here are the two sides, widely believed to be heading their own ways, now pledging to go it together for their entire term? What is the new mantra for the sudden love to work together, for the UNP even beyond the mandate it received?

The answers lay in developments throughout Wednesday. Briefly put, the cause celebres was former President Mahinda Rajapaksa and his backers. Since Tuesday was Esala Full Moon Poya, the weekly meeting of the Cabinet of Ministers was held the next day (Wednesday). It was an unusually lengthy session. President Maithripala Sirisena was bitterly critical of Rajapaksa. One Minister said this was the first time he was so livid at a ministerial meeting. “He spoke his heart out,” he added. Sirisena charged that Rajapaksa and the joint opposition were trying to set the agenda for the Government. In focus was the Opposition’s protest march from Kandy to Colombo from July 28. Detailed reports of preparations have been reaching Sirisena.

With stop overs, the sponsors hope to reach Colombo on August 1. With one of the promoters Basil Rajapaksa now in remand custody, Hambantota District parliamentarian Namal Rajapaksa, who just came out of remand prison has taken over the role. Arrangements are under way to hold five different public meetings during overnight stops in Mawanella, Kegalle, Warakapola, Nittambuwa and Kadawatha. One group is being tasked to distribute leaflets listing out the various burdens placed on the people by the increase in VAT and other measures. Overnight accommodation is being booked in smaller hotels en route. An appeal has gone out to former President Mahinda Rajapaksa to launch the walk in Kandy and later receive the marchers in Colombo on August 1. Pro-Rajapaksa parliamentarians are being assigned to lead different groups, some of them to be identified by the coloured clothing they wear.

Asserting that Rajapaksa’s ‘bluff’ should be called, Sirisena said different investigations into misdeeds by Rajapaksa and members of his family should be carried through and immediate legal action taken. He asked why people were running behind them. In the backdrop of the march from Kandy, Basil Rajapaksa, who is now heading an unnamed movement, some of whose members are organising the protests, was arrested. He was remanded till August 1. However, after one night in the remand prison, he has moved to the National Hospital in Colombo drawing strong criticism from civil society groups. Here was a politician who wanted to take part in a march from Kandy to Colombo but had become ill only after his arrest, was the crux of their complaint. One group accused the Government of turning a blind eye. One of those who went on television to charge that Basil Rajapaksa had influenced prison staff was the Ven. Battaramulle Seelaratne Thera.

Sirisena spoke on attempts by Rajapaksa and the Opposition to block the forward march of the Government. He said there should be unity among partners and asserted that this Government would not fall. He was categorical he would not allow such a thing. Ministers decided to appoint two Committees — one to formulate a common stance when it comes to issues and another to deal with matters arising out of the Opposition activity including the July 28 protest march. The Government had come under heavy criticism over its inability to speak with one voice on issues of national or public importance.

Often, different ministers or their deputies were speaking out on issues contradicting each other and making their views appear as the official policy. Others were so ill informed that they embarrassed the Government with their utterances. One case in point is a Minister who declared that the Sri Lanka Government had asked their Panamanian authorities for the names of Sri Lankans who held accounts in offshore companies. This lacunae was referred to in these columns last week as “compartmentalised governance” where different persons were saying different things on the same issue. The second committee will examine whether normal life of the community will be interrupted by the Opposition march from Kandy and whether the event would trigger any violent incidents, a Minister said. Sirisena said the partners in the Government should be united. Both Sirisena and Premier Wickremesinghe will serve in both committees.

Sirisena also hit out at a newly recruited official in the Department of Information whom he described as a very dangerous person. He had made some public remarks about the Dalai Lama, Tibet’s spiritual Buddhist leader. Those remarks have been wrongly construed as the views of his Government, the President pointed out. It was more so since the official was dealing with Government information. The President said he had the Chinese authorities protesting and he found himself in an awkward and embarrassing position. This official had made blunders earlier, Sirisena said and added that he had occasion to once summon him and issue a stern warning. For the second time Sirisena also complained that the state-run media were not supportive of him. He made similar remarks when he addressed the Government Parliamentary Group earlier this month. He said the Government received a collective mandate and should go together. Premier Wickremesinghe who endorsed this sentiment said he had been unaware of the remarks made by the new Information Department official. No sooner he had heard of it, he had spoken to him and cautioned him against making such statements.

