by Rajan Philips
( August 13, 2017, Colombo, Sri Lanka Guardian) Ravi Karunanayake was defiantly proud of his decision to resign from his portfolio, asserting in parliament that he was doing it for the sake of the government and good governance. No sooner, the Prime Minister was on his feet claiming credit for ushering in a new culture, where Ministers will resign without interfering with the judicial process. There was nothing to be proud of, for he had no alternative but to resign. The pressure was not only on the Minister to resign, but also on the President to fire the Minister if he did not resign. Even UNPers had indicated to the Prime Minister that they would not support the Minister if the No Confidence Motion against the Minister came to vote in parliament. The government managed to use the sub judice bluff to delay the NC motion being taken up for debate, but it could not have delayed it indefinitely.
There is no basis either for claiming that a new governance culture is being born just because Minister Karunanayake has resigned. Nothing that led to his resignation has been explained or answered. Explanations and answers await the findings and conclusions of the Commission of Inquiry. The only good thing that has happened so far on this sordid bond scam matter is the appointment of the ongoing Commission. The Commissioners, and their knowledge and questionings are a blast of fresh air after two years of bluff and bluster. They have been able to stem the adversarial exuberance of literate lawyers, and cut through mumbo jumbo answers suggesting some kind of oracular wizardry in using global financial data to perpetually succeed in bond auctioning in Colombo. One would hope that the Commissioners are given the time to ask and find answers to all hitherto unasked and unanswered questions.
In fairness to Ravi Karunanayake, the matter over which he was proud to resign is not the centre piece of the bond scandal. The source of his undoing is a penthouse sideshow that should have never happened. There is surprising misunderstanding about criminal culpability and ministerial probity. The latter involves a much lower bar to judge than the former. For someone to be a minister, she or he must not only be incorrupt but also appear to be incorrupt. Given his circumstances, Mr. Karunanayake could not have continued as Minister until he is found guilty by a competent court. The penthouse matter may never go to court but the Minister had to go for all the implications that he has tied up with – unknowingly or otherwise.
But the bond matter goes beyond the former minister and the penthouse. In fact, it started even before the present government. The public has a stake and interest in knowing if the current inquiry will be mandated to canvass everything in bond auctioning that happened under the previous government. If not, why not? Will there be a separate inquiry, consistent with the new culture that the Prime Minister has in mind? Otherwise, there will be no new culture but the continuation of the same old quid-pro-quo culture binding the Rajapaksas and UNP leaders, as many have suspected and suggested.
And any positively new culture must also facilitate answers as to why the present government gazetted the Central Bank out of the Finance Ministry not only breaking with tradition but also creating jurisdictional questions involving the Finance Ministry, the Monetary Board and the Central Bank? Were there connections between the gazetted relocation of the bank, the choice of the new Governor, and the bond auctions that followed? How did the government and Central Bank decide on the money that needed to be raised through the issuance of bonds? Was election campaign financing a consideration in the requirement for money? Who were the ministers and others involved in these discussions and decisions? Will the public have the opportunity to hear from each and every one of them, including the Prime Minister? As has been ruefully suggested, what we have is a ‘large government’ and so far only one minister has been summoned to the dock. Needless to add, there is not only a large government, but also a super-large cabinet.
New Culture: Requisites and Prospects
In my article last week, I suggested that the introduction of the open economy has provided a new platform and impetus for corruption on a scale and style unlike anything before. Although I indicated that that it is not the open economy that is to be faulted but its crony beneficiaries and their political benefactors, I did not elaborate on the faultlessness of many who participated in the open economy and benefited from and contributed to it while keeping their hands scrupulously clean and without breaking the law in any way.
Hundreds of entrepreneurs and professionals have been participating in the open economy cleanly and legitimately creating jobs, contributing to the national economy, paying taxes and earning legitimate profits. They have created new export oriented industries and found markets for their products without much help by way of systematic government support. Tens of thousands of people are benefiting from these industries as employees, and contributing to the economy. Ironically, it is the Employees’ Provident Fund savings of these workers that has come under frequent threats from the bond operations of the Central Bank that is supposed to the guardian of these savings.
Any new culture must be grounded on the success and experience of the faultless participants in the open economy, while isolating and rejecting the inducements of crony beneficiaries and political benefactors. There cannot be any new culture without reforming the current procurement and tender practices associated with government purchases and contracts. These practices are not only corrupt but will also result in substandard purchases and infrastructure with questionable economic benefits, risks public safety and the creation of environmental hazards. The new culture must also be predicated on a new system of priorities giving due weight to the traditional sectors of the economy that support large sections of the population, and due scrutiny to property developments promoted by speculators.
Before asserting the birth of a new culture in Parliament, the Prime Minister issued a warning at a political rally in Hatton that “there is no place for thieves in the UNP”. His illustrious kinsman and mentor, President Jayewardene was more realistic and honest when he famously confessed in 1981 after ethnic rioting and looting in the Sabragamuwa Province, that the UNP is a big tent party and so it invariably includes within its ranks: rogues, thieves, criminals and murderers. To this ‘blue collar’ list must be added the ‘white collar’ thieves. Successive governments have since 1977 have been aiding and abetting both categories – from underworld criminals to fraudulent businesses.
The system became institutionalized with the blurring of the boundaries between government and opposition. The same MPs are in both places and they have not been inclined to rock either boat too much. To multiply the metaphor, the ongoing inquiry revelations and the ministerial resignation would appear to have started rocking every boat in parliament. Waves are coming from the outside into parliament, and not the other way around.
The Joint Opposition that staged rally after rally to ‘bring back Mahinda’ is not rushing to rouse the people against the government on the bond issue. It is known that the Rajapaksas were not overly keen about bringing up the No Confidence against Minister Karunanayake. Likewise, many UNPers were not at all keen about defending the beleaguered minister. The JVP finally decided to start directly questioning the role of the Prime Minister in the bond scandal. The TNA would have been in utter quandary if the No Confidence motion had been taken for debate and vote. How long can the TNA sit on the fence between political corruption and constitutional promises? The TNA has its own hands full with corruption allegations rocking the Northern Provincial Council. The President has told his cabinet that he has done everything he could to fulfill his promise to expose and end corruption in government, past and present. The ball is on the Prime Minister’s court. All these are not signs of a new culture being born, but of an old culture in crisis.