The need for regulating election financing

Perpetual Treasuries (PT) allegedly pulled off probably the largest ever financial scam in the country. But, now it is becoming increasingly clear, that the disgraced bond trader did not just scam billions of rupees out of public coffers, but it had also engaged in a well calibrated effort of state capture.   

 Various sources have alleged the existence of a list containing 118 names of politicians who had received funds from the PT and its subsidiary W. M. Mendis Company through which political contributions have reportedly been distributed. Allegations came to light after Dayasiri Jayasekara MP admitted that he received Rs. one million from Perpetual Treasuries owner Arjun Aloysius. Jayasekara MP did not want to go down alone, and he insisted that there was a list of 118 Parliamentarians mentioned in the Presidential Commission of Inquiry (PCoI) Report as having received money from the PT.  

The PCoI report is now the national archive and can be released to the public only after 30 years. A list of names of politicians who had received telephone calls from Mr. Aloysius was redacted from the PCoI report that was submitted to Parliament. It was that report which was later made public.   

The decision to censure the original PCoI report is problematic, but there is also a fundamental difference between talking to somebody over the phone and receiving gratuities, unless of course, one is to believe that each of those phone calls was followed up by a fat cheque.   

In all likelihood, there is no such list as those who received funds. What is there is a list of Parliamentarians to whom Mr. Aloysius has given phone calls. Now the President has sought the advice of the Attorney General to release that list. Yesterday, Speaker Karu Jayasuriya informed the House that he would release the names of the politicians in the said list.   

But, that is not what the public want to know now. Wild rumours are always more thrilling than facts. In the post-truth world we are living, rumours themselves become facts. Now, fewer people would be content with knowing the names of MPs who received phone calls, they want to know the names in the purported list of swindlers. That list may not exit not because no one took money, but because that was not the mandate of the PCoI. The government would have to institute a fresh CID inquiry to identify the full extent of complicity between certain parliamentarians and the Perpetual Treasuries. In the absence of a full investigation, pubic trust in politicians and political institutions would further erode.  

Wild rumours are always more thrilling than facts. In the post-truth world we are living, rumours themselves become facts. Now, fewer people would be content with knowing the names of MPs who received phone calls, they want to know the names in the purported list of swindlers

Some politicians have already admitted to having received money. Field Marshal Fonseka said he was given Rs 100,000. But, there is a major difference between a politician receiving Rs 100,000 as election financing and the former Finance Minister getting the rent of his penthouse apartment paid by the PT owner. Some others who have received bigger pay offs would not come out unless they are exposed by an investigation.  

However, those who cry foul about this nexus between politicians and election financing by fat cats, often disregard the underlining causes that led the politicians to rely on election financiers. Electioneering in Sri Lanka is an extremely expensive affair which neither the political parties, nor individual politicians can afford. The existing Proportional Representation system which compels the politicians to spread thin their resources across a large demographic area also favours the politicians with deep pockets. That also leads the politicians to rely on financing by various unscrupulous elements. Since such financial contributions are given in the understanding of future benefits, once elected politicians are compelled to extend various political favours, which effectively lead to tempering with tender procedures, filling state institutions with political acolytes and outrageous tax reliefs.  

The proposed election reforms of a mixed electoral system, which would reduce the size of the electorate, would create a better level playing field for politicians with fewer resources.   

However, another problem in Sri Lanka’s election financing would see that the impact of proposed reforms is limited. Election financing in this country is murky and unregulated. No one knows how much is received as campaign contribution and how that money is spent. Sri Lanka needs to institute an election finance law that would bring transparency to the whole process. Each political party and individual politician should be made obligated to publish all contributions they have received from outside parties, and their sources.   

Election financing is a fact of political life anywhere in the world where there are competitive elections. But, most countries do have laws that govern the process. We don’t. That absence has a heavy toll on the public trust in our political system. While politicians may not care much about the on-going de-legitimization of the political establishment at the moment, at one point, things would blow off the lid. Then it would be too late. The public interest in Gotabaya Rajapaksa’s presidential bid itself is a case in point of growing wariness among the people towards traditional politicians whom they consider as corrupt, incompetent and opportunistic.   

The government should try to regain the losing public trust in the political establishment. One area that needs to be addressed is the transparency in election financing.   

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