COPE: Dragnet set to catch sharks and sprats
By exposing corruption and large-scale misuse of State funds in state
corporations, he gave teeth to the COPE and made it a powerful
instrument of imposing financial discipline and propriety. Perhaps
Senior Minister for Human Resources D.E.W. Gunasekaraís political creed
would have inspired him to do a clean job of work leaving no room for
criticism or bias. The dragnet he lays catches both sharks and sprats.
The Minister in an interview with the Sunday Observer said since the
first Public Accounts Committee was established in the country in 1921,
this is the first time in the history of the legislature where all 235
public enterprises were scrutinised and examined by COPE.
The Minister said he was planning to submit the next COPE report
shortly. Issues are there, but many corrective measures have been taken.
As far as COPE is concerned, there are 235 state institutions assigned
to it. It has completed the investigations of the 235 institutions
within a span of 365 days. When the last COPE report was presented to
the Cabinet, President Mahinda Rajapaksa instructed the Ministers and
secretaries to accept its recommendations and implement them.
A number of those recommendations has already been implemented. Some
serious cases have been referred to the Bribery Commission and few
others to the CID to conduct further investigations. The next COPE
report to be submitted this year, would show a large number of state
institutions which were running at a loss, and since made profitable.
Excerpts of the interview:
Question: The COPE reports have unearthed serious
irregularities, misuse of state funds, especially corporation bosses
paying their income tax out of state funds. What corrective measures
have been adopted to prevent its repetition and has any action been
taken against them?
Answer: This appeared in my last report, not in the report
that I am going to present soon. We had discussions with the Treasury.
This had happened long ago, somewhere at the end of the 1990s. We found
that there had been collective agreements between the respective
managements and trade unions on this matter. In certain corporations,
even the Treasury had been in the norm of it.
Now there is a difficulty with regard to the collective agreement.
Until the term of the contract ends, they are unable to revise the whole
thing. That is understandable and we took that into account. Now the
Treasury has taken a firm decision to rectify these omissions and
What we have recommended was that the salaries could be increased but
you canít pay income tax on behalf of the employees by using Government
funds. That is our principled position. When they do such things the
profits of the corporations will drop. The report for 2000 which I have
submitted states that nearly Rs.2 billion of corporation funds have been
paid to the Inland Revenue Department for 2000. To that extent, all
those balance sheets have been revised.
Then the profits will further go down. The only thing is they have
agreed to make those corrections and they want to do away with it as
early as possible. They wanted time and we agreed. Altogether there are
28 institutions which include the Peopleís Bank, Bank of Ceylon, Central
Bank, National Savings Bank, Ceylon Petroleum Corporation (CPC) and the
Ceylon Electricity Board (CEB). Rs.2 billion is no joke. But the Inland
Revenue Department was satisfied because they got the money. The money
came from the corporate funds and not from the employees.
That is the irregularity. They were trying to justify it. But we
didnít accept it. There is a violation of the Inland Revenue Act. The
only purpose of an income tax is not to collect money to state coffers
and disburse it to society. That is one of the aims of imposing a tax.
But that concept has been completely negatived by this decision.
Redistribution of income is one of the principal concepts of taxation.
It has to be taken into account. Now they have accepted it and they will
correct it. We have to wait and see. In my next report, I shall see
whether there are any improvements.
Q:Despite the revelations by the Audit, COPE and PAC, the
incidence of misuse of state funds is on the increase. Donít you think
these bodies should be empowered to take punitive action against
A: We have taken a number of corrective measures. It is for
the first time in the history of the legislature that all public
enterprises were examined. As far as COPE is concerned there are 235
state institutions assigned to COPE. During the 365 days of the year, we
had completed 235 institutions. Since the first Public Accounts
Committee was established in the country in 1921, this is the first time
in the history where all the institutions were scrutinised and examined.
We are going to submit its report shortly. Issues are there, but a
number of corrective measures have been taken. When the last COPE report
was presented to the Cabinet, the President instructed Ministers and
Secretaries to accept its recommendations and implement them. At present
a number of those recommendations has already been implemented. We have
referred the worst cases to the Bribery Commission and a few others to
the CID for further investigation. We are calling for reports on the
progress they have made. In the next COPE report, we will include these
as well. When I present the next COPE report this year you could see a
large number of state institutions which were running at a loss made
profitable. At the time I presented my last COPE report, there were
certain institutions which had not produced their Annual Report for the
past ten years. Now every institution has submitted its Annual Report to
the Cabinet and the Parliament.
Q:What relief measures could be adopted to provide further
relief to electricity consumers?
A: That is a big question. I donít look at the CEB in
isolation. We will have to take into the account the general situation.
