Mr Maithripala Sirisena
Hon’ Executive President of Republic of Sri Lanka
11th Oct 2016
Request to discharge the Constitutional duty to ensure proper functioning of
the Commission to Investigate Bribery or Corruption
This is a very important communiqué presented purely in the public interest drawing your prompt attention to your Constitutional Duty that requires you to perform the office of the Executive President as per Article 30 (1) of the Constitution, ensuring proper functioning of all the scheduled Commissions (enumerated under Chapter VIIA of the Constitution), which includes the Commission to Investigate Bribery or Corruption (CIABOC) under Article 33 (1) (c) the Constitution.
Fundamental duty of the CIABOC
2. Section 4(2) of the Act No. 19 of 1994 specifies the fundamental duty of the CIABOC as follows.
Upon receipt of a communication under subsection (1) the Commission, if it is satisfied that such communication is genuine and that the communication discloses material upon which an investigation ought to be conducted, shall conduct such investigation as may be necessary for the purpose of deciding upon all or any of the following matters:-
(a) prosecution or other suitable action under the provisions of the Bribery Act or the Declaration of Assets and Liabilities Law, No. 1 of 1975; or
(b) prosecution under any other law.
Government’s fiscal policy statement – Dec 2015
3. In its first fiscal policy statement (extract reproduced below) presented to the Parliament on 20th Nov 2015, the Finance Minister of the new regime, Mr Ravi Karunanayake, demonstrated its commitment to eradicate corruption. He went on to declare that the tax free car permit schemes adopted by the previous regime was open to abuse where the government had incurred heavy financial losses, hence proposed to abolish all tax free permits including the issuance of such permits to MPs.
‘… Honorable Speaker, the vehicle permit schemes have been politicized and misused and have created a huge revenue loss over Rs. 40 billion a year to the Government. I propose to abolish all the vehicle permits granted under different schemes, including to Parliamentarians. However, I ensure all government officers will be financially compensated for the benefit foregone. Further, all the vehicles purchased to the Government will be subject to all applicable taxes and necessary allocations will be provided in the Budget…’
President’s declaration to the World Anti-corruption Summit
4. Whilst attending at the World Anti-Corruption Summit in London on 12th May 2016, you made a thought-provoking pledge (reproduced below) accepting the responsibility to establish an administration free from all forms of corruption
‘… Corruption is one of the factors that promote political violence and other forms of human rights abuses. Sri Lanka went through such a stage during the previous administration. The people reacted strongly against corruption by changing the corrupt administration by the power of the ballet in January 2015 at the Presidential election and again at the Parliamentary election in the August 2016…’
‘… The people acting democratically got rid of the corrupt leaders and their supporters. The current national unity government consists of the two major political parties in the parliament under my leadership and the other led by Prime Minister Hon. Ranil Wickermesinghe. We were elected to office on the policy platform of democracy, good governance and rule of law. Therefore, we consider our prime duty to root out of corruption from the country. We have already taken significant measures for this purpose. I am happy to inform this forum that with the introduction of the 19th amendment to the constitution I handed over most of the executive powers to the Parliament except those powers Supreme Court decided cannot be transferred. However, even under this limited situation as a demonstration of my commitment to transparency, accountability and the rule of law and my firm determination to route out corruption I established an anti-corruption secretariat, a special presidential commission to investigate. I also appointed a commission to investigate allegations of bribery and corruption. The Right to Information Act has been presented to the Parliament and the National Audit Act will be presented to the Parliament shortly. All these institutions are working satisfactorily. A special division within the police titled Financial Crimes Investigation Division (FCID) was established to expedite investigations on major financial crimes. They have been given all necessary facilities to carry out their duties. They have already commenced flings of several major financial charges. We note with appreciation the support and cooperation already extended to Sri Lanka by several countries including UK, USA, India and Switzerland as well as the World Bank to strengthen the investigative agencies regarding the stolen assets. We are in the process of seeking information and assistance to trace them. We are happy that summit proposes to establish an International Anti-Corruption Centre, all of us as leaders need to act collectively to strengthen our own law enforcement agencies to track the corrupt and recover the proceeds of corruption…’
‘… Sri Lanka is fully committed to such firm action …’
Government abandons its own anti-corruption drive
5. As you are fully aware Mr Ranil Wickramasinghe’s main slogan at the General Election held in August last year was to eradicate corruption in the government business and to establish a government free of corruption that respects and honour sovereignty in the people of Sri Lanka, which includes the legislative, executive and judicial power.
The next big demonstration against corruption was the vicious attack made by Minister of Finance Mr Ravi Karunanayake on the corrupt policies of the previous Mahinda Rajapakse regime and promise to protect the government revenue by abandoning the tax-free car permit scheme altogether even to parliamentarians.