Several ministers contributed to the discourse last Wednesday morning. Minister Duminda Dissanayake said that those in the Government should “speak with one voice” – a view that was endorsed by Minister Kabir Hashim. Finance Minister Ravi Karunanayake said he was at a loss to understand why the Opposition groups were stepping up their protests over the VAT increase now. He said 16 out of 17 budget proposals could not be implemented since they were challenged in courts. He raised questions on the progress of investigations into charges against former Central Bank Governor Ajith Nivard Cabraal, the former President’s Chief of Staff Gamini Senarath and the Avant Garde Maritime Services Ltd. Minister Patali Champika Ranawaka said the Government’s leading members were being targeted. He complained that they were using scurrilous language. He named the personalities behind the exercise. Ministers Dayasiri Jayasekera and Mangala Samaraweera also made comments.

On the same Wednesday evening, the troika that oversees the workings of the National Unity Government met. They were President Sirisena, Premier Wickremesinghe and former President Chandrika Bandaranaike Kumaratunga. This meeting of the trio came after a long break and the discussions largely centred on the current political situation and investigations into charges against Mahinda Rajapaksa and members of his family. It was agreed that contrary to a previous move to make a few exceptions, they should go ahead with legal action if there was compelling evidence. Cases against them are to be expedited. For this purpose both the investigative agencies and the Attorney General’s Department are to be so advised. Kumaratunga, who is outspoken, complained that there were inordinate delays in the prosecutions resulting in wrong impressions being created among the people. Other partners of the Government were briefed on the outcome of the meeting of this ‘Supreme Council’ on Thursday.

It was decided that both the UNP and the SLFP should remain united to ensure the Opposition did not drive a wedge to separate them. Amid discussions on investigations into cases involving members of the Rajapaksa family, the Government is also focusing on another aspect — the takeover of a property. This is on the grounds that it is “abandoned.” Investigations against former Minister Basil Rajapaksa for allegedly acquiring two properties through improper means, one in Matara and the other on the banks of the Kelani River in Malwana, both said to be worth over Rs. 90 million, are still continuing. He has denied the accusations. The Matara property, the FCID detectives have found, is in the name of Ayomi Galappathy, a resident of Canada and sister-in-law of Basil Rajapaksa. Though the Malwana property is in the name of Muditha Jayakody, an architect, he has said in a second statement to the FCID that the money he paid to buy it came from Basil Rajapaksa and he did not own the property. He had earlier claimed it was his own. Here again Basil Rajapaksa has denied the claim.

The nearly completed Malwana luxury house on the banks of the Kelani River is the subject of attention now. It transpired during investigations that an auspicious time for the construction of this house was sought by a lady from Sumanadasa Abeywickreme, who was then a celebrated astrologer. He was former President Rajapaksa’s astrologer and predicted Rajapaksa would win the January 8, 2015 presidential election.

Senior investigators have reported to the Government that no one has so far provided proof of legal ownership of the Malwana property and advised that it should therefore be vested in the Government. The AG’s Department has been called upon to closely study the matter and take appropriate action. A senior Government leader, familiar with the investigations and the intricacies of matters legal, came up with this suggestion. A source close to him said whilst a protracted case was likely to continue, the luxury property which is in legal terms “abandoned,” will be testimony to what has been going on under the previous regime. Another matter now under consideration by the Government is the establishment of a separate court to hear cases involving financial crimes.

In the light of Wednesday’s assertions, one could expect a limited ‘thaw’ in the UNP-SLFP relationship. That is by no means to say that everything would be smooth hereafter and continue on a happy note in the weeks and months to come. As is clear, the rapprochement has been forced by the Opposition groups headed by Mahinda Rajapaksa flexing their muscles and more particularly the July 28 march from Kandy to Colombo.

As for the expeditious clearance of cases against members of the Rajapaksa family, the process will involve greater coordination between the investigative agencies and the Attorney General’s Department. At a recent progress review meeting chaired by President Sirisena, it transpired that the Department had been instructed by Government leaders not to file action unless they were “two hundred per cent sure of a conviction.” Thus, investigators say providing detailed information involved time and argued this was why there were protracted delays. They also say that a few investigations or arrests have been stalled or stopped altogether after appeals from political leaders. They did not want embarrassment to themselves when persons known are caught up, said one exasperated investigator. These are not cases involving minor theft, he said underscoring his frustration and the enormity of the money involved.

In the case of the others, there were categories who cannot be arrested, not even acting on the instructions of the Attorney General. Explicit orders to this effect have been issued to them. These include senior public service officials, officer ranks of the armed services, both serving as well as those retired and members of the clergy. This has led to anomalous situations. In the case of one investigative agency, it received instructions with endorsement from an important personality, that the party responsible for corrupt activity be arrested. However, the order not to arrest them arrived in the meanwhile and the file remains in their office.
If the rumblings by the Opposition have united a divided Government, issues where the partners are at variance remain. It came at a time when reports, some credible, circulated about serious divisions between those in the UNP and the SLFP. One such issue was the increase in VAT from 11 per cent to 15 per cent — the issue that has come as a rallying point for the Opposition. Some SLFP Parliamentarians threatened to vote against the Bill in Parliament. A debate on it was originally scheduled for this month but was put off.