The CPC gave oil to the CEB. But the CPC has not received its dues. As a
result, the CPC is also in trouble. The CPC supplied oil to the CTB but
the CTB doesnít pay. The CTB is already in loss and they have defaulted
their payments to the CPC. The CPC also provides oil to SriLankan and
Mihin airlines. When they also donít pay, the entire burden has to be
borne by the CPC which is very unfair, since it is not subsidised. A
number of institutions are involved in this, not only the CEB. As far as
the CEB is concerned, there are other contributory factors too. At
present we are studying the working of the CEB. One question which has
been brought to our notice is that its accounting system is outdated and
we have to go for a new accounting system in keeping with international
standards. This is a Corporation which deals with production,
transmission and distribution of energy. Itís very difficult to find out
at which point these losses had been incurred. Some of the Cost
Accountants told me that we would have to shift the present financial
accountancy system to cost accountancy system.
When such a system is introduced it would be easier to vary. The
other point is that the policy of the Government is ďElectricity for
AllĒ. When we contribute to this policy, we must understand that even
the poorest man is to be supplied with electricity. We will have to take
into account the purchasing and spending capacity. I am inclined to
agree with the former Power and Energy Minister Champika Ranawakaís
We generate electricity from hydro power which incurs the least cost
of electricity. I am also inclined to accept the former Ministerís view,
that the least cost of electricity should be given to the poor people.
The next is coal power. Oil is the costliest input. This is a
complicated system. When all these are put into one basket, it would be
difficult to provide electricity to the lower segment of society.
Therefore, there should be a different system to provide electricity to
That is why we discussed it at the Cabinet and provided relief to
electricity consumers at the lowest level so that it covers nearly 50
percent of the population. It has also given little concession to the
next upper level. We have to look at this problem from various angles.
ďElectricity for allĒ means we also accept the fact that all people are
not equal. Their purchasing and spending capacity is varied. That means
we take the principled position that even the poorest man should enjoy
Then the question arises how could he afford? Then we have to
subsidise that. Today, electricity is not a luxury. It is available in
every nook and corner of the country. I believe the overall policy of
electricity has to be revised to afford concession to the needy. About
40 percent of electricity goes for airconditions. Why should that burden
be shared by other sections or the householders? So, it is a complicated
Q:Is there any justification to politicise the electricity
issue by resorting to a one day strike rather than further negotiating
with the authorities for relief?
A: Of course trade unions have a right to protest. We canít
deny their right to protest. If the consumer who is a worker finds he
canít afford it he has a right to protest. But politicising the issue is
another question and I donít agree with it.
Q:There is opposition from certain UPFA constituent parties
against the holding of the Northern Provincial Council Elections on
various grounds. The grant of political and land powers has also become
controversial. Your comments?
A: Holding of elections in the Northern Province is a long
delayed issue. I am one of the three members in the parliamentary group
who voted for the 13th amendment. It was brought forward to find a
solution to the problem of national minorities. Secondly, itís an
extension of democracy as well. That is why it has been extended to
other areas. Since 1988 all provinces except the North and the East,
enjoyed the benefits of the 13th amendment. For a moment I donít deny
that people in those provinces didnít benefit. When I was an MP for
Kalawana, at that time there were only foot-bridges in my electorate.
Today, I canít find a single foot-bridge in that electorate. All the
bridges have been constructed by the Provincial Council. From 1988 to
date, lots of development has been taken place in rural areas and people
have benefited very much.
Now the Central Government has extended its frontiers through the
infrastructure development of the whole island. But the people have
forgotten the fact that the Provincial Councils contributed so much. The
Northern and Eastern provinces where the national minorities are the
majority were denied development due to the war on terrorism. Now the
war on terror has come to end and four years have elapsed.
We should not delay any further and the people in the North should be
given the right as much as the people in the Southern or Western
provinces who have been enjoying it since 1988. Why should they be
denied the right? The other issues should be tackled separately. My
position is that the Northern Provincial Council Elections should be
held and whoever wins should be allowed to run it.
The President and the Central Government have all the powers. There
were occasions where Provincial Councils were dissolved. So, there is
nothing to fear. The Executive President is powerful. But there are some
imaginary fears. They have been caused by certain sections to delay the
process. It would be a grave injustice if the Northern people who have
been suffering for so many years are denied this right when all others
have enjoyed it for the past 25 years.Police powers and other issues
should be thrashed out separately. That is why President Rajapaksa has
suggested to appoint a Parliamentary Select Committee. We are prevailing
on the TNA. The UNP has issued a statement that they have decided to
attend the select committee. The TNA should also attend.