Thirdly, world media gave maximum publicity to your bold stand taken at the World Anti-corruption Summit to fight corruption. The international community as a whole valued the commitment of your government to make Sri Lanka a better place. Your statement especially was in line with the government fiscal policy enunciated in the Fiscal Management (Responsibility) Act No 3 of 2003 which reads as, ‘Directing Principles and State Policy of the government’ which state that the government shall formulate its Fiscal and Economic Policy, having regard to the financial impact of its decisions on future generations [section 3 (g) of the Act] enacted inter alia to ensure and facilitate public scrutiny of fiscal policy and performance of the government.
Gross betrayal of the mandate given by the people undermining the Public Trust
6. However, it is regrettable to observe that the government is going back on its own anti-corruption drive and toeing the same line adopted by the corrupt previous regime. One of the best examples is the Prime Minister’s request to the speaker asking for a ruling on a judgment of the Supreme Court (ref: page 192 of the Parliamentary Hansard dated 07th July 2016), manifestly usurping the people’s judicial power exercised by the judiciary established to protect vindicate and enforce the people’s sovereign rights (Article 105 of the Constitution. This is a clear violation of the sovereignty vested in the person, which includes legislative, executive and judicial power and also the doctrine of separation of powers, adherence of which is a must for the proper functioning of any representative democracy. Further, the corruption has once again become the order of the day at all levels of the government.
Re-issuance of tax free permits for MPs
7. It is now obvious that your government has lost its credibility by involving in one of the biggest financial crimes committed within a short period of time after being elected to office. It is a serious matter of ‘the Executive colluding with Legislature’ to defraud the government revenue in billions. When the two main organs of any democracy, the legislature and the Executive get involved in corrution in big scale, betraying the trust place in them by the people, there remains no hope for the people except turning to the other organ, the judiciary, seeking redress.
Beginning from Feb 2016, the government went against its own pledge of eradicating corruption with the re-introduction of the issuance of the tax-free car permits to all 225 MPs with no restriction imposed against disposal of vehicles imported under those permits.
Does the law permit imports tax-free and if so under what conditions?
8. The free car permits to MPs have been issued in the pubic interest under Section 3C of the Excise (Special Provisions) Act, No 08 of 1994. However, the law stipulates that any person intends to sell or dispose of any goods (including vehicles) imported tax-free shall obtain prior permission of the Director-General of Excise (in Sri Lanka tax charged on motor vehicles is called Excise duty) and to pay all levies exempted at the time of importation.
Parliamentarians (MPs) defrauding government revenue in collusion with the vehicle importers
9. It is observed that in the tax-free permit scheme introduced for MPs, the government has intentionally avoided the legal impediment, requiring the recipient of the permit to honour the purpose for which such permits have been issued. The government has done it deliberately permitting the corrupt MPs to sell their permits in the open market, thereby enabling them to share the revenue defrauded on the vehicles along with the vehicle importers.
Investigations have revealed that these permits are sold by MPs for not less than 25 million rupees in the open market, enabling the motor car dealers to import luxury vehicles absolutely tax free, by merely paying a data entry fee of Rs 1,750/- only to the Customs Department. It is also revealed that so far, over 66 diesel-driven Land Cruiser Jeeps (taxed at the rate of 300%, if not for the permit) have been imported on these permits defrauding the revenue of Rs 33,459,250.00 for each vehicle and the total revenue defrauded so far is running into over Rs 2,208,310,500.00 (ref: the communication addressed to Commissioner General of Motor Traffic dated 07th Oct 2016 to obtain registration details of these vehicles marked X1 attached hereto).
It has been further revealed that the buyers of these permits have applied for registration of these vehicles in their names and already a large number of vehicles have been registered, despite the fact that the buyers of such permits are not entitled to use this tax-free privilege at all (A list of vehicle already transferred in the name of the buyers by the Department of Motor vehicle marked X2 is attached hereto).
Formal complaint to CIABOC and its dismal failure to perform its public duty
10. Since this abuse of tax-free permits for unjust enrichment amounts to violation of the provisions of Section 70 of the Bribery Act, a formal complaint was made to the Director General CIABOC on 26th Aug 2016 in my capacity as a public interest litigation activist and lawyer. It was supported by credible evidence relating to importation, registration and simultaneous transfer of tax-free vehicles in the name of buyers of such permits who are not qualified to use this privilege.
