People need their country back, after the Bond Scam

A substantial institutional failure has occurred in the way the Sri Lankan State has not been able to institutionally react to the Bond Scam, the biggest ever bank heist, and the largest single act of corruption in the history of the country.

Copious accounts were written about the scam, in all types of media tracts, but none have dealt with the causes of this institutional failure, for the simple reason that though experts have recommended proper recourse, no one looked at the real fault lines that have led to the systemic breakdown.

There have been no serious political repercussions as a result of the scam, that very probably ballooned to the scale of the trillions of rupees over time.

The institutional failure should be laid at the door of three branches of the government, and of course the Fourth Estate, peopled by the watchdog media, that often averted its gaze and focused on irrelevancies.

One major cause of the institutional breakdown that led the scammers getting away and the scam being left to fester in the body politic, is that the Executive branch has given way to the judicial and legislative branches to fight such acts of grave corruption.

This has not worked. Various interest groups have in new ways influenced the legislative branch which first became ineffectual, before it lent its malign influence to the other counterpart bodies.


Excessive legislative intervention has weakened the Executive branch’s ability to go after grave financial crimes, and it’s worth remembering that the judicial power of the state is also constitutionally exercised through parliament.

State institutions should be independent, and independence primarily means that the anti-corruption bodies should be shielded from undue political interference. To this end, genuine political will to fight corruption is the key prerequisite. (OECD guidelines.)

There was, to look at the issue in this context, no independent appraisal of the Bond Scam, that was timely.

‘The Prime Minister’s claim that he has ushered in a new culture must be met with applause, nay with laughter. Here is a man who ridiculed the opposition when they raised the issue of the bond scams, joking about James Bond. Here is the man who appointed a committee of three stooges to clear the name of his friend who repeated the feat the next year too!’ wrote Dr. Upul Wijaywardhhana, in a national daily.

It took a long time before a special presidential Commission could be appointed to look into the issue with professional concern. The amateurs who were appointed by Wickremesinghe should be the subject of a special investigation that is sui generis, for their own connivance.

Wickremesinghe, to emphasize, had the gall to appoint a three member committee of totally unknown lawyers, party stooges all, to give a thumbs up for a scam that took place under his watch, from a scheme of things under his purview, if not under his immediate direction.

That’s institutional dysfunction at its nadir. Who were these people who it seems were handpicked for their absolutely pathetic knowledge of financial instruments, of the rarified order of sovereign bonds?

However, when the parliament was dissolved to conceal a COPE Report of the scam, it was clear that the Legislative oversight had come to nought.

A scam of this nature then, requires systemic change if it is to be addressed. Constitutional change, about which this polity has harboured a mania, is never able to address this type of egregious corruption. But, institutional change can.

A Legislature that abjectly was unable to address corruption of this magnitude, has to terminate, if it does not self destruct of its own volition.

But today, those who want an election in this country, are branded as anti democratic. This comes directly from the playbook of a Legislature — whose chief hallmark has been to conceal the Bond Scam, while attempting to perpetuate the life of that legislature so that the perpetrators of the scam remain free.

Instead of gerrymandering however, Sri Lanka’s Bond scammers used outright avoidance of elections to evade the fallout from the said scam, not to mention the wrath of the electorate perhaps, as in Malaysia, for a dozen reasons other than major financial scams.

The Bond Scam should be a watershed event that makes certain that systemic change is initiated instead of the knee jerk reaction of ‘throwing the bums out.’


A platform for any election that follows should include the request for a mandate for a recall election of parliamentary public officials.

Such recall polls provisions exist in most advanced polities, but more importantly, they are means by which patronage politics is eliminated.

When the level of corruption becomes obvious, such as in the case of the Bond Scam, there should be a special urgency to ‘kick out the bums.’ This should be triggered from among the media, and the oversight bodies.

But yet, the oversight bodies such as the Parliamentary Select Committees were treated with scorn. In any event the report of COPE, whether it is out there or not, is not sufficient to deal with a scam of the magnitude of the Bond Scam.

