SPECIAL REPORT : Part 491
USD 73 mn down the drain?
The US Embassy is on record as having said that USAID conducted a project at a cost of USD 73 mn during the Yahapalana administration (2015-2019) to enhance the efficiency of lawmakers and be responsive to the people they represent. In terms of this project, 50 Research Assistants of the Sri Lankan Parliament participated in a US-supported workshop meant to help MPs better hear and address the concerns of their constituents. The then US Ambassador Atul Keshap was quoted in an Embassy statement as having declared: “Developing the skills of Parliamentary staff helps MPs better serve the people” said US Ambassador Atul Keshap.“In turn, this will foster and strengthen the principles of good governance”, Ambassador Keshap added.
Both USAID and Sri Lanka Parliament should examine whether this particular project, as well as other programmes conducted since 2015, improved the quality of MPs and Ministers.
By Shamindra Ferdinando
At least on paper the subject of public finance is under the total control of Parliament. Chapter XVII of the Constitution forms the foundation of Parliament’s powers over all public finances. Parliament powers and authority over public finance are dealt by Article 148, Article 149, Article 150, Article 151, and Article 154R.
In terms of the Right to Information (RTI) Act (12 of 2016), The Island sought information from Parliament as regards projects implemented by external sponsors for Sri Lanka’s benefit over the years.
These foreign-funded projects were essentially meant to strengthen good governance, accountability, build civil society capacity et al. The publication of a clarification was requested on Sept. 05, 2023, in the wake of Parliament claiming, the day before, that it would receive USD 300 mn through a new cooperation framework for development programmes over the next five years. The announcement was made on Sept. 04, referring to newly appointed United Nations Resident Coordinator to Sri Lanka Marc-André Franche congratulating Speaker Mahinda Yapa Abeywardena on the adoption of the Anti-Corruption Act and the establishment of the Parliamentary Budget Office. They met on Oct. 01, 2023 with the participation of the Secretary General of the House Kushani Rohanadeera.
Despite having to eat humble pie, the House issued a clarification to correct its exaggerated communique when it was published in The Island, under the heading ‘Parliament to receive UN funding amounting to over USD 300 mn’ (Sept. 05, 2023 edition, The Island). Its Director, Legislative Services/Acting Director (Communications) Janakantha Silva on Sept. 06 stated that the USD 300 mn referred to in the previous statement, dated Sept. 04, 2023, was meant for all development programmes, not only for Parliament. The official didn’t indicate the amount allocated to Parliament.
As per our separate request for information, Parliament responded to five out of eight questions submitted in Sinhala by the writer. Of the three unanswered, the one that referred to Parliament was considered irrelevant by it, while declining to respond to the remaining two. The Island also sought information from the US Embassy in Colombo, as well as the EU mission here, as regards the funding made for various projects. Let me examine their responses against the backdrop of harsh criticism of Parliament for its failure to ensure control over public finance. Justice Minister Dr. Wijeyadasa Rajapakshe, PC, and Mahindananda Aluthgamage, MP, both elected on the Sri Lanka Podujana Peramuna (SLPP) ticket at the last parliamentary election in Aug. 2020, accused Speaker Mahinda Yapa Abeywardena (SLPP) of neglecting his duties and responsibilities as Chairman of the Constitutional Council (CC). They lambasted the CC as an utterly useless corrupt body. The CC consists of the Speaker, Premier Dinesh Gunawardena, Opposition Leader Sajith Premadasa, Nimal Siripala de Silva (President’s nominee), Sagara Kariyawasam (PM’s nominee), Kabir Hashim (Opp. Leader’s nominee), Dr. Prathap Ramanujam (nominated by PM and Opp. Leader), Dr. Mrs. Anula Wijesundere (nominated by PM and Opp. Leader) and Dr. Dinesha Samararatne (nominated by PM and Opp. Leader).
The CC hasn’t been able to appoint the 10th member due to disagreement between the Tamil National Alliance (TNA) and the rebel members of the SLPP parliamentary group. Lawmakers Rajapakshe and Aluthgamage went to the extent of declaring that those who had set properties, belonging to members of Parliament, ablaze in May last year should target CC members hereafter. They should be reminded that of the 10 members of CC, seven represented Parliament. The duo lambasted the Commission to Investigate Allegations of Bribery and Corruption (CIABOC) over its failure to address the issues at hand while also targeting revenue collecting authorities, namely the Inland Revenue, Customs and Excise Department. Dr. Rajapakshe declared that the country didn’t have to depend on the USD 2.9 bn bailout package if those responsible for revenue collection achieved what they were duty bound to do. Both lawmakers alleged that the entire revenue collection setup was corrupt at every level. The former President of the Bar Association charged that even junior employees of above-mentioned state institutions are procuring luxury apartments, while Aluthgamage accused a department head of owning property in the US and living a super luxury life.
