Without political will, Pandora papers are doomed to fail

What would be the fate of former Deputy Minister Nirupama Rajapaksa and her husband Thirukumar Nadesan in the light of the revelation of their seeming secret dealings with offshore companies and trusts reveled by the “Pandora papers” of the International Consortium of Investigative Journalists (ICIJ)? Going by outcome of corruption allegations against politicians and their friends as well as relatives for the past few decades the simple answer for the question is “Nothing” and they will carry on with their businesses without a scratch.

The Washington-based ICIJ had published 11.9 million leaked documents with 2.9 terabytes of data which it had named “Pandora Papers” beginning on October 3. And some of the documents had linked Nirupama and Nadesan with several offshore dealings which the ICIJ suggests to be tax evasions and suspected sources of income.
The leak exposed the secret offshore accounts of 35 current and former world leaders including former presidents and Prime Ministers and heads of State. More than 100 billionaires, celebrities and business leaders had also been implicated. ICIJ also exposed a similar cache of 11.5 million secret documents with 2.6 terabytes of data called “Panama Papers” in 2016 in which 65 Sri Lankans had also been mentioned as secret offshore assets holders. The current cache of documents are the largest such date dump released to date. 

"The leak exposed the secret offshore accounts of 35 current and former world leaders including former presidents and Prime Ministers and heads of State. More than 100 billionaires, celebrities and business leaders had also been implicated"

ICIJ in collaboration with 140 media organizations had involved more than 600 journalists in 117 countries to trawl through the files of 14 sources for about two years before publishing them. Explaining the nature of the offshore companies in various countries which are called tax heavens or secrecy jurisdictions that have been used by the powerful people in politics and business fields among others to hide their wealth, the BBC says that it is easy to set up those companies, there are laws that make it difficult to identify owners of these companies and there is low or no corporation tax imposed on them.

The ICIJ, in a letter to Nirupama and Nadesan had questioned the duo about their offshore companies and trusts, suggesting what really had happened. Some of their suggestions which could be sifted through the questions they had put to Nirupama are: from early 1990s to early 2010 Nirupama was a controlling party to the offshore company Rosetti Ltd; she is a beneficiary of Pacific Trust which holds US$51 million art collection, Sri Lanka State agencies had hired Rosetti as a contractor, Nadesan had set up offshore companies and trusts called Sri Nithi Trust, Pacific Trust, Pacific Commodities, Pallene, Chalan Oil, and Red Ruth Investments.
The ICIJ had questioned the former Deputy Minister whether she had revealed her offshore assets to the state authorities in Sri Lanka.

The questions posed to Nadesan indicate: a 2011 document say Nadesan’s family fortune amounts to 100 million pounds ($160 million), 2017 Sri Nithi Trust and Pacific Trust combined held about US$ 18 million in total, Rosetti and Pacific Commodities in Jersey provided consultancy for government contracts in Sri Lanka, Pacific Commodities provided services to Sumitomo Corp. and German Company Contract GMBH (The ICIJ questions as to whether Nadesan had used his political connection with Rajapaksa family to obtain the contracts), Rosetti was used to buy apartments in Sydney and London worth more than US$ 4 million. 

"The questions posed to Nadesan indicate: A 2011 document say Nadesan’s family fortune amounts to 100 million pounds ($160 million), 2017 Sri Nithi Trust and Pacific Trust combined held about US$ 18 million in total"

The questions also suggest: In 2015 Nadesan requested Asiaciti to send his documents via courier saying that his source of funds could be challenged, In a 2016 email to Asiaciti officers, Nadesan told not to disclose the information to a Dubai banker who was assisting him to open a bank account for his company FP FZE, from at least 2002 to 2007 Rosetti made annual US$140,000 loans to Red Ruth Investments and Red Ruth in turn distributed the funds to Cook Island trust Sri Nithi and other shell companies. 

The Consortium of journalists had questioned what the purpose of these transactions is and what the sources of those funds are. “Why did you choose known tax heavens such as Jersey, the Cook Islands and Samoa to incorporate your companies and trusts?” they had further asked.

Setting up of offshore companies or trusts is itself would not suggest those who own them or involved in them are carrying out illegal businesses or transactions. Yet, these dealings and their purposes must be clear to the authorities of the country where those who are involved in such companies live, as one could use these entities to evade tax and amass illegal wealth abroad.  Only a strenuous effort involving a great deal of money, time and especially a strong political will would decide if these dealings are genuine or not.

Despite the veracity of these documents seeming to be proven, some of the background details given by the journalists attached to the ICIJ raise ethical questions.  In an article titled “Sri Lankan power couple piled up luxury homes, artworks and cash offshore as ruling family rose and rose” Scilla Alecci who on behalf of the ICIJ had sent the letter to Nirupama and Nadesan says “The seeds of the (ethnic) conflict go back to 1948, when nationalists, led by Don Alwin Rajapaksa, granted certain citizenship privileges to the Sinhalese majority, alienating the country’s ethnic Tamil minority.” 

"The Consortium of journalists had questioned what the purpose of these transactions is and what the sources of those funds are. And why did they choose known tax heavens such as Jersey, the Cook Islands and Samoa to incorporate their companies and trusts"

Despite the fact that the citizenship Acts of 1948 and 1949 alienated the Tamils being true, linking D.A.Rajapaksa, the father of President Gotabaya Rajapaksa and Prime Minister Mahinda Rajapaksa to those Acts is absurd and a something we have never heard of. And also it is malicious when it is tied to an illegal wealth issue. 
Also the article refers to an allegation against the Rajapaksas that the family has amassed a multibillion-dollar fortune and hidden part of it in bank accounts in Dubai, Seychelles and 
St. Martin. These things are not impossible, but mixing up unsubstantiated allegations with substantiated millions of documents might dilute the weight of the ICIJ’s invaluable investigation.

President Gotabaya Rajapaksa had instructed to carry out investigations into the allegations made by the ICIJ against the Sri Lankans and the Commission to Investigate Allegations of Bribery and Corruption (CIABOC) had accordingly summoned Nadesan to appear before the commission on October 8. However, having not even a fortnight passed since the exposure of the Pandora Papers by the ICIJ, the outcry over the issue has died down by now.  Is this an indication of what is to come with regard to the investigations? 

Chandrika Kumaratunga who accused the Premadasa government of mass-scale corruption before the 1994 President election warned that the corrupt politicians and officials would be brought to Gall Face to be skinned once she came to power. Similarly, Maithripala Sirisena while contesting for the Presidency in 2014 promised to closed the airport on January 2015, the Election Day, to prevent the corrupt politicians and officials from fleeing the country. And the current leaders vowed to bring the culprits of the Central Bank bond scandal to book. But, finally all sharks are at large while the accusers being accused of every time after a regime change. 

This is a country where a commission appointed by the government had recommended to annul the court cases against the members of the government and their allies and to release the accused of those cases. It interestingly had recommended taking legal action against those who were instrumental for the initiation of those cases and the officials of the Attorney General’s Department who handled them. However, the public opinion and the response from the international human rights organizations were so strong that the government had to backpedal on the matter. 

In spite of our past experience pushing us to be pessimistic, only the time will tell whether Pandora Papers would really open a Pandora’s Box, through investigation by relevant state agencies here and abroad.