Then all political parties in Parliament can sit together and decide.
These are not issues which cannot be solved. I donít want Police powers
to be given to the North and the East, nor to the other Chief Ministers.
They will abuse it. It has been in the statute for 25 years. Until these
problems are sorted out, let it be in the statute.
Why should we drag it controversially. By doing so, we will be
inviting another war. We should not send a message to the national
minorities or to the international community that the Government is not
prepared to consider these things. It will only strengthen the hands of
the separatists. A collective effort should be made by all political
parties. It is not a matter that the Government alone can tackle. All
should get together and solve the national question once and for all.
History has shown that a Government or single party alone cannot solve
this problem. It is only through the collective strength and consensus
that a solution can be found for the problem of the minorities.
Q: How do you distinguish the no-confidence motion of the past
with what we witness today in Parliament? Do no-confidence motions
impact the Government or its sponsors to create a better image of
themselves in the public mind?
A: The Opposition has a right to present a no-confidence
motion. The Opposition through presenting a no-confidence motion expects
to give them an opportunity for debate on certain vital issues. As far
as the recent no-confidence motion against Foreign Employment Promotion
and Welfare Minister Dilan Perera is concerned I describe it as a
ďBahubuthaĒ resolution. It is very unfortunate and unjust because he was
not the Minister holding office at the time when the incident took
place. He was not the Minister at the time when Rizana was sent abroad
or when the alleged crime was committed. He didnít hold the present
ministerial portfolio when the death sentence was issued to Rizana.
After five years, Dilan Perera was appointed to the present ministerial
portfolio. He did everything possible to save the life of Rizana.
Knowing this, the Opposition moved the no-confidence motion against
Minister Dilan Perera. If the Opposition brought a no-confidence motion
against the Government, it would have provided an opportunity to debate
the whole policy of foreign employment and other issues. But the
no-confidence motion against Minister Dilan Perera is politically
Q:What do you think of the proposal to live telecast
Parliamentary proceedings? What will be its impact on the country and
A: It has positive as well as negative effects. Positive in
the sense that it provides an opportunity to the voters to watch
Parliamentary proceedings and view how their elected representatives
As regards the behaviour of certain MPs when they know that their
voters are watching, it might help to correct their behaviour. If they
continued to behave in such a manner, it will demean the dignity of
Parliamentarians and bring Parliament into disrepute. Then the people
would not like to see Parliamentary proceedings.
That would be a dangerous trend and lead to anarchy. When the people
lose faith in Parliament, elections and their own representatives, they
may try to look for other alternatives. But Speaker Chamal Rajapaksa
wanted to study how these things are being done in India, Canada and
various other countries. I believe we can come to some compromise by
taking into consideration the positive and negative effects.
Q:Many politicians, scholars, scientists and a sizeable
segment of the public attribute the current social, economic and
political ills to the 1978 constitution. How do you look at this
A:It is only one cause. Why did the then President J.R.
Jayewardene introduce the 1978 constitution? Mainly parochially I
believe he wanted the UNP to be in power for eternity. So he ruled for
17 years. The political and economic thinking behind J.R. Jayewardene
was, it was during 1978 that the Thatcher and Reagan philosophy was
coming into ascendancy. The Neoliberal economic theory was also gaining
ground. So he brought the 1978 constitution to accelerate economic
development based on a Neoliberal economic theory. That was his purpose.
When we look back neoliberalism has brought disastrous consequences
socially, economically and culturally. That is why people are talking
about cultural effects and the collapse of the family unit.
Q:Due to the rapid expansion of the market economy and its
extension to China and Cuba, and the collapse of the Soviet Union, the
re-emergence of socialism is uncertain. Your views?
A: After the October revolution, it ushered in a new era and
brought a large number of states into alternative economic models.
The Soviet Union collapsed in 1991. There are many factors that
contributed to it. One main factor is the closed economy. It came to a
point where two thirds of the world is on the market economy. In a
closed economy whatever you manufacture, you are unable to compete with
others. So that competitive advantages are there. There was a big
dialogue going on at that time in the Soviet Communist Party and other
Communist parties. In the context of the prevailing global economic
environment, we must go for a market economy plus a planned economy.
That is what China tried. That is why I consider that after Lenin,
the greatest political and socialist thinker was Deng Xio Peng. He
fought for it in his party and his theory prevailed later. It is adopted
by all others. Even in Cuba Fidel Castro accepted the Chinese model. At
present two thirds of the world has a market and capitalist economy.
When we reach a certain point, it is necessary to go with the market
economy for a speedy development and lift the people out of poverty.
That experiment has been proved correct.