Makings of a 'Gota-po'

By Ranjith Jayasundera

While the battle between the judiciary and the executive is fast turning into a simmering pot set to burst at any minute, a case recently heard in the Supreme Court had led to Chief Justice Sarath Silva questioning in open court how the Defence and Finance Secretaries formed a private security company for duties that should have been performed by the army or police.

The case stems from the Defence Ministry's move in October 2006 to set up a private security firm called Pramuka Arakshaka Lanka Limited. The company was formed in typical Chinthana style, like Mihin Lanka and Lanka Logistics and Technologies (LLTL), in effect avoiding the oversight of either parliament or the Auditor General.

Pramuka Arakshaka Lanka was set up as a limited liability company with 205 shares. 100 of those shares are held by Defence Secretary Gotabaya Rajapakse. Another 100 shares are held by Treasury Secretary P.B. Jayasundera. Defence Ministry Lawyer Mohan Peiris (P.C.) and four Additional Secretaries of the Defence Ministry hold one share each.

Registered address

The company's registered address is that of the Defence Ministry at 15/5 Baladaksha Mawatha, behind the Taj Samudra Hotel at Galle Face. The company's secretary is SLT Chairperson and LLTL Company Secretary, Leisha Chandrasena.

The private security industry is one that is completely dependent on the Defence Ministry. Each private security firm and private security guard needs to obtain a license from the Ministry to operate, and separate licenses are also required to bear firearms. This new company, supposedly owned by the Defence Ministry and Treasury, is thus in a position to scuttle its competition towards its own end.

Whether it is a company actually 'owned' by the Defence Ministry is a yet unanswered question. When The Sunday Leader contacted both the Defence Ministry, telephone operators were unaware of Rakna Arakshaka Lanka's very existence. More so, parliamentary approval was never obtained for the formation of this company and investment into its shares.

Rakna Arakshaka Lanka Limited (RALL) has since taken over security at installations owned by the already cash-strapped Ceylon Petroleum Corporation, the Hambantota Harbour and Sri Lanka Telecom (SLT).

It is the manner in which the company took over security at SLT that saw it brought before the Supreme Court in July. The security of SLT installations in the Central and Southern Provinces was tendered in November 2006 and awarded to a security firm named C.P. Lanka. That company was awarded a three month extension to continue their services until the end of April 2008, in order to allow SLT to call a fresh tender as per proper procedure.

Tenders

SLT thus opened a tender, L8/01/SEC/2008, for the provision of security services for its installations in the Southern, Central, North Western, North Central and Western Metro areas. C.P. Lanka and several other firms submitted bids, and meanwhile SLT had on May 1 extended C.P. Lanka's existing contract in writing, by another two months until end-June.

In early June, the tender was mysteriously scrapped, and a new tender, L8/01A/SEC/2008, was called and several companies re-submitted their bids. The Defence Ministry's RALL did not submit bids for either of these tenders. While the tender board was reaching its decision, SLT again extended C.P. Lanka's South and Central Province Security contracts in writing, from July 1 to August 1. However when the C.P. Lanka guards had reported for duty at several Central Province installations, they were confronted and turned away by employees of Rakna Arakshaka Lanka Limited, who had taken over security in the cover of night.

RALL had no contract with SLT and was not a bidder in any of the tenders. They would in any case have been ineligible to bid as the tenders required a minimum of three years experience in the private security industry - RALL had none, and was incorporated less than two years ago.

Hundreds unemployed

In a heartbeat, over 400 security guards working for CP Lanka were unemployed, due to an arbitrary off-the books decision by SLT to terminate their employment contract and give their jobs to a company in which the SLT Chairperson Chandrasena had a clearly vested interest.

C.P. Lanka was even harder hit. As per their contract with the individual guards, arbitrary termination required that they pay each of the 400 employees three months salary, or Rs 15.3 million.

RALL then on July 6, published an advertisement in Irida Lakbima newspaper to employ 'junior security officers' for a company affiliated to the Defence Ministry. According to court documents obtained by The Sunday Leader, C.P. Lanka had noticed the ad, received "reliable information" that SLT was to sack them from the Southern Province also, and fearing the worst, filed a case in the Supreme Court to prevent SLT from unfairly terminating their contract.

