The Pandora Papers smokescreen

President Gotabaya Rajapakse’s directive to the Director General of the Commission toInvestigate Allegations of Bribery or Corruption to probe the alleged involvement of businessman Thirukumar Nadesan and his wife,former deputy minister Nirupama Rajapakse, in the Pandora Papers expose has been met with mixed reactions.  On the one hand there is scepticism that this is the customary drill beforethe whitewash. These are justifiable reservations to have, given the precedents with zero results on accountability and transparency. Fueling these sentiments were the responses of Minister of Youth and Sports Namal Rajapakse and Minister of Finance Basil Rajapakse, both ofwhom are close relatives of NirupamaRajapakse.  Namal Rajapakse distanced himself and his government, the ruling Sri Lanka Podujana Peramuna, saying it was the government of the late President Ranasinghe Premadasa and the presidency of Chandrika Bandaranaike Kumaratunge which were in place when the Nadesan-Rajapakse duo are alleged to have carried out their questionable dealingsbetween 1990 and 1998.  Basil Rajapakse’s convenient scapegoat was the diaspora who he said was responsible for dragging the Rajapakses into the scandal. When judgement has already been passed, any outcome will be of no consequence. The other end of the spectrum of opinion however has welcomed the president’s directive amidst a remaining sliver of hope that justice will be done to this investigation at least. An independent and impartial inquiry will go more than the extra mile to restore the peoples’ confidence in the government which is now at rock bottom. The president’s directive must also be a genuine one and not one which is made on the instruction of Nadesan. Soon after the scandal broke, Nadesan wrote to the presidentproclaiming his innocence and that of his wife and asked for an independent inquiry‘preferably by a retired appellate court judge’.  He just about stopped short of naming the judge. Nadesan is only another citizen of this country and asking the president for an inquiryis not his prerogative. The law must take its course.

President Rajapakse’s pledge followed that of Pakistan Prime Minister Imran Khan who said his government will investigate citizens linked to the leak and take action if any wrongdoing was established. Khan has been on an anti -corruption crusade since he took office in 2018. A little over a year ago he told a high level panel on Financial Accountability, Transparency and Integrity (FACTI) during the 2020 United Nations General Assembly sessions that the international community must take steps to counter illicit flows of money.

Posting on his Facebook page following the Pandora expose, the Pakistan prime minister said ‘we welcome the Pandora Papers exposing the ill-gotten wealth of elites, accumulated through tax evasion and corruption and laundered out to financial "havens". The UN Secretary-General's Panel FACTI calculated a staggering $7 trillion in stolen assets parked in largely offshore tax havens.’

He went on to write that countries are not poor but corruption causes poverty because money is diverted from being invested in the people. The resource-theft causes devaluation, leading to thousands of poverty-related deaths.

‘Just like the East India Company plundered the wealth of India, ruling elites of the developing world are doing the same. Unfortunately, the rich states are neither interested in preventing this large-scale plunder nor in repatriating this looted money. If unchecked, inequalities between rich and poor states will increase as poverty rises in the latter. This in turn will lead to a flood of economic migration from the poor to the rich states, causing further economic and social instability across the globe. I call on the international community to treat this grave injustice as similar to the climate change crisis.’

  The Pandora Papers is the largest investigation in the history of journalism.  More than 600 journalists from 150 media outlets in 117 countries collaborated for more than a year deciphering 12 million files about hidden wealth, tax avoidance and money launderingwhich had been leaked to the US based International Consortium of Investigative Journalists (ICIJ). According to the ICIJ, the files revolved around ‘confidential records of 14 offshore service providers that give professional services to wealthy individuals and corporationsseeking to incorporate shell companies, trusts, foundations and other entities in low or no tax jurisdictions. The entities enable owners to conceal their identities from the public and sometimes from regulators. Often the providers help them open bank accounts in countries with light financial regulation’. Nadesan and Rajapakse are among more than 330 others from over 200 countries and territories whose names were revealed in the Pandora Papers. They include heads of state, politicians, celebrities, military generals, fraudsters, drug dealers, judges and leaders of religious groups. Nirupama Rajapakse’s late father was the cousin of President Gotabaya Rajapaksa, Prime Minister Mahinda Rajapakse, Finance Minister Basil Rajapakse and Minister of Irrigation and State Minister of Internal Security and Disaster Management ChamalRajapakse. A letter dated 13 September from the ICIJ addressed to Nadesan and Rajapakse appear to have gone unanswered by them by the deadline of 20 September.  In it, the ICIJ ask the pair to answer a series of questions about their alleged control of an offshore company Rosetti, which was used to receive consultancy fees and to buy properties in London and Sydney and their role in several other off - shore companies and trusts including one which holds a 51 million art collection. Among the questions are Nadesan’salleged application for Cypriot citizenship and his relationship to Basil, Mahinda and Gotabaya Rajapakse as well as his role as a proxy for Basil Rajapakse to purchase a property in Malvana.  The ICIJ has also asked Rajapakse to clarify if she declared her interests in the shell companies and properties to parliament. The Pandora Papers dealings permeated through to domestic politics. In parliament last week JVP leader Anura Kumara Dissanayake revealed how in the days running up to the presidential election in 2015, Nadesan had paid 4012 million rupees into the account of China CAMC Engineering Company Limited (CAMCE), the contractors in the Gin-Nilwala river diversion project. A special audit on the Gin-Nilwalaproject found that when the government in 2009 signed the Memorandum of Agreement with CAMCE, there had been no expressions of interest from other companies, nor an explanation why the contract had been awarded to CAMCE.  The payments to it by Nadesan had been made in three instalments of 1000 million rupees on 24. 12 2014, 2009 million rupees on 01.01. 2015 and 1003 million rupees on 06. 01. 2015.  Dissanayake went on to explain how after the credits were made to the CAMCE account it had credited the Hong Kong account of Red Ruth Investment Ltd, a shell company allegedly owned by Nadesan, with $5. 9 million dollars. Mahinda Rajapakse who was one of the presidential candidates at the election on 8thJanuary 2015, lost to Maithripala Sirisena. Dissanayake also revealed how money was transferred between a network of local and foreign bank accounts belonging to Nadesan and the involvement of CAMCE in the purchase of the 17 acre land in Malvana. The Financial Crimes Investigation Division which was set up in February 2015 to investigate large scale corruption subsequently filed action against Nadesan, Basil Rajapakse and another individual, Muditha Jayakody who had also been involved in the purchase of the land, under the Money Laundering Act. The PugodaMagistrates Court ordered the land, of which Basil Rajapakse denied ownership, to be publicly auctioned.  A Commission of Inquiry on Alleged Political Victimisation which was appointed by President Gotabaya effectively reversed the decisions of the court.  It recommended that action is taken against the police officers and a complainant who had filed the original charges and complaint. Meanwhile, media reports said that NirupamaRajapakse has left the country before the start of the Bribery Commission investigation. She is reportedly in London, where her children reside. The report of the Bribery Commission is expected in one month.