The figures and rigours of Helping Hambantota

The CID was told this week that Treasury approval was required for the release of all funds from the controversial 'Helping Hambantota' special account that was created by the Prime Minister's Office from the donations given in the immediate aftermath of the tsunami disaster.

A team of CID detectives questioned the Prime Minister's Secretary Lalith Weeratunge last Thursday following a formal complaint lodged by several opposition UNP MPs on Monday that public funds, especially monies given for tsunami relief work, have been misappropriated by Prime Minister Mahinda Rajapakse.

Mr. Weeratunge, one of the members of the Board of Management appointed by Premier Rajapakse to manage the special fund for the Hambantota district, is reported to have shown CID officers a letter dated February 3, 2005 where he had written to the Deputy Treasury Secretary explaining the background for setting up the 'Helping Hambantota' special account from the tsunami donations given, its operational mechanism, and how the approval of the Treasury will be required to pass all funds maintained in that account.

The letter had been written the day after Prime Minister Rajapakse had 'informed' the cabinet that Rs. 82 million had been ear-marked in a special account for relief work in the Hambantota district, and obtained the tacit approval of the cabinet for this account.

The next week, the cabinet is reported to have deliberated on the matter again, and its decision of that date has been communicated to him as stating that all future donations (i.e. the Sinhala word 'labena’) should be credited to the National Fund for Disaster Relief. This Fund was opened under the Central Bank.

Mr. Weeratunge is reported to have taken up the position that a series of factors showed that part of the tsunami relief monies being diverted to a separate account for the Hambantota district had been done in good faith.
He had said that first of all there had been an emergency situation, for which there had been no accounting procedure laid down. The Prime Minister had been in charge of the situation (in the absence of President Chandrika Kumaratunga who was holidaying in Britain when the tsunami hit Sri Lanka).

People had been streaming into 'Temple Trees', the official residence of the Prime Minister and making donations, some of them had said that the monies should be specifically given to the Hambantota district, one of the worst hit.
The first donation in cash was received on December 27, 2004. As there was no special account opened by the government at that time, the prime minister had directed Mr. Weeratunga to accept donations in cash and cheques into the official bank account of the Secretary to the Prime Minister and duly acknowledge receipt of same and issue of official receipts. By the end of the day on December 27, 2004, eleven donations had been received, five of them in cheques. Plan SriLanka Country Office was among the five organizations that provided financial assistance by way of cheques on this day.

Plan SriLanka Country Office by a letter dated December 27, 2004, requested that its donations totalling Rs. 10,314,000 be specifically used for Hambantota. A list of the donors who specifically requested that funds be allotted for Hambantota was later published in the newspapers particularly in the Lake House newspapers, of February 2. It is these requests of various individuals and organizations that prompted the creation of Hambantota Tsunami Disaster Relief and Development Programme also known as Helping Hambantota through a special account under the preview of the Rajapaksa Memorial Educational and Social Services Foundation, a foundation established by an act of parliament, No.23 of 1998. This act has been published in the Sri Lanka Gazette of May 22, 1998.

The account, 01-1237322-01 was opened at the Rajagiriya Branch of the Standard Chartered Bank by the relevant officials of the above foundation. The foundation has the power to accept as well as to request donations of all forms. By December 31, 2004, a total of Rs.73,926,516.74 had been donated to the official account of the Secretary to the Prime Minister. Certain cheques had not been realized by then as some cheques were in US dollars.

From December 27, 2004 onwards, various government ministries, departments, statutory boards and other agencies also started receiving funds from employees and well wishers. State and private television channels requested for donations of all kinds and even went on to the extent of publicizing their bank account numbers through public notices. To regularize these accounts, Secretary to the President in his letter titled,“Bank account to accept cash donations” reference no. PA/272 of December 29, 2004 designated a bank account at the People’s Bank to credit all monies received by government agencies and also appealed to the public to make their donations to this account.As donations continued to be made to the Prime Minister and subsequently handed over to the PM’s office accountant for issuing of official receipts to the donors concerned, it was thought prudent to open a special account in the PM’s office under the name “PM’s Punarjeewana Fund” to facilitate accounting procedures in respect of these donations.

The account of the Secretary to the Prime Minister usually receives monies from the Consolidated Fund and revenue from any sales of auctioned items, etc. Donations of this magnitude and scale have never been experienced by the government, particularly the Prime Minister’s office and therefore the special account was thought to be the best way to duly account for the monies received as tsunami donations. Signatories to the account were all public officers in the permanent cadre of the PM’s office. They included the Secretary to the Prime Minister, Additional Secretary, Senior Assistant Secretary and the Accountant. The account 014100170136270 was opened at the People’s Bank, Union Place by the accountant under Mr. Weeratunga’s supervision. The purpose of this fund was to be a transitory account until donations received were duly transferred to designated accounts.