The Supreme Court is hearing a petition which, among other matters, challenges the legality of such a Bill which seeks to impose the tax retrospectively. Since the SC has already ruled that the way the VAT was introduced was illegal, it is being argued that an illegal action cannot be righted through retroactive legislation. The debate on the Bill in Parliament now hinges on the outcome of the Supreme Court verdict. If it is in Government’s favour, the Bill is likely to be debated next month. In such an event, it would be a revised VAT that would be introduced in Parliament. The demands for revision, sought by SLFP parliamentarians when they met Sirisena, are to be taken into consideration, a Government source said.

Besides VAT, there are also other worrisome issues over the economy. It has fallen on Premier Wickremesinghe, as Minister of National Policies and Economic Affairs, to resolve an issue involving heavy financial mismanagement under the previous administration. This was after the Ceylon Petroleum Corporation (CPC) entered into hedging contracts with a number of foreign and local banks in 2007 in the belief that they would help face surging oil prices. It was profitable at the beginning but oil prices dropped steeply forcing the CPC to suffer heavy losses. Petitions before the Supreme Court alleged heavy corruption. The SC ordered the suspension temporarily of payments. Deutsche Bank AG filed an arbitration claim with the International Centre for Settlement of Investment Disputes (ICSID) in March 2009.

This Tribunal declared that simple contractual rights are “not protected” but ruled that investments, like the one in question, were. It held that an instrument, a hedging agreement, constituted an ‘investment.’ Deutsche Bank AG was awarded US$ 78,469,623.71 (over 78 million dollars) or Rs. 11.3 billion. Subsequent litigation continued since 2012 with the Government hiring foreign lawyers. Now, the Government reached agreement with Deutsche Bank to pay US$ 26, 562,926.73 or Rs. 4 billion. The Deutsche Bank AG has agreed that it will withdraw any allegations it had made against the Government of Sri Lanka and the Central Bank.
Premier Wickremesinghe recently sought approval from his ministerial colleagues to enter into a settlement with the Deutsche Bank AG by signing a “Settlement Deed.” The Ceylon Petroleum Corporation (CPC) will enter into this agreement. This was after the Attorney General said in a letter to the Governor of the Central Bank on June 17, 2016 that he sees no legal impediment for the arrangement. Yet, despite widespread allegations of corruption, investigations into the hedging deal where billions of rupees of taxpayer’s money are involved, has not been concluded. Similar hedging deals were entered into by the CPC with Standard Chartered Bank. It was awarded US$ 60 million (then Rs 7.5 billion). The Citibank, which also entered into a hedging deal with the CPC went for international arbitration in Singapore but its claim was rejected.

Meanwhile, President Sirisena, acting on a request from Premier Wickremesinghe, has made changes in the resettlement process of those displaced in the separatist war. As reported in these columns last week, the Cabinet of Ministers decided to “include traditional Sinhala villages in the resettlement programmes.” Minister Rishad Bathiuddin was named as Chairman of a Task Force for this purpose. President Sirisena has now made changes to the composition of this Task Force. There will be four co-chairpersons for this task force instead of Minister Bathiuddin alone. The others will be Ministers Duminda Dissanayake, Faiszer Musthapha and D.M. Swaminathan.

The responsibilities of the Task Force have also been amplified. It will be to “include traditional Sinhala villages in the Northern Province and the then threatened villages in adjoining districts which have not been included in the resettlement programmes by the Government and the various donor agencies and include the Trincomalee District in the proposed programme that will be formulated in consultation with the UN HABITAT office as proposed by the Prime Minister.”

Wednesday’s move for the two main partners of the National Unity Government to remain together for the duration of their entire term of office is politically significant but the journey is likely to be an arduous one. Like the issue over a successor to Arjuna Mahendran as Governor of the Central Bank or the imposition of VAT that has hit poorer sections, new issues are bound to crop up. Of course, one could argue that they could be resolved by a dialogue, perhaps by the Committee that has been named to speak with one voice. Already, pro- Rajapaksa SLFP members are dubbing the new arrangement as one that has subjugated their party to the UNP. If such accusations and public confusion are to be avoided, appointing committees, as has been the practice of the Government, is just one small step. If no credible action follows from them, it will end in zero benefits to the Government and even to those who voted it to power.