SRI LANKA: CORRUPTION PANELISTS TELL AMBASSADOR POLITICAL

UNCLAS SECTION 01 OF 03 COLOMBO 000779

SIPDIS

SENSITIVE

SIPDIS

STATE FOR SCA/INS
TREASURY FOR LESLIE HULL
MCC FOR S GROFF, D TETER, D NASSIRY AND E BURKE
USAID FOR R HOWELL/ANE/IR, ELIZABETH HUME/CMM, BARBARA SMITH/DG

E.O 12958: N/A
TAGS: ECON EAID KCOR PGOV CE
SUBJECT: SRI LANKA: CORRUPTION PANELISTS TELL AMBASSADOR POLITICAL
WILL IS INADEQUATE



1. (SBU) Summary: At a recent roundtable hosted by Ambassador,
participants from government, civil society organizations, the
private sector, and the media described corruption as endemic at all
levels of Sri Lankan government, and also widespread in dealings
between business and government. Most felt a pervasive culture of
corruption in Sri Lanka, coupled with lack of public awareness of
the consequences of corruption, has led to corruption in all levels
of government. They agreed that anticorruption bodies lack the
financial or institutional strength to effectively address the
problem. Furthermore, multi-partisan support in Parliament must be
encouraged to institute measures that would make government more
transparent and more accountable. Passage of a Freedom of
Information Act, such as the one drafted by the United National
Front government in 2003 but never presented to Parliament, would be
a critical first step. End summary.

USAID CONVENES ANTI-CORRUPTION ACTIVISTS
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2. (SBU) Ambassador recently hosted a roundtable on corruption that
brought together a broad range of participants that included Justice
Ameer Ismail, the Chairperson of the Commission to Investigate
Allegations of Bribery or Corruption; Mr. S.C. Mayadunne, former
Auditor General of Sri Lanka; and Mr. J.C. Weliamuna, Director of
the Sri Lanka Chapter of Transparency International. Other
participants included academics, representatives of professional
associations and the private sector, retired public officials, and
civil society activists.


3. (SBU) USAID Sri Lanka's Office of Democracy and Governance
organized the roundtable. The participants are active in the
Consultative Council to Combat Corruption, a group that meets on a
monthly basis and is supported by USAID's anti corruption program.
The Council is working on developing a sustainable national strategy
to combat corruption and raise awareness on corruption in the
sectors and organizations they represent.

BACKGROUND: INSTITUTIONAL WEAKNESSES PERMIT CORRUPTION
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4. (SBU) Sri Lanka has taken a number of steps in the struggle
against corruption, including enacting legislation to criminalize
bribery and corruption; establishing a Commission to Investigate
Allegations of Bribery or Corruption; enacting legislation to
control money laundering; and signing the UN Convention Against
Corruption. But it is generally recognized that such actions, while
essential and laudatory, are only a first step. In many instances,
existing domestic legislation and the institutions tasked with
combating corruption have been ineffective in preventing the abuse
of power and corruption. The existing legal frameworks are flawed
and the institutions mandated to combat corruption suffer from a
lack of capacity and resources.

FACTORS BEHIND PERVASIVE CORRUPTION
--------------


5. (SBU) During the discussion, participants identified the
following factors as contributing to the pervasive culture of
corruption in Sri Lanka:

-- lack of public awareness of the causes and consequences of
corruption;
-- deep rooted culture of passivity and apathy of citizens;
-- ineffective implementation or disregard of existing laws;
-- lack of mechanisms to ensure accountability of government;
-- ineffective media coverage of the issue particularly of the
private sector; and
-- lack of political will.


6. (SBU) Participants described the political process as a
self-perpetuating cycle that gives politicians no incentive to
resist or fight corruption. They noted that the nature of campaign
finance in Sri Lanka results in politicians being indebted to their
financial donors in the private sector. The civil service also is
inherently corrupt, with many positions attractive entirely because
of the opportunities they offer for enrichment. "Every village
level administrator of the central government is corrupt," one

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participant charged.

