Corruption in Sri Lanka, deeply entrenched spans govts, Airbus, PTL emblematic: Eran

ECONOMYNEXT – Corruption has become deeply entrenched and has become so systemic in Sri Lanka in recent years, that it is spanning changes of government, as has been shown in the cases of the Airbus deal and bond scams, ex-minister and legislator Eran Wickramaratne said.

Sri Lanka’s Attorney General had called for the arrest of ex-Chief Executive of SriLankan Airlines Kapila Chandrasena for money laundering after the Airbus revelations. He has also asked for the bribery commission to look into the transactions.

Endemic Corruption

“The revelation that commissions were paid to Sri Lankan Airlines officials and connected parties is not surprising,” Wickremeratne said.

“It was always suspected particularly in the case of the 2013 agreement. It is very difficult for such inquires to come in a domestic inquiry because political authorities who are connected to corruption usually suppresses.”

“Corruption is endemic in the system and there is a lot of system corruption that spans different governments.”

The corruption has come into the open due a foreign investigation in the UK, France and US into Airbus.

He said it was “disturbing” that the agents who got commission through the Airbus deal was still active and still appeared to be trying to influence SriLankan after a change of government.

SriLankan was briefly overseen by Wickramaratne in the latter stages of the last administration on a direction by the then President.

“Now it is also disturbing to note that even after the change of government, the agents who were involved in based on the agreement in 2013 was active and had come to arrangements with Airbus in 2015.”

Wickremeratne said a similar situation had been seen in the case of the so-called ‘bondscam’ where Perpetual Treasuries and connected parties had been working for a long period together and built up links that only came to light in 2015.

Exposed by Democracy

“Much has been said about the bond scams of 2015 and 2016,” he said. “That came to light due to the democracy and the transparent environment that was created and the media was able to highlight it.”

A Presidential Commission of Inquiry and forensic audits appeared to show that Perpetual Treasuries and related companies had been working with fund managers at the Employees Provident Fund to dump securities at high prices from a long period.

But the practices had not stopped.

“These were fraudulent practices have been practiced for many years, and they have been evident in forensic audits done recently. It was shown that investments were made without analysis and approvals,” Wickramaratne said.

“There were accusations against officials, starting from Governors, involved in making decisions these decisions in both periods; during the period of our government and during the period of the previous government.

“So this spans governments. It is clearly endemic, it is clearly systemic and it has to be dealt with.”

Though corruption had rapidly worsened in the two decades or so – especially at state owned enterprises (SOEs) where financial regulations are less tight – the primary reason that it cannot be countered is the breakdown of the government’s institutional framework, that destroyed the separation between politicians and the public service, critics have said.

Permanent Secretaries

When corruption was at lower levels before the 1970s and quick actions was taken when it did happen ministries, including police, were headed by permanent secretaries, who stood their ground and acted correctly.

They were appointed, transferred and disciplined by a civil service commission of peers, ensuring that resisting corruption and unreasonable directions from politicians ensured their jobs.

The civil service commission was busted by the 1972 constitution. They were directly appointed by the President in the 1978, which led to the rapid deterioration of the public service as earlier set of officers retired.

Sri Lanka’s Auditor General Gamini Wijesinghe had said that the lack of permanent secretaries was a key reason for the rapid rise of corruption in recent years.

“Actually that is the issue,” Wijesinghe told reporters in 2018. “The ending of the institution of permanent secretaries from Sri Lanka (thuran karala) and creating facilities to appoint one’s henchmen as ministry secretaries is the main issue (pradanathama karya).

“A situation has arisen where he dances to the tune of the minister (amathiwarayater owner vidiyerter nutterner), going above the law (neethiyer abhibabawar).

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Sri Lanka’s ministry secretaries who were is effectively the chief accounting officer also resisted provisions of an audit bill that the country originally drew up, officials at the AGs department complained at the time.

The Pool

The secretaries who were impermanent had been transformed from upright officer who had tenure security to those who would be sent to the ‘pool’ promptly if they resisted unreasonable or corrupt dictates of political authorities.

“Actually a public officer should be willing to go the pool,” Wijesinghe said at the time. “They can get the salary and read the book of past lives of the Lord Buddha (Pansiya panas Jathakaya).

Sri Lanka’s Organization of Professionals also recommended that permanent secretaries be re-introduced.

“Secretaries to Ministries should be appointed after applications are called by the Public Service Commission from the public including ‘senior management groups’ of public sector and Private Sector,” a revised summary of a report by committee of the Organization of Professional Associations said.

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“Such appointments are to be Permanent to the extent that they may be removed only by the Public Service Commission for reasons adduced.

“This will not make them necessarily permanent, but it will free them from political pressures and arbitrary changes.

“The Public Service Commission should have Rules of Procedure which will strengthen its independence when confronted with what it sees as unreasonable requests.”

Sri Lanka set up a Constitutional Council to make senior appointments, but it does not cover ministry secretaries. In a tragi-comedy, Sri Lanka lacks not just permanent secretaries, but also permanent ministries.

Territories like Hong Kong, which gained fame in Asia for its anti-corruption commission also had permanent secretaries.

So has Singapore, which was inherited from British rule. Sri Lanka’s famed civil servants of yesteryear also came from the system inherited from the British until 1972.

Civil Service Mandarins

The British copied and improved a system they found in China (Guozijian) and also Vietnam (Quốc Tử Giám), where Mandarins or scholar-bureaucrats were appointed from the cream of the Confucian “Schools for the Sons of the State’ who earned what were the world’s first doctorates.

The Chinese system was improved and formalized and the British Civil Service was set up as recommended by the (Northcote-Trevelyan))Report.

This later gave rise to the term ‘Whitehall Mandarins’ in reference to top civil servants.

In their 1853-4 report, Northcote and Trevelyan observed that frequent changes of public officers was a “matter of sufficient notoriety”, to require reform.

“…[T]he government of the country could not be carried on without the aid of an efficient body of permanent officers…duly subordinate to…Ministers…yet possessing sufficient independence, character, ability and experience to be able to advise, assist, and to some extent, influence those who from time to time set over them.”

The career civil servants – ending a previous system of granting so-called sinecures – helped end corruption and mistreatment of ordinary citizens through arbitrary action first in Britain and later in the Empire.

However independent rulers of Sri Lanka did not know the history or reasons behind the system they inherited from the British broke it claiming that ‘bureaucrats’ obstructed them, when they attempted to engage in arbitrary actions. (Colombo/Feb06/2020)