- Mahinda Yapa (Since 2020)
- Ex-Speaker Karu Jayasuriya (2015-2019)
Parliament responds
(1) The Island: Would it be possible to know the agreements Parliament reached with foreign governments and organizations following parliamentary polls in 1989, 1994, 2000, 2004, 2015 and 2020 and the estimated worth of those projects?
Parliament:We work with the following partners since 2016, namely United Nations Development Programme (UNDP), Westminster Foundation for Democracy (WFD), United States Agency for International Development (USAID), SLPP-Sri Lanka Parliament Project (concluded in Sept. 2016), Strengthening Democratic Governance and Accountability Project (concluded in Nov. 2016), Inclusive Participatory Processes Project (IPPP), National Democratic Institute (NDI), International Republican Institute (IRI) and Friedrich Naumann Foundation for Freedom (concluded). Projects were carried out in line with agreements sans funds made available to Parliament. (Their response meant that there hadn’t been such projects prior to the advent of the UNP-SLFP coalition aka Yahapalanaya)
(2) The Island: What were the purposes of these projects and the years of implementation?
Parliament: With the backing of the UNDP, we implemented a three-year project (2017-2019) to meet /strengthen constitutional requirements within the parliamentary system and the same was extended for a further three-year period (2020-2023). (Interestingly, Parliament made no reference to high-profile USAID funds to strengthen accountability and democratic governance. The US Embassy is on record as having said the three-year project worth USD 13 mn – Rs 1.92 bn – announced in late Nov. 2016 was meant to broaden their support to the independent commissions, Ministries, and provincial and local levels of government as well as equal participation by men and women and other underrepresented groups in politics and leadership.)
(3) The Island: Were those foreign- funded projects subjected to audits and, if so, by whom?
Parliament: There was no need for an audit as sponsors provided experts for relevant programmes intended to improve and enhance knowledge and capacity of lawmakers and other parliamentary workers, foreign tours and other required services.
(4) The Island: Why weren’t they audited?
Parliament: Irrelevant as explained earlier.
(5) The Island: Is there a laid down procedure to finalize projects funded by external partners?
Parliament: The UNDP funded project, launched in June 2016, was meant to achieve seven objectives while also working with other development partners. There objectives were (1) strategic plans for Parliament (2) strengthening of Oversight Committee System and enhancement of lawmakers’ skills development (3) improvement to parliamentary procedures and their use (4) strengthening of research and policy examination (5) public relations and public participation in law process (6) strengthening of constitutional and administrative systems/structures and (7) increase in women representation in Parliament and thereby increase their role in the decisionmaking process.
(6) The Island: How many computers were received from China for members of Parliament and House officials during Yahapalanaya and their cost?
Parliament: We received 268 computers worth USD 287,491.64.
(7) The Island: India provided SLR 300 mn to build a village in memory of the late Ven. Maduluwawe Sobitha Thera who passed away in late 2016, having played a significant role in the 2015 change of government. The money was provided on a request made by Yahapalana Speaker Karu Jayasuriya. Were you able to complete that village building project?
Parliament: As Parliament didn’t have information regarding the said project, therefore the question cannot be answered.
(8) The Island: Did Parliament reach an agreement to spend UNDP funds (funds allocated from the USD 300 mn to be spent over a five-year period) with the participation of political parties represented in the current Parliament?
Parliament: As Parliament didn’t have information regarding the said project, therefore the question cannot be answered.
US Embassy explains
The US on Sept. 20, 2023 announced a further commitment of more than USD 19.23 mn (Rs 6.2 bn) in additional funds for bankrupt Sri Lanka. The US Embassy in Colombo declared that fresh funding made through USAID would support economic growth and democratic governance activities. The US has provided more than $2 billion (nearly Rs. 720 billion) in assistance to Sri Lanka since 1956. The writer sought to clarify some issues with the US Embassy.
Q: Would you please explain /describe ‘democratic governance activities’ referred to in the press release, dated Sept. 20, 2023. Have you reached consensus with the government on a set of such activities?