Even after the circular of the Secretary to the President was issued, monies were being handed over to the Prime Minister by various individuals and organizations. Among these, Chevron Texaco Global Lubricants on January 11, 2005 handed over a cheque for US$50,000 requesting in writing that this amount be utilized specially for Hambantota as it was one of the most-affected areas.

On or about January 18, 2005, the PM’s Office was aware that the Helping Hambantota Programme had entered into a number of MoUs to build houses for the affected in the Hambantota district.

As there were many requests that funds donated by individuals and organizations be specifically used for Hambantota, Hambantota Tsunami Disaster Relief and Development Programme (HTDRDP) was identified as the logical recipient for dedicated funds to Hambantota. And as a number of MoUs had been signed by HTDRDP, Rs.82, 958,247.70 was transferred to the bank account name of which Helping Hambantota (referred to earlier) by the PM’s Office to undertake rehabilitation work. This was on January 31, 2005. Mr.Weeratunga said he also issued a letter of instructions to the accountant of the Helping Hambantota on how the funds should be expended. It required every voucher on expenditure out of the funds allocated by the PM’s office to have his approval. This, in his opinion, ensured transparency and adherence to government accounting procedures as any voucher so presented would have gone through the accounts division of his office. As he was aware of requests made by various donors in the presence of the Prime Minister and many officials of the Prime Minister’s office, he indicated to his accountant what donations were meant specifically for Hambantota.

On the same day, i.e. January 31, 2005, a cheque for Rs.28, 363,135.04 was issued to the National Fund for Disaster Relief, Account No. 4669 at the Central Bank. On February 2, 2005, full page advertisements were placed in the national daily newspapers in both Sinhala and English, clearly making it public, the details of donations made by various individuals, i.e., names of the individuals\organisations. These advertisements also provide details of how monies were allocated, again informing the public what donations were channelled to Hambantota Tsunami Disaster Relief and Development Programme and what were channelled to the Central Bank’s National Fund for Disaster Relief.

Some donors informed his office that their donations were not indicated in the newspaper advertisement. On checking it was found that the cheques they had presented had not been realised at the time the advertisement was placed. Also, by placing the advertisement they enabled any donor to indicate their preference whether their funds should be allocated to the Hambantota Rehabilitation as per their understanding or whether they were meant for the national disaster relief.

On February 3, 2005, Mr. Weeratunga received a letter from the Rajapakse Memorial Educational and Social Services Foundation on behalf of the Helping Hambantota Programme, attaching a proposal to undertake rehabilitation work. And he had already issued instructions to the accountant, Helping Hambantota programme, that they had to seek his approval for any expenditure to be incurred from the funds allocated by the PM’s office. That is the reason why this proposal had been submitted. As he was aware that a Board of Management would be appointed to oversee the Helping Hambantota programme, he wrote on February 7, 2005 to the Acting Secretary of the Rajapakse Memorial Educational and the Social Services Foundation that once a Board is appointed a decision would be taken on the proposal and therefore to incur expenditure out of the funds received by the Helping Hambantota programme from sources other than the Prime Minister’s office. This was to ensure that the allocation from the PM’s office was spent, adhering to the guidelines of the government accounting and on the specific approval of the Secretary to the Prime Minister and the General Treasury.

On February 26, 2005 the Premier appointed a four-member Board of Management comprising Reinzie Wijethilake, Hatton National Bank Chairman, Shasheendra Rajapakse, Private Secretary to the Premier, M.M.M. Mowjood, Accountant Road Development Authority and Mr. Weeratunga to manage the Hambantota Tsunami Disaster Relief & Development Programme effectively, efficiently and with transparency. The spirit of the letter was to ensure the expenditure out of the monies allocated by the PM’s office is according to accepted accounting procedures, according to Mr. Weeratunga.

The board could not meet until March 9, 2005 as members were not available due to various engagements. When the board met for the first time Mr. Weeratunga apprised them of the existing situation. The request\proposal was submitted to Mr. Weeratunga for approval.

After he explained the circumstances under which he requested the Helping Hambantota Project to incur expenditure out of funds received by them from sources other than the PM’s office, the board decided to set apart PM’s office allocations for the future infrastructure needs of the large number of housing programmes undertaken by various local and foreign donors in the Hambantota District through already signed MoUs.

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