Corruption leads to greater poverty - Nihal

Wednesday, 18 February 2015 00:00 - - {{hitsCtrl.values.hits}}

Good governance activist and public interest litigant Nihal Sri Ameresekerewas recently interviewed by Government Accountability Project (GAP)Executive Director, Bea Edwards about corruption in privatisation programs in Sri Lankathrough which valuable State assets were sold to private investors. Using public interest litigation, Ameresekere presented to the Supreme Court of Sri Lanka the fraudulent arrangements various Government officials allowed as they passed public resources into private hands. Over time, Ameresekere was able to convince the Court to annul many of these corrupt agreements. Ameresekere was a high level Government official for many years. He was also a private sector consultant on World Bank and USAID funded projects in Sri Lanka. He became aware of the cohesive corruption in Government and private sector arrangements and he became a witness to these acts of illegality fraud and corruption and ultimately a whistle-blower in the last 10 years. In the interview Edwards noted what happened with the Government of Sri Lanka and the problem of corruption is that private citizens and small groups of people with connections to the Government and to international aid agencies appropriated large amounts of public wealth for their own benefit and this was a serious problem in Sri Lanka because the country was affected by a long-term brutal violence civil war that destroyed lives and homes of many people, who in the aftermath of the war needed support from the Government to re-establish economically and socially. They were unable to secure that support because people well-connected to the Government or working in Government had themselves depleted the National Treasury. And as a result, people who suffered from war and displacement now suffer from poverty and deprivation. Following are excerpts of the interview:

Nihal Sri Ameresekere (right) and GAP’s Executive Director Bea Edwards Q: Nihal, I wanted to ask you first little bit about your background and what your credentials are in your professional background that put you in position to come aware of what was happening? A: First let me thank you for having me this morning and for this opportunity. Also I would like to add on to the statement you said, the greed by a few exploiting and robbing the resources of the people overcomesthe needs of the many, resulting in abject poverty, and then there comes in aid agencies with so-called poverty reduction programs. Q: When did you first realise in your professional career that there was a wide-spread corruption and fraud at high levels of Government? A: Actually, it was a personal experience of mine, on the infamous Hilton fraud. Because of the litigation I brought in, the Government saved $ 207 million in 199

5 from paying Japanese companies Mitsui Co.Ltd and Taisei Corporation. Auditors were Ford Rhodes Thornton and Company. I complained about the fraud to the Securities and Exchange Commission and to the Attorney General, who took no action, resulting in me filing the first derivative action law in Sri Lanka and succeeding and winning and getting the write-off from the Japanese. Q: You have published 13 books about specific transactions in the industrial sector that were affected by corruption and fraud. These are remarkable compilation of documents and analysis setting out how these transactions took place. Can you explain a little about the process of privatisation of the facilities of the Port of Colombo and how that process was affected by fraud? A: First and foremost, I have not made any allegations. As you know I›ve documented a series of 13 booksto document my experience in combating fraud and corruption. Very voluminous books, in detail and those books detail real case studies. I›ve not expressed opinions, I›ve not made allegations, but set out the facts in correct perspective as to what happened. So it›s an exposure of all the cases I›ve done. In all these cases I›ve started on a concept of public interest litigation in Sri Lanka and we were successful at the highest level of Judiciary in Sri Lanka by the Supreme Court. I was amazed when I advisor of the Ministry of Finance I had to attend with the IMF officials one day at the Central Bank and they had a list of projects and deadlines for privatisation. So, I realised that these are all reforms being pressurised or laid or dictated to by international donor agencies. And I said: ‘No, things cannot be done so fast.’ In doing so, there›s enough room for manipulators to manipulate and take on large State assets at unbelievable prices. Q: I read the book about the privatisation of the bunkering facilities of the Port of Colombo. Apparently an industry and a facility that functioned quite well and provided sustainable resources to the Government of Sri Lanka and providing services shipping traffic through the region was given over to a private company, which then appropriated the revenues that resulted rather than giving those revenues to the State of Sri Lanka. Is that what happened? A: Yes, that is only one part of it. The facilities in the port could have never be privatised as they are essential factors for the port. Our law does not permit any part of the port. So, against the basic norms of law, people have acted, the governments have acted and in all these privatisations, private sector is not going after some loss making asset or operation. They are after most profitable assets and privatisation deals are manipulatively done. And this whole word of privatisation becomes stinking. Most of the private sector organisations if not all will eye the most profitable State ventures and manipulatively or otherwise try to take them over for greed or profit or growth. Q: You said earlier that you pioneered the Public Interest Litigation in Sri Lanka. Now here in the US when we work with the whistle blowers and we try to combat fraud or corruption in business, in Government very important aspect of what we do depends on an independent judicial system and a free press. Do you feel that you had access to an independent court system in Sri Lanka and a free press or was there a problem in getting your message to the public? A: Two questions, one is about the Judiciary. At the time I fought the Hilton case I must say that the Judiciary was impeccably independent. I had a leading President›s Counsel, adviser to the then President of Sri Lanka, as a defendant, but still I won. I›m sorry to say, not only me but many of my colleagues who are lawyers complain that the judicial independence has been eroded. I would say that this has happened mainly because the Opposition in Sri Lanka is weak. There›s an absence of political opposition to hold the Government in check and balance. In media, I think all over the world media is not an angel, as it were. Media also can have its own agenda. Q: Could I just ask you in general, since you have been a witness, what have you learnt about the way the political system operates and what could be done perhaps to address the worst problems you have seen? A: Even though people may be soft, passive and silent, it doesn›t necessarily mean that they endorse the system of endemic corruption. Greed by a few plundering the resources of the people affects the needs of the poor, resulting in their disillusionment, subversion and ultimately leads to social injustice and perhaps justifiable rebellion. The more I got involved in it, the more committed I became. The more oppression, obstruction and pressure I was subjected to, the more courageous I became. I›ve gone on record to say when somebody asks ‘aren›t you risking your life?’ I have told them ‘Life is not a risk. You are born on one day and die another day and that cannot be changed and you›ve lived your life the way you want until that time (death) comes.’