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Cablegate: Sri Lanka: Gsl Weakens Corruption Oversight by Appointing

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RR RUEHLMC
DE RUEHLM #0753/01 2260855
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R 130855Z AUG 08
FM AMEMBASSY COLOMBO
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UNCLAS SECTION 01 OF 02 COLOMBO 000753

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E.O. 12958: N/A
TAGS: ECON EINV KCOR PGOV CE
SUBJECT: SRI LANKA: GSL WEAKENS CORRUPTION OVERSIGHT BY APPOINTING
MINISTERS TO HEAD PARLIAMENTARY OVERSIGHT COMMITTEES

REF: A) Colombo 730
B) 07 Colombo 1464
C) 07 Colombo 1232
D) 07 Colombo 779

1. (SBU) Summary: In a move that is likely to encourage further
government corruption, chairmanships of Sri Lanka's parliamentary
Public Accounts Committee (PAC) and the Committee on Public
Enterprises (COPE) were recently awarded to government ministers.
These committees have been traditionally chaired by opposition
parliamentarians to ensure accountability of government financial
matters. The appointments mark a further retreat in efforts to
reduce corruption. Paragraph 9 contains recommendations for the US
executive directors on the boards of the World Bank and IBRD to help
reduce corruption in Sri Lanka. End Summary.

-----------------------------
Government "Watching" Itself
-----------------------------

2. (U) On July 23, the Government used its Parliamentary majority
to elect two cabinet ministers to head parliament's most important
oversight committees, the Committee on Public Enterprises (COPE) and
the Committee on Public Accounts (PAC). Power and Energy Minister
W.D.J. Seneviratne was appointed to head the COPE and Media Minister
A.P. Yapa to head the PAC. These two committees were reconstituted
in June 2008 after the President pro-rogued Parliamentin May 2008,
which led to the automatic dissolution of all Parliamentary
committees. With the government's majority in parliament, it was
possible - and easy -- to install pro-government chairmen.

3. (SBU) These appointments, however, have been severely
criticized. The primary function of COPE and PAC is to exercise
supervision of public funds used by government ministries and public
enterprises. It is customary for opposition or independent
parliamentarians to chair the committees to ensure accountability in
government financial matters. Indeed, the previous COPE was led by
Parliamentarian Wijedasa Rajapaksa (no relation to the President),
who was named man of the year by a leading business magazine for his
efforts to expose corruption. Under his leadership, COPE presented
two damning reports that detailed corruption throughout the
government. Unfortunately, the government - although embarrassed --
took little action. Frustrated with government inaction, the
opposition did not even propose a candidate to chair COPE, and
opposition members serving in PAC walked out before the vote for its
chairman.

4. (SBU) The appointment of Seneviratne as COPE Chairman is a
conflict of interest. In its last report to Parliament in 2007, the
former COPE cited the Ceylon Electricity Board as one of the
institutions with most number of allegations of financial
irregularity. Seneviratne oversees the Ceylon Electricity Board
(CEB) as Minister of Power. Any investigation into corruption and
mismanagement of funds at CEB is therefore unlikely; as a result,
public confidence in COPE will further diminish.

5. (SBU) Likewise, Yapa's appointment to head PAC reflects a
conflict of interest. In a meeting on August 12 with Ambassador,
Wijedasa Rajapaksa criticized Yapa's appointment, noting that many
of the most corrupt state institutions are under his Ministry,
including the Independent Television Network, the Rupavahini
Corporation and Lakehouse, both of which oversee significant
television and print media empires.

-------------------------------------------
NGOs and Opposition Criticize Appointments
-------------------------------------------

6. (U) The Sri Lanka branch of Transparency International (TISL),
which advocated against the appointment of ministers, issued a
statement condemning the election of ministers to chair the
committees. TISL stated that it was an "intentional undemocratic
move to weaken legislative scrutiny so that the irregular financial
expenditure by the Executive would continue unabated." TISL urged
parliament to re-consider the decision and has called upon the two

COLOMBO 00000753 002 OF 002


Ministers to step down. To date neither has.

7. (U) General Secretary of the main opposition United National
Party (UNP), Tissa Attanayake, told news papers that the intention
of the government was to cripple the investigations of the two
committees. The UNP is threatening to boycott these committees.

---------------------------
Former Watchdog Pessimistic
---------------------------

8. (SBU) Ambassador asked former COPE Committee Chair Rajapaksa for
his views on the way forward in combating corruption in Sri Lanka
now that the COPE and PAC have been defanged. Rajapaksa gloomily
assessed that Parliament and its oversight committees "can't do
anything" because of the control exercised by the ruling party and
its allies. He predicted the SLFP will continue to block not only
new inquiries into corruption, but also action to prosecute those
named in previous COPE and PAC reports. For example, he noted with
regret that the Government had blocked his efforts to create a COPE
website to publicize its activities and reports and printed just one
copy of the COPE report to prevent any circulation. Rajapaksa said
the problem is compounded by the weakness of the opposition, which
has largely failed to pressure the Government to do more on
corruption.

-----------------------
What Should the USG Do?
-----------------------

9. (SBU): Embassy will continue to work with Transparency
International and other local groups to speak out about the
importance of the Government addressing corruption. We will also
continue to ensure that no AID or other USG money goes directly to
the Government where it might be diverted or misused. Beyond that,
we recommend that Washington agencies and the US executive directors
on the boards of the World Bank and IBRD:

- Pressure the IBRD and ADB to engage the Government on corruption
and ensure there are very strict auditing guidelines to ensure Bank
money is not mis-spent.

- Urge that the Government allow passage of the Right to Information
Law, modeled on India's successful legislation, to give citizens the
right to petition the central and local governments for details of
how money is being spent.

- Urge that the Government replace the Chairmen of the COPE and PAC
committees with independent Members of Parliament so that COPE and
PAC can be empowered to perform their mandated roles.

BLAKE

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