There are hardly any precedents in this regard, as Sri Lanka has never dealt with a scam of this magnitude.

The chief actor in the Bond Scam, the former Central Bank Governor Arjuna Mahendran, caused the increase in the country’s public debt by a staggering Rs. 285 billion through the depreciation of the currency as a result of his gross mismanagement of the economy. This plunged the country towards a serious debt trap where the country’s debt to GDP ratio which was at a reasonable 70.7% as at end 2014, galloped to a massive 76.0% by the end of 2015, as independent reports indicated.

There are no real oversight bodies in the country, that ensure this kind of gross economic mismanagement does not take place.

There is no alternative, but to agitate to hold the culprits to account by making them face as soon as possible, the Court of public opinion, by means of a public vote at a general election.

In Malaysia, the redrawing of electoral boundaries on racial lines, was one strategy that was used by the incumbent premier to ensure than he wins a further term, despite the scope of the I MDB scandal.

However, indignant segments of the population such as Malaysian youth, rebelled.

It’s pertinent, that penny for penny, or rupee for ringgit, the Malaysian scandal matches up to the Sri Lankan Bond Scam.

However, the Bond Scam’s first victims are the ordinary people of Sri Lanka, and that couldn’t be said in the same way about the 1MDB Scandal, as it did not involve the EPF or its equivalent for instance, which formed part of the target area of the Bond Scam. The Malaysian scandal also did not have a direct impact on the depreciation of the country’s currency, the ringgit.


That there is no party consensus outside the SLPP-UPFA combine, that Ranil Wickremesinghe or his immediate coterie of advisors should have nothing to do with running a country after presiding over a scam of this nature, is an indication that the multiparty system of governance in Sri Lanka is an abject failure.

Partisan politics has trumped civility, and accountability has gone by the board. That is primarily a sign of systemic failure.

Institutions have been infiltrated to ensure partisan interests of the few. A lack of democratic accountability within the institutional structure of the UNP has resulted in systemic dysfunction, that has made a nonsense of leadership accountability.

If the party insiders cannot hold Ranil Wickremesinghe accountable to the party rank and file over issues such as the Bond Scam, it means that the UNP is nothing more than a lobby group for special interests.

Much of the loot from the Bond Scam went towards enriching the UNP party coffers however, and this seems to be an open secret.

That opens an entirely different can of worms. There are no campaign finance laws worth talking about, in this country.

This is why MPs have had the audacity to say that the Bond Scam mastermind gave their campaign organisations funds, as opposed to giving them funds directly.


Institutional dysfunction has percolated other branches of government in a manner that has to be looked into discreetly, but no doubt with reference to all bearings and ramifications of such failure.

Why have Commissions of Inquiry on the Bond Scam etc., not been able to enforce deterrent punishment, though they have been able to expose some, though not all, of the crimes involved in the Bond Scam?

That too could tell a layered story of how our system is structured.

There is no fundamental agreement between the key actors that decide and execute policy, that economic crimes falling within the wide description of corruption and graft are the gravest of all crimes that can be committed against the people. This is not systemic failure, its alarming systemic stasis.

The largest financial fraud in the history of the country, should be the watershed moment for a complete overhaul of the system including of course the odious provisions of the 19th Amendment which can be seen, in the rear view mirror, as the primary legislative device by which the Bond scammers plotted to ensure they rig the system just right, so that they could get away with the loot.


Even the Amendments’ provisions on the Right to Information were tampered with so that high crimes of the nature of the Bond Scam have a lesser chance of being a detected, even through legal recourse to RTI enactments.

This and the way that the constitutional council was manipulated together of course with the so called Fixed Term Parliament Clause in the Amendment, shows there was intent to game the system in a methodical and deliberate way.

It has succeeded unto now, but the people by their own collective determination to ‘send the bums home’, should make sure that the game is up, ending this ignominious state of affairs. The addressing of systemic failure would be possible after that.

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