Zero Transparency in Foundations Created by Parliamentarians

By Mimi Alphonsus

Many Members of Parliament, including current Cabinet Ministers have been using their parliamentary privileges to set up untraceable foundations. The TimesOnline found that in the last decade at least 18 such foundations with patronage of politicians had not been registered with any authority.

Typically, charities and foundations are created by registration under the Companies Act as a company limited by guarantee and under the Voluntary Social Services Organization (Supervision and Registration) Act. 

However, parliamentarians have the special privilege of creating foundations through “incorporation bills”. Being relatively uncontroversial and ostensibly for charitable causes, these bills are rarely objected to by other parliamentarians and most of the time not voted on at all, according to Nevanka Jayatilleke Research Manager of manthri.lk, Verité Research’s parliamentary watchdog. Thus they slip into existence without oversight.

Despite many incorporation bills explicitly including a clause that they come under the VSSO Act, the TimesOnline found that most had failed to register with the relevant authority, the NGO Secretariat. Sanjeeva Wimalagunaratne, the Director General of the NGO Secretariat said that he submitted a letter to the Speaker of Parliament on June 24th asking that these organisations register with the Secretariat immediately.

A total of 18 foundations created since 2014 are neither registered with the companies registrar, nor with the NGO Secretariat--they are effectively untraceable.

The lack of traceability is cause for concern. The vast majority of incorporation bills creating such foundations have a vague mission statement but do not contain so much as an address or responsible person. Despite this, they are empowered to give and receive money, purchase property, and operate bank accounts.