Financial Times

US report highlights corrupt Lankan deals

By Natasha Gunaratne

Continued lending on the “scale of the IMF standby arrangement is irresponsible and continued silence by the World Bank on the issue of corruption in public sector ‘reforms’ in the country are indefensible”, according to a top US whistleblower.

This is according to a report released this week by the Government Accountability Project (GAP), a non-profit group based in Washington D.C., on corrupt privatizations in Sri Lanka, GAP, a 30 year-old non profit public interest group that promotes government and corporate accountability and is the leading whistleblower protection organisation in the United States, said there was a lack of sanctions on those responsible for such transactions.

A copy of the report was obtained by the Sunday Times FT. It delved in detail on the Lanka Marine Services (LMS) and Sri Lanka Insurance Corporation (SLIC) privatizations, and noted that if officials and businesspeople responsible for such transactions are not sanctioned in any way and can openly display their contempt for the distinction between public resources and private wealth, then it is safe to assume that these cases are only indicative of the true level of corruption and fraud among the elite in both the public and private sphere of Sri Lanka.

The GAP report further states that corrupt privatizations have not deterred the International Monetary Fund (IMF) from approving a 20 month standby arrangement worth US$2.6 billion for the government of Sri Lanka. It said that civil society organizations and the ethical public servants who brought the lawsuits that resulted in the Supreme Court decisions have advocated for transparency and accountability in government. The report says that in Sri Lanka however, it seems that only the issue of accountability is still relevant as the corruption itself is perfectly transparent.

Until very recently, the government’s actions stopped with the Supreme Court judgments in both post-privatization cases. The report states that the Supreme Court confined itself to sanctioning and reversing executive and administrative actions that came under its jurisdiction but it went no further. The attorneys representing the two complainants in the reversals demanded that the CID investigate and prosecute suspects in terms of the Penal Code and Public Property Act.

The report states that on July 3, 2009 Milinda Morogoda, the former Minister under whose jurisdiction the illicit transfers of LMS and the SLIC had occurred, was named Minister of Justice and Judicial Reforms in Sri Lanka, with authority over the Attorney General, who directs the CID to carry out criminal investigations.

The announcement of the appointment by the government caused a public outcry because it showed the extent of explicit and unabashed high-level corruption. For apparent criminal conduct there are no investigations and no penalties, the report said.

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