On behalf of the people it was expected from the Director General of CIABOC to initiate a credible investigation into this abuse, in the same manner in which she had recently apprehended three Customs Officers who were involved in accepting a 125 million-rupee bribe, where the DG CIABOC had used treasury funds to make the detection. If a similar strategy had been adopted to buy MP car permits employing some decoys, the CIABOC could have easily nabbed at least a few corrupt MPs red handed and put a stop to this abuse and prevented colossal losses of government revenue running into several billions. However, the content of the media interview given by the Director General CIABOC on the complaint made against her to the Chairman of the Commission, reveals that she had perused the complaint furnished to her on the abuse of MP tax-free permits dated 26th Aug 2016, but failed to take corrective measures promptly and decisively to arrest this fraud of public funds by corrupt MPs which is of unimaginable magnitude.
It is pertinent to mention here when a similar abuse of tax free permits by MPs and Ministers was duly reported to the CIABOC on 11th Dec 2014, the same Director General CIABOC refused to initiate an investigation into it citing the following reasons notified in her communiqué dated 04th March 2015.
‘…The Conditions in the tax-free permits were decided as policy of the government. Therefore any loss caused to the government due to the implementation of such government policy will not fall within the scope of Section 70 of the Bribery Act. Accordingly, please note that the Commission will not take further action on your complaint.”
(ref: the communication by the Director General CIABOC dated 04th March 2015 marked X3 attached hereto).
Notice served on Department of Motor Traffic to refrain from transfer of the vehicles
11. In this background, as a public interest litigation activist and a lawyer, I was compelled to issue a notice on the Commissioner General of Motor Traffic that according to the law [Section 3C of the Excise (Special Provisions) Act, No 08 of 1994] the buyers of such permits are not entitled to use this tax-free facility without the payment of the relevant levies and therefore to decline registration of such vehicles in their names, until the proof of payment of relevant levies is produced with the registration/transfer papers presented to the Department of Motor Traffic, before effecting simultaneous registration and transfer.
Formal complaint made against the Director General CIABOC
12. The office of the Director General of CIABOC has been created with wide powers conferred in the office, purely to be used only in the public interest. However, the inaction of the incumbent Director General of the CIABOC to initiate a timely investigation on the complaint dated 26th Aug 2016 (refer paragraph 10 above) amounts to dismal failure on her part to realise the expectations of the people. It is apparent that she had abused the office to confer a benefit or favour to corrupt MPs, by not invoking the powers conferred in the office of the Director General presumably for IRRELEVANT CONSIDERATIONS, which amounts to a commission of an offence under Section 70 of the Bribery Act.
Therefore, in the public interest, the Director General’s improper conduct was formally reported to the Chairman of the Commission on 26th Sep 2016 with a request to;
a. order an immediate inquiry into improper conduct and abuse of office by Mrs Dilruskshi Dias Wirckaramasinghe, the Director General, for ignoring public duty conferred on the office purely on trust to be used for public good only, failure of which rendered her incapable of performing the office of the Director General of the CIABOC
b. initiate a credible investigation in terms of Section 4 of the Act No 19 of 1994, into the complaint dated 26th Aug 2016 made against the corrupt MPs for the abuse of their office for unjust enrichment.
In response to this complaint the Commission on 05th Oct 2016 formally acknowledged the receipt of the same. However, judging by its failure to initiate a credible and independent investigation into a similar complaint dated 11th Dec 2014, it is very unlikely that a proper remedial action would be taken on the part of the CIABOC restoring people’s trust and confidence on it.
(ref: the communicaque by the Acting Secretary of the CIABOC dated 04th March 2015 marked X4 attached hereto).
The Need to give effect to the UN Resolution (A/HRC/RES/30/1) of 01st Oct 2015
13. You will observe that the improper conduct of this nature would not have been the case had there been a proper accountability process in the government business, which has already come under scrutiny by the United Nations Human Rights Council, compelling the Government of Sri Lanka to concede that the people of Sri Lanka have no trust and confidence in the government business and persuading the government to co-sponsor the Resolution (A/HRC/RES/30/1) passed on 01st Oct 2015 in Geneva, Switzerland.
It is regretted to mention that the Government of Sri Lanka has been forced into this embarrassing situation and disrepute, due to the failures of this nature by those who hold high public offices at the expense of the general public.
Therefore, purely in the public interest and I request you to perform your office as the Head of the Executive, concerning this matter of grave public importance and to take speedy corrective measures to install a fit and proper person to the office of the Director General of CIABOC, ensuring proper functioning of the Commission to Investigate Bribery or Corruption which is your constitutional duty under Article 33 (1) (c) the Constitution, the failure of which would naturally result in the initiation of legal proceedings seeking redress from the Judiciary.
Public Interest Litigation Activist & Attorney-at-Law (Sri Lanka) Solicitor (UK)