CASH FOR INFLUENCE

The revelations made by the New York Times of a payment allegedly made to President Mahinda Rajapaksa days ahead of the Presidential poll in January 2015 has brought into sharp focus the real need for robust laws governing electoral funding in Sri Lanka. It is not often that a respected newspaper makes detailed claims openly as the NYT copy. Indeed at first glance the story does appear detailed – until one looks at it analytically. However claim is made that a Chinese state business enterprise made various withdrawals of significant sums and that those sums were given as gifts or donations to unnamed persons supposedly within the Rajapaksa camp. The veracity of the claim made by the much respected newspaper will no doubt be checked by the authorities in Sri Lanka – in an attempt to check if any rules and regulations have been broken. In Sri Lanka it is common practice for politicians to receive donations from mainly anonymous sources ahead of elections and sometimes after polls when invoices from a variety of suppliers arrive at party and candidate offices. Identifiable electoral donations – called ‘support’ – in Sri Lanka are few and far between. The sums though can be astronomical if we are to believe some of the claims that sometimes are made openly. Not long ago an obviously successful businessman with a fairly wide repertoire of businesses that includes hotels, property, trading and investments in capital markets made the claim that he was taken to see the leader of a mainstream party, the UNP, by a senior member of the party. He maintains he has copies of cheques that had been encashed – totaling USD 200,000 at the time he made the donations. Although he openly stated that he will make it available to the media and other interested parties, the exposition has not been made yet. More frequently media in Sri Lanka have from time to time, calculated that vast sums of monies are expended on electoral campaigns that run into millions of rupees. Says a former provincial council legislator, “a basic low-level campaign for a parliamentary poll can set you back at least Rs 10 million - then USD 75.000 although you are more likely to need double that depending on the size of the constituency” Supporters of the Rajapaksa political machinery brush off the recent publication as being devoid of fact and almost in the same breadth declare that even if it was in reality given to the Rajapaksa’s no laws have been breached. The flip side is of course that a number of issues may well be present. As for embarrassment factor, the number of complaints and allegations levelled against the former President and his family, friends and colleagues, would suggest that they have collectively gotten immune to the negativity and any embarrassment. Instead they appear to revel in the notoriety of the claims. After all not long after the loss of seat (if not face) the now Finance Minister startlingly claimed that the Rajapaksa’s had collected approximately USD 18 Billion in overseas accounts. Examination of the country’s finances would suggest that the economic data published by the Central Bank after he left office, would not support that claim. The Sri Lanka economy was worth around USD 50 Billion on average during the Rajapaksa tenure and public spend was never more than 6%. In the light of these claims analysts point out that it would have been impossible for the Rajapaksa’s to amass USD 18 billion from an economy the size of Sri Lanka’s. The more serious question that arises is of course the virtually non-existent rules governing electoral funding. It becomes far more potent if one gives credence to the claim that the funding is from another sovereign state, funding the one individual who at the time was the incumbent Executive President of the country. China and its Belt and Road initiative (BRI) has attracted plenty of concern – always brushed aside by the Chinese – especially when nations along the BRI route map complain of choking debt programs they find themselves in – usually after living with the debt for a few years, typically three years. Almost always the developing country ends up handing over sovereign land in exchange for the inability to pay the colossal accumulated debt. That in turn sets off a series of events including of course political instability with opposition members gleefully pointing out the drawbacks of having accepted huge loans from a Super Power and having to repay loans with lengthy leases. With Sri Lanka being engulfed by rampant sleaze, graft and accountability issues, there are growing calls that legislators take a hardline stance with a commitment to addressing the issues. Unsurprisingly Sri Lanka does not find itself full of politicians who are focused on tightening the accountability and transparency screws. The so-called ‘bondgate’ scam involving the country’s Central Bank which saw the country incur huge losses running into billions of rupees, has led to some evidence that much more than a handful of politicians and their associates received an aggregate total of at least USD 8.4 Million – over Rs 1.3 billion. Considering that the initial 30-year bond was advertised to raise just Rs 1 billion, the alleged slush fund of USD 8.4 Billion helps place the bondgate scam into some context. Adding to that context is the published figures of the profits made by a company whose owners and members of their family share friendships of a long standing nature with the country’s Prime Minister and other politicians. Perpetual Treasuries Limited, a licensed primary dealership, posted profits of over Rs 12 Billion in three accounting periods – USD 88 Million. The profits contrast sharply for the limited industry of primary dealers where no other dealer had ever made in excess of Rs 1 Billion in any one accounting period. And the majority of them had been in business for much longer than the new boy on the block – Perpetual. In a country where the Prime Minister used the sanctity of parliament to expose names of businessmen whom he claimed were in some way ‘suspect’ of various acts of corruption and despite his pronouncement that they would be investigated and presumably brought to book, nothing very much has been done, the chances of introducing stringent laws to control and make electoral funding Transparent and accountable, remain extremely slim.