Embassy spokesperson:
USAID works in partnership with Sri Lanka and its government to strengthen inclusive governance, build a robust civil society, and promote the rule of law. USAID also works to improve Sri Lankans’ access to balanced and reliable news and partners with the government and the people of Sri Lanka to strengthen dialogue between multi-ethnic communities. In addition, USAID builds local capacity for disaster response and risk reduction.
Q: The USAID and Sri Lanka Parliament signed an agreement worth USD 13 mn in late 2016 to strengthen accountability and democratic governance. It was implemented over a period of three years. Did that project achieve anticipated objectives?
Embassy spokesperson:
The Strengthening Democratic Governance and Accountability Project (SDGAP) was a three-year (October 2016 to September 2019) USD13 mn project funded by USAID. It was developed and implemented in close consultation and collaboration with the government and Parliament of Sri Lanka. SDGAP helped the government to strengthen public accountability systems, improve government strategic planning and communication, policy reforms and implementation processes and, increase political participation of women and underrepresented groups in democratic governance. It also supported the government to strengthen communication with citizens and incorporate public participation in policymaking.
Q: If possible, please let me know the funds the US spent on the MCC project though it was not implemented
Embassy spokesperson: The United States did not sign an MCC compact with Sri Lanka in 2020 due to a lack of partner country engagement. The grant funds that had been intended for Sri Lanka were later reallocated to other eligible countries with economic development priorities to reduce poverty and stimulate growth.
Massive investments made by the UNDP and US through Parliament and elsewhere to strengthen democracy, good governance and accountability here appeared to have made no impact. The declaration of bankruptcy in May last year and the country having to bend its knees before the IMF for the 17th occasion proved that the Parliament hasn’t learnt a thing at all. Recent allegations that the CC had pathetically failed in its duties and responsibilities underscored the responsibility of the donors to be tough with utterly corrupt political leadership here. They, too, should be responsible for their taxpayers without using such funds to sabotage those countries by way of getting rid of regimes their own ‘Deep State’ find not to their liking or on other diabolical plans, especially to get those poor countries to toe their line.
Intrepid former Auditor General Gamini Wijesinghe said that Parliament should be held accountable for the ruination of the country. Wijesinghe, who held that post from Nov. 2015 to April 2019, said that the Sirisena-Wickremesinghe coalition diluted the National Audit Bill to such an extent that the enactment of the new law in July 2018 didn’t make any difference though that was a promise given by the Yahapalana campaign at the 2015 presidential election.
Wijesinghe recalled that despite the then government claiming foreign investment in various projects to strengthen good governance and accountability, hadn’t achieved anything at all. Declaration of bankruptcy in May 2022 amidst unprecedented turmoil proved the Parliament hadn’t met two primary responsibilities, namely control over public finance and enactment of new laws. Instead, the Yahapalana government abolished the time-tested 1953 Foreign Exchange Act in 2017and enacted a new Act that diluted regulatory powers exercised by the Central Bank. The accusations made in Parliament and outside that export proceeds amounting to over USD 50 bn that had been “parked abroad” should be examined taking into consideration the Parliament created an environment conducive for such unscrupulous practices.
Wijesinghe warned that further foreign investments would be wasted unless required constitutional amendments and new laws were enacted.
BASL action
The Bar Association, during Saliya Pieris’ tenure as its President, filed two fundamental rights applications in late March 2022 to pressure the then government to take tangible measures to address the developing economic crisis. The SC was moved against the government a few days before violent protests erupted outside the then President Gotabaya Rajapaksa’s private residence at Pangiriwatte, Mirihana. The BASL made the Attorney General, the Cabinet of Ministers, the Governor of the Central Bank, the Secretary to the Treasury, Secretaries to several Ministries, the Ceylon Electricity Board, the Ceylon Petroleum Corporation and the State Pharmaceutical Corporation as respondents. There hadn’t been similar action against the government before. These petitions were filed by Saliya Pieris PC, Deputy President Anura Meddegoda PC, Secretary, Rajeev Amarasuriya, Treasurer, Rajindh Perera and Assistant Secretary Pasindu Silva. By late Oct. 2022 however, the BASL decided to suspend action taken against the government. When the writer sought an explanation from the BASL as to why the cases that had been filed over the deterioration of the economy as the situation remained critical, Pieris said on Nov 02, 2022: “It was laid by not withdrawn. Our Counsel thought that at the moment there is nothing the court can do further. It can be revived again.” The BASL move eased pressure on the Wickremesinghe-Rajapaksa government.
