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Auspicious times or not, Sri Lanka certainly rang in 2018 singularly inauspiciously as damning revelations of the monumental financial scam right in the bowels of the nation’s Central Bank were revealed to a badly shell-struck public even as the New Year had scarce been allowed to draw its breath.

Fairy tales on battling corruption
The contrast could not be more grotesque. On the one hand, grizzled farmers stood in the scorching sun, pitifully roaring that they were being reduced to beggars as they could not farm their paddy lands without fertilizer. On the other hand, Colombo became the epicenter of a perfect example of how millions can be plundered by slick crooks in immaculate suits and designer watches.

Even as the revelations unfolded, who could be blamed for being cynical regarding promises to recover the loot of the Rajapaksas stashed away in foreign banks? What credibility, the reform of the law couched in abstract if not esoteric terms when even existing laws on gross corruption are deliberately undermined in order to serve selfish political agendas? Who believes these fairy tales?

Those in power may bluster that they will continue to hold on to power till 2020. But they have frittered away an enormous amount of goodwill with which the Government was elected into power. As each crisis unfolds on top of another, the cumulative impact is disastrous.

Cover-up bad as the scam itself
President Maithripala Sirisena’s summarizing of the final report of the Presidential Commission of Inquiry into the issue of Treasury Bonds of the Central Bank of Sri Lanka (CBSL) this week illustrates one stage of an utterly disgraceful saga of events. Let us not forget that the attempted cover up of the scam was as bad as the scam itself. For that, the Government must take full responsibility, include those ‘talking heads’ of the United National Party who inserted ‘footnotes’ in the earlier report of the Committee on Public Enterprises (COPE) headed by JVP parliamentarian Sunil Handunnetti on the Treasury bond matter.

At that time, unconvincing protests by these ‘talking heads’ on national television were that, at best, what had occurred between the father-in-law (former Governor of Central Bank, Arjuna Mahendran) and the son-in-law (head of Perpetual Treasuries Arjun Aloysius) was a petty conflict of interest. Outrage was expressed and scandalized eyebrows were raised at the very idea that financial skullduggery had been committed.

Well, now with the findings of the Commission out in the public domain, it is clear that these excuses were a weak cover-up for what had actually transpired. Let it be said that attempts to cover-up were equally as disgraceful as the behavior of those named by the Commission for being directly implicated in the scandal.

Enormity of the fraud
The enormity of the fraud that had been committed will no doubt, take time to sink into the nation’s consciousness. As the statement by the President reveals, the Commission’s findings were deadly. Its mandate was to inquire into the issuance of treasury bonds during 1st February 2015 to 31st March 2016, to ascertain the facts regarding allegations of corruption and mismanagement and to recommend steps to be implemented in the future.

Former Governor of Central Bank, Arjuna Mahendran was castigated for interfering into Treasury bond auctions ‘through a process of incorrect and unconventional methods.’ Affirming that he was responsible for providing internal information to outsiders, allowing his son-in-law of Perpetual Treasuries to obtain undue and illegal monetary gains of an extent that is monumental, CBSL officials and ‘some external parties’ were also held to be implicated.

The Commission recommended criminal and civil court action by the Criminal Investigations Department and the Commission to Investigate Allegations of Bribery or Corruption against the implicated individuals including against former Finance Minister Ravi Karunanayake. This barefaced robbery of public funds was assessed as having started even earlier, from the time of former President Mahinda Rajapaksa in 2008. It was recommended that the Central Bank of Sri Lanka conduct a forensic audit with regard to alleged fraud and corrupt practices from 2008 onwards with legal action to be taken consequentially. It is stated that it was during this time that funds of the Employment Provident Fund (EPF) had been mostly lost.

No ‘political’ directions required
Meanwhile the question as to what legal consequences should follow from the Commission findings led to much scratching of confused heads, some of it engineered but some undoubtedly genuine. Should the President ‘direct’ the Attorney General to take action on the report? And what meanwhile of the Prime Minister whose response was that the report of the Committee on Public Enterprises (COPE) headed by JVP parliamentarian Sunil Handunnetti on the Treasury bond matter had been referred to the Attorney General on October 31, 2016, (compromised footnotes and all, we would presume)?

The law itself is, of course, clear. The President or the Prime Minister is not required to ‘direct’ anything in terms of the law. Neither is the media required to speculate on that basis. Section 23 of the Commissions of Inquiry Amendment Act, No 16 of 2008 categorically states that ‘it shall be lawful for the Attorney-General to institute criminal proceedings in a court of law in respect of any offence.-based on material collected in the course of an investigation or inquiry or both an investigation and inquiry, as the case may be, by a Commission of Inquiry appointed under this Act.’ Importantly, this is affirmed as operating ‘notwithstanding anything to the contrary in the Code of Criminal Procedure Act, No. 15 of 197 9 or any other law.’

It was precisely due to the impact of the Commission proceedings on an eventual criminal prosecution that the head of Perpetual Treasuries Arjun Aloysius was permitted by the Commission to plead the privilege against self-incrimination when an imaginative counsel advanced the same on his behalf before the Commission. Opinions may differ on whether Aloysius should have been allowed the benefit of that privilege or not as the case may be. But the fact that the law must now be activated is without a doubt.

Rascally politicians must not be allowed to escape
No doubt this is perhaps the very first Commission Report which took Sri Lanka metaphorically by its neck and forced it to see an ugly truth. But it must not end there. A hapless Attorney General must not be left to hold the blame with rascally politicians wriggling clear of the consequences.

The President cannot merely talk of corrupt politicians from both major parties and pledge that he ‘would not hesitate to take steps to recover the loss’ caused to the government and take legal action against the offenders.’ The reservoir of good faith with which promises were believed in the past has now run dry. There is a serious crisis of public confidence in both the Presidency and the Government. That must be addressed forthwith.