The defendants were Rakna Arakshaka Lanka Limited, Defence Secretary Gotabaya Rajapakse, Treasury Secretary P.B. Jayasundera, SLT Chairperson and RALL Secretary Leisha Chandrasena, and Attorney General C.R. De Silva. The lawyer for the petitioner was Attorney J.C. Weliamuna.

When the case was taken up on July 25, it was heard by none other than Chief Justice Sarath N. Silva, who took his rulings on government excess and corruption to another level entirely. According to lawyers present in court, the Chief Justice had been on fire from the start of the hearing. He warned President's Counsel Mohan Peiris, who represented the respondents, that he was putting himself at risk, as he too would be made a respondent as a director of the company.

CJ livid

"You should know where you should serve and where you should not," the CJ had warned. "Ultimately you will also be held responsible for these things." He also questioned how ministry secretaries could serve upon the boards of companies such as RALL. "How can a secretary of a ministry serve in a business venture in another capacity?" he is to have asked, eliciting no response from Peiris.

It was noted in court that RALL was not a body assigned to any ministry by the President, and that it did not come under the oversight of either Parliament or the Auditor General, and thus was a law unto itself and the Defence Secretary alone.

Chief Justice Silva also noted that Treasury Secretary P.B. Jayasundera had resigned from the RALL board of directors before the case was filed. Jayasundera was replaced not with another Treasury representative, but by a private citizen named Mahinda Saliya Marukkudeva of Mahabodhi Mawatha, Kadawatha.

 With Jayasundera's resignation, the company was left totally in the hands of the Defence Ministry with no Treasury or other government oversight whatsoever. Again in May 2008, one of the Defence Ministry Additional Secretaries, Santha Kumara Sirisena, resigned as a director of RALL, and was replaced with another private citizen, Arunthavanathan Ravindran of 2nd Lane, Ratmalana.

Chastised

The Chief Justice's most scathing comments according to lawyers present in court however, were saved for SLT Head, Leisha Chandrasena. Silva chastised her on the immorality of her abusing her position as state-appointed SLT Chairperson to subvert procedures and give business to a company in which she had a vested interest.

When Mohan Peiris cited 'security reasons,' stating the specially trained and armed people were necessary to provide security at these state institutions, the Chief Justice had snapped back "why don't you give it to the army or the police?"

"That is free of charge, and it's what the people are paying for," he noted,  no doubt leading to the question in the public mind whether a private army was in the making.

The fact that the tender evaluation board had actually come to a decision to award the security tender to some of the bidders makes the move to hand over security to RALL an even more flagrant abuse of power. An SLT accounting officer said that the company has not received a contract from RALL, and no invoices have been raised as of yet. She said that they have however been informed that the RALL guards would have to be paid Rs 1000 per eight hour shift.

This would require three guard shifts (Rs. 3,000 in wages) per post per day. Before the Defence Ministry company was brought into the picture, SLT paid Rs 475 for a 12 hour shift, and two guards on 12 hour shifts were able to man a post, costing SLT Rs 950 per day per post.

Cost millions

Chandrasena's role has thus cost SLT millions of rupees to no benefit. For example, before July 1, around 400 guards from CP Lanka were employed at SLT institutions in the Central province, to man 200 posts. They were each paid Rs 475 per day and the posts were manned every day of the month. Thus the total cost to SLT of providing security services in the Central Province was Rs 5.7 million per month.

After Rakna Arakshaka took over, the schedules were re-arranged for the day to be divided into three eight hour shifts instead of two 12 hour shifts. A guard was paid Rs 1,000 for working an eight hour shift, and thus the cost of 30 days' security services for SLT in the Central Province from the Defence Ministry is Rs 18 million - more than three times what it was previously costing.

Although The Sunday Leader could not obtain official comments from anyone at SLT, Rakna Arakshaka or the Defence Ministry to verify these figures, a group of employed guards we spoke to also claimed that SLT was charged Rs 1,000 per shift for their services. "But this money is not all for us," they said.

"The other companies used to take Rs 50 as their commission and we would keep the rest. Now the government one keeps Rs 500 rupees and we get the rest. We make a little more money because they charge so much more, but most of it is not for us."