The IMF prerequisites for the resumption of the bailout package meant that the government hadn’t taken measures to prevent those in authority from continuing waste, corruption, irregularities and mismanagement. That is the undeniable truth. State Finance Minister Shehan Semasinghe’s explanation does not hold water at all. The Anuradhapura district lawmaker should realize that the economy is in such a messy situation his efforts both in and outside Parliament sounds hollow. He is trying to defend the indefensible. The IMF prerequisites underscored that the lending body had absolutely no faith in the powers that be at every level. In fact, the IMF declared that the international community didn’t have confidence in the system in place.
The IMF’s Governance Diagnostic Assessment report is nothing but an indictment on Sri Lanka at every level and the most significant roadblock to financial recovery lies in Sri Lanka’s persistent failure to address its deep-rooted corruption. The following are the IMF’s demands (1) Establishment of an Advisory Committee by November 2023 to nominate commissioners for the Commission to Investigate Allegations of Bribery or Corruption (CIABOC) (2) Disclosure of asset declarations of senior officials by July 2024 (3) Enactment of proceeds of crime legislation by April 2024 (4) Amendment of the National Audit Act (5) Finalization of implementation of regulations for beneficial ownership information and creating a public registry by April 2024 (6) Enactment of Public Procurement Law by December 2024 (7) Publishing reports on increasing competitive tendered procurement contracts, targeting agencies with low levels of competition (8) Requiring the publication of all public procurement contracts above LKRs 1 billion (9) Implementing the State-Owned Enterprise Reform Policy to ensure ethical management (10) Abolishing or suspending the Strategic Development Projects Office Act until a transparent process for evaluating proposals is established (11) Amending tax legislation to prevent unilateral tax changes without parliamentary approval (12) Implementing short-term anti-corruption measures within revenue departments to enhance oversight and sanctions (13) Exploring options for new management arrangements for the Employees Provident Fund to avoid conflicts of interest (14) Revising legislation, regulations, and processes for stronger oversight in the banking sector (15) Establishing an online digital land registry and ensuring progress in registering/titling-state land and (16) Expanding the resources and skills available to the Judicial Service Commission to strengthen justice.
It wouldn’t be fair to blame the Wickremesinghe-Rajapaksa government for the economic fallout. In fact, the SJB MPs who previously served the UNP and SLPP rebels, too, should be held accountable as all political parties, including the TNA and JVP, also contributed to the crisis but in varying degrees.
Actually, high profile foreign-funded projects are a mystery as the executive and legislature continued to cause further economic deterioration. A few months before the “public” chased out President Gotabaya Rajapaksa, the Justice Ministry, with funding from the EU, along with the UNDP and the United Nations Children’s Fund (UNICEF) launched a high profile Justice Reform (JURE) programme. That project was finalized in Feb. 2022 and to be implemented over a period of four and half years, received EU funding to the tune of EUR 18 million (approx. LKR 4 billion) and the UN for EUR 1 million (approx. LKR 225 million). Would it help change Sri Lanka?
Devastating accusations directed by the Justice Minister last week at the all-powerful Constitutional Council over its failure to do its duty despite being legislatively armed to the teeth highlighted the crisis Sri Lanka is in. One cannot forget that the Bar Association, too, received substantial amounts of US funding over the years without any independent audits, but the overall situation remains the same. Let me stress again that the IMF prerequisites indicate that regardless of big anti-corruption talk, Sri Lanka remains in the grip of an utterly corrupt political party and bureaucratic systems. While we like to concede that politicos are now to some extent circumspect due to the glare of the local and international spotlight directed at them and the fear of a fresh Aragalaya targeting all of them, the less we say about the corrupt bureaucracy that works hand in glove with them the better. The MPs even if they are all corrupt to the core are limited to just 225 in number, but the unscrupulous bureaucracy ever ready to point the finger at politicos to cover their sins are far worse and found at every turn in places like the Inland Revenue, Customs, Excise, RMV, police, courts, local authorities, ports etc., etc., is insurmountable. So CC better get cracking before the people go berserk because of their unbearable suffering reaching breaking point.
And most of all we must watch out for foreign elements working in not so mysterious ways to exploit our weaknesses to their ends, especially after what happened since the Pangiriwatte riots of last year followed by much more vicious acts on May 09 and July 09 of that year and just as mysteriously melting away, thereafter, like a thief in the night. If someone says it was the spontaneous reactions of an enraged public, some of it may be. But such persons should go and “tell that to the marines”!
