Cablegate: Corruption Worsening in Sri Lanka

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DE RUEHLM #2119/01 3560639
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R 220639Z DEC 06
FM AMEMBASSY COLOMBO
TO RUEHC/SECSTATE WASHDC 5006
INFO RUCPDOC/USDOC WASHDC
RUEHNE/AMEMBASSY NEW DELHI 0406
RUEHKA/AMEMBASSY DHAKA 9726
RUEHIL/AMEMBASSY ISLAMABAD 6662
RUEHKT/AMEMBASSY KATHMANDU 4722
RUEHKP/AMCONSUL KARACHI 2087
RUEHCG/AMCONSUL CHENNAI 7226
RUEHGV/USMISSION GENEVA 1634
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RUEATRS/DEPT OF TREASURY WASHDC
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UNCLAS SECTION 01 OF 02 COLOMBO 002119

SIPDIS

SIPDIS

DOL/ILAB FOR TINA MCCARTER

DRL/IL FOR LAUREN HOLT

STATE FOR SCA/INS

MCC FOR S GROFF, D NASSIRY AND E BURKE

GENEVA PASS USTR

E.O 12958: N/A
TAGS: ECON PHUM SOCI EAID CE
SUBJECT: CORRUPTION WORSENING IN SRI LANKA

1. Summary: On December 9th 2006, the Sri Lanka Chapter of
Transparency International organized the National Integrity Awards
to commemorate United Nations International Anti Corruption Day.
Justice Ameer Ismail, Chairman of the Sri Lanka Commission to
Investigate Allegations of Bribery or Corruption and Ambassador
Robert O. Blake were among the guests. Three members of the Sri
Lanka administrative service were honored for their courage in
bringing various aspects of government fraud and corruption to
light. Chief Guest Anura Roy of India and later the Ambassador
urged Sri Lanka to enact a Freedom of Information Act to ensure
transparency and accountability of government. World Bank and
Transparency International indices confirm popular perceptions that
the scope of corruption is increasing. A recent USAID assessment
found that the percent of a public sector contract paid in bribes
has nearly tripled. President Rajapakse has pledged his full
backing to investigations of all corruption. End Summary

Importance of Freedom of Information
------------------------------------

2. The Sri Lanka Chapter of Transparency International commemorated
United Nations International Anti Corruption Day on Saturday,
December 9th 2006. Ambassador Robert O. Blake was the guest of honor
and the event was co-sponsored by the United States Agency for
International Development's Anti Corruption Program which is
supported with tsunami supplemental funding.

3. The Executive Director of Transparency International, Mr. J.C.
Welimuna, said in his introductory remarks, that: "abuse of power
for personal gain - in other words corruption - has been one of the
major causes in the failure of the Sri Lanka State...". He commented
that all branches of government, the private sector and civil
society have failed to show sufficient commitment to address
corruption in their respective sectors. Weliamuna lamented that "A
culture of secrecy has invaded our lives." The escalating conflict
in Sri Lanka and government's imposition of more far reaching
Emergency Regulations to address the security threat have resulted
in a more restrictive operating environment for the independent
media.

4. The keynote speaker at the event was Ms. Aruna Roy, a leader of
the civil society campaign in India that successfully campaigned for
the enactment of a Freedom of Information Act in India. Ms. Roy
spoke of the importance of such legislation to ensure transparency
and accountability of government to the citizens and urged that Sri
Lanka enact its own such law. Note: In 2003, the United National
Front (UNF) government, led by then-Prime Minister Ranil
Wickremesinghe, approved the drafting of a Freedom of Information
Bill, but with the fall of the UNF government in April 2004, the
bill was never tabled before Parliament.

5. Ambassador Blake told the audience Sri Lanka needs effective laws
and procedures to combat corruption. He cited the example of India
where the Freedom of Information Act provides the necessary
legislative framework to encourage integrity and accountability in
government. He encouraged the Government of Sri Lanka to pass its
own Right to Information Law. He also reviewed the steps the USG
has taken to ensure integrity in government, such as the creation of
Inspectors General that report to Congress, and the requirement that
all senior officials file annual financial disclosure forms.

Three Courageous Civil Servants
-------------------------------

6. Transparency International awarded three GSL officials for their
efforts to root out corruption in government. The first runner-up,
a woman, was recognized for her courage in reporting sexual
harassment by her supervisor and helping to make sexual harassment a
crime under GSL regulations governing the conduct of official
employees. The other runner-up was an auditor in the Ministry of
Irrigation who took the initiative to inspect irrigation projects

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around the country, thereby discovering widespread misuse and
diversion of Ministry funds. The winner, the Auditor General of Sri
Lanka, was recognized for his six years of work as Auditor General
during which he uncovered tens of billions of rupees in corruption
in the tax and other systems, and also brought the Auditor General's
office up to international standards.

Comment on Worsening Corruption in Sri Lanka
--------------------------------------------

7. The award ceremony was timely. There is a universal consensus
that corruption is increasing in Sri Lanka. Both the Transparency
International Corruption Perception and the World Bank's Control of
Corruption indices for Sri Lanka show a decline in recent years. The
World Bank Control of Corruption Index has shown a decline from
-0.17 in 2004 to -0.31 in 2005. Transparency International's
Corruption Perception Index shows a decline from 67th place in 2004
to 84th in the 2006 ranking. During the recent USAID Democracy and
Governance assessment, anecdotal evidence from the private sector
indicated that the percent of a public sector contract paid in
bribes has nearly tripled.

8. Several government entities do try to address corruption, the
most important being: the Commission to Investigate Allegations of
Bribery or Corruption, the Auditor General's Department and the
National Procurement Agency. However, there is a confusion of
mandates and these institutions frequently interpret their mandates
narrowly, inhibiting their effectiveness.

9. Mr. Wijedasa Rajapakse, a Memember of Parliament and Chairman of
the Parliamentary Committee on Public Enterprises told the media
alleging that state owned enterprises are "highly corrupt" and the
loss incurred by these corporations is at least one hundred billion
Sri Lanka Rupees (United States $ 100 million). Mr. Nimal Perera,
Deputy Auditor General of Sri Lanka, commented that these figures
have not been confirmed by an audit. But there is no question
corruption is widespread. To his credit, President Rajapakse has
pledged his full backing to investigations of all corruption.

BLAKE

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