Army deserters

Two of them were middle-aged ex-army soldiers whose income was supplemented by their pensions. One of them was employed at a Colombo CPC installation and alleged that several army deserters were also employed by Rakna Arakshaka and thus were awarded protection from arrest. "We are not complaining though. Now we are not fighting the war, but we are employed for a reason. One day they will need us and we will be ready," the veteran said ominously.

 The General (Manager) of this 'army' is a retired army officer, a Major General, whom the guards we spoke to allege is paid "well over two lakhs."

The officer in question is Major General Egodawela, a retired officer with no known bravery awards in his career, but with strong SLFP roots. General Egodawela had a close rapport with the Rajapakse family well before the 2005 presidential election.

When asked about his achievements while in the army, officers of his vintage reply wryly with but two words: Elephant Pass. This is the man selected by Gotabaya Rajapakse to run his 'private army,' it was alleged.

It is quite possible that RALL can afford Rs 200,000 for a General Manager, since the company should be running at a phenomenal profit, if it truly does keep Rs 500 per eight hour guard shift. From SLT's Central Province installations alone they would make Rs 9 million per month; money that for all intents and purposes, is not subject to any form of government audit.

Impending disaster

After the July 25 Supreme Court hearing, it was clear from the Chief Justice's hard-hitting observations and comments that the case would lead to disaster for Gotabaya Rajapakse, P.B. Jayasundera, Rakna Arakshaka and Leisha Chandrasena if it continued.

With the petitioner company, C.P. Lanka, being a security company and thus dependant on Defence Ministry issued licenses for its operation; the Defence Ministry had all the leverage it needed to diffuse the case. In addition, one of the directors of C.P. Lanka, C. Palihawardena, is also supposedly a school classmate of President Mahinda Rajapakse.

With these and other 'Chinthana' style factors coming into play, C.P. Lanka was pressured into dropping a case that could have emerged into a landmark Supreme Court judgement. Their fear was so great that when we contacted Palihawardena, he claimed that he never had any problem with a Defence Ministry security company, despite a court affidavit filed by him to the contrary.

Within days of the case being dropped - and in violation of another contract extension issued by SLT to C.P. Lanka - Rakna Arakshaka guards took over control of SLT installations in the Southern Province also, denying entrance to the C.P. Lanka personnel.

The rationale touted by the Defence Ministry for running its own private security company is that it could provide employment for retired armed forces personnel. This is the message conveyed to both SLT officers and the Petroleum Resources Development Ministry.

Senseless

However, this is what most existing security companies do, since these retired soldiers and officers are the best-suited people to work in the security industry due to their training and experience.

The Defence Ministry starting their own private security company is senseless, as it in effect allows Gotabaya Rajapakse to select which former security forces personnel get the best retirement benefits, and thus cultivates more loyalty and cronyism at state expense. The formation of this company and the abuse of power by officials such as Chandrasena to employ its services in state assets when there is a conflict of interest dramatically increases the risk of Sri Lanka coming under a dictatorship.

Even when former Deputy Defence Minister Anurudha Ratwatte was accused of using armed forces personnel to wreck havoc in Kandy during the December 2001 parliamentary elections, there were service records, a chain of command and some level of accountability that allowed the public to find out what happened.

Rakna Arakshaka Lanka has no publicly accountable chain of command. The government has already demonstrated its willingness to deploy state assets and personnel for its election related and political work. With the armed forces and police however, there are limitations on what government cronies can do, even at the whim of their political masters.

Without a trace

Due to the structure of the services, policemen and soldiers on the ground have a plethora of officers to whom they are answerable between themselves and the Defence Ministry, making it more difficult for notorious orders to be given without a trace.

But with this company, the Defence Secretary has the unrestricted and arbitrary power to issue firearms licenses to thousands of ex-soldiers employed by him, and they would be a law unto none other than themselves given that the only arms of government who could control them by law - the police and the armed forces - also fall under the Defence Ministry.

Ordinary Sri Lankans need to have a serious think about whether there is to be any limit to the power of the executive and whether they will allow this government to continue arbitrarily infringing the rights and privileges of ordinary Sri Lankans.