STEPS REQUIRED TO ADDRESS CORRUPTION
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7. (SBU) The participants stated that the implementation of
institutional, legal and policy reforms requires political will both
within the Government of Sri Lanka (GSL) and across political
parties in Parliament. A clear commitment from political leaders
must be augmented by other initiatives, including:

-- Improving application of existing laws;

-- Strengthening the capacity of existing institutions that combat
corruption, specifically: the Commission to Investigate Allegations
of Bribery and Corruption, the Auditor General's Department, and the
National Procurement Authority;

-- Modifying recruitment policies to ensure adequate human resources
to support anti-corruption measures;

-- Parliament should provide an independent budgetary allocation to
the Commission to Investigate Allegations of Bribery and Corruption
and the Auditor General's Department to establish financial
independence for these institutions. Currently, both institutions
are dependent on the executive branch for financial resources;

-- Targeting the prevention of corruption as well as the
investigation, prosecution and punishment of corrupt officials;
and,

-- Raising public awareness, with particular emphasis on the private
sector, of the root causes and consequences of corruption.

RECOMMENDATIONS AND INITIATIVES
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8. (SBU) The following are some of the panelists' primary
recommendations and initiatives:

-- More effective enabling legislation for the Commission to
Investigate Allegations of Bribery and Corruption and the Auditor
General's Department should be passed.

-- Legislation is needed to protect whistleblowers.

-- The former Auditor General of Sri Lanka, Mr. S.C. Mayadunne, has
advocated for the Auditor General's Department publicizing all audit
reports of GSL institutions and state corporations, including
publishing them on the department's website.

-- Civil society organizations are campaigning for the Commission to
Investigate Allegations of Bribery or Corruption to prepare and
issue annual statistical and analytical reports on its activities.

-- Representatives from the private sector and civil society
organizations proposed that the private sector work with the GSL to
promote the use of information and communication technology to
increase transparency in government. The GSL's Information and
Communication Technology Authority, supported with funding from the
World Bank, has been promoting e-government as one method to address
corruption.

-- The United National Front government that was in power from
2002-2004 intended to enact a Freedom of Information Act (FOIA) and
the draft legislation has been prepared. The Sri Lanka Chapter of
Transparency International and other civil society organizations are
campaigning to persuade the Ministry of Justice to present the draft
FOIA to Parliament.

-- Transparency International/Sri Lanka and other civil society
organizations have called for the international donor community to
fund, provide technical support, and encourage the mobilization of
indigenous coalitions to combat corruption. Examples include:

o Transparency International/Sri Lanka has established a "Coalition
Against Corruption" - a forum for civil society groups to address

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problems of corruption;

o A group of civil servants has established the Clean Hands
program, a voluntary alliance of public officials who oppose
corruption in the government sector; and,

o Global Compact, an association of private companies, is following
a similar course in the private business sector.

USAID ANTI-CORRUPTION PROGRAM
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9. (SBU) USAID has funded a two year anti-corruption program, to be
completed in September 2007, under its Tsunami Reconstruction
Program. USAID provides training and technical assistance for the
staff from the Commission to Investigate Allegations of Bribery and
Corruption and the Auditor General's Department. Training programs
are developing staff capacity in such areas as information
technology; case management; forensic auditing; and written English.
Support is being provided to civil society organizations to
implement media campaigns and public awareness campaigns in
communities affected by the tsunami. The program has brought
together a cross section of representatives from professional
bodies, the private sector, journalists, academics and civil society
to prepare a national plan to combat corruption that will be
launched in July 2007. The final strategy report will be presented
to President Rajapakse at a national conference in July 2007.

COMMENT: AN OPEN MEETING TO AIR CORRUPTION ISSUES
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10. (SBU) The Ambassador observed during the roundtable discussion
that it appeared the persistence of corruption in Sri Lanka resulted
from "a systematic failure to act" on problems that were widely
recognized. He suggested that Parliament is key to countering
corruption, as the opposition party would always have an incentive
to hold the government accountable. The Ambassador added that
India's experience suggested that a Freedom of Information Act would
be a critical first step in strengthening the legal framework to
combat corruption in Sri Lanka.
The representative of Transparency International suggested holding a
high-level "open meeting" at which the President, donors, diplomats,
and anticorruption bodies discussed how to fight corruption. This
would give the government an opportunity, and an obligation, to say
publicly that it was against corruption. The Ambassador welcomed
this suggestion and said this should be discussed in July with
President Rajapakse.


11. (SBU) Another factor that helps focus attention on corruption is
the active role of the JVP party, which helped get President
Rajapakse elected and has strong political support in the
President's southern Sinhalese electoral base. The JVP has made
action on corruption one of its central planks. Its dogged
determination to curb corruption has wide populist appeal that is
likely to encourage the President and Parliament to act.

BLAKE