Stink of corruption: CAA official quits in disgust

Thushan Gunewardena outlines reasons behind his resignation as ‘executive director’ of the Consumer Affairs Authority Says the authority has lost its independence; it has become the property of ruling party politicos Garlic scam a broad daylight robbery, as corrupt Sathosa officials sell and rebuy stocks from trader; alleges that Undu seed stocks also changed hands in a similar manner

Garlic has a pungent odour, and so too it seems an unpleasant odour has emanated politically for the Government with the break out of the 'Garlic Scam' -- the latest of scams after the notorious multibillion rupee Sugar Scam under the present dispensation.

Cause for concern are the resignations of several among the elite corps of professionals who came forward to work for former Defence Secretary Gotabaya Rajapaksa with the hope of changing the old corrupt order and ushering in a new one under a non-politician President.

The country has seen a string of professionals quitting -- or being removed from positions in the health sector during the fight against COVID-19. But unlike some of the professionals who have resigned from various posts under this Government, Thushan Gunawardena, who resigned this week from his post as executive director of the Consumer Affairs Authority (CAA), said he was never part of the ‘Viyath Maga’ -the group of professionals atrracted to, and cobbled together by Mr. Gotabaya Rajapaksa in his quest for the Presidency, though he did support his candidacy. He was selected for the post at the CAA by a committee appointed by the newly elected President Gotabaya Rajapaksa, with his appointment coming under the signature of Presidential Secretary Dr. P.B. Jayasundera.

Holding a Master of Business Administration (MBA) degree from the United Kingdom, Mr. Gunawardena is an expert in AI (Artificial Intelligence) facial recognition-based law enforcement technology. He is a marketer, business administrator and has held senior positions in organisations such as American International Group (AIG), Ayudate in Copenhagen, Denmark and Ayonix in Tokyo Japan. He has held senior positions in organizations such as American International Group (AIG), Ayudate in Copenhagen, Denmark and Ayonix in Tokyo Japan, prior to taking up the post with the CAA.

On March 9 this year, a paper was submitted to the Director Board of the Consumer Affairs Authority (CAA) seeking approval to release Rs. 400,000 from the Authority’s funds to celebrate 'World Consumer Rights Day'. The Board approved the release of funds. Mr. Gunawardena, one of three full time members of the board, however, wrote below his signature that the funds “should be strictly for consumer awareness, not political.” According to Mr. Gunawardena, that small note made him some powerful enemies within the Government and was the start of his troubles at the CAA.

“It was said that the funds would be used for consumer-related activities of the CAA, but I had certain suspicions that it was not so. That is why I wrote the note for the safety of everyone,” Mr Gunawardena told the Sunday Times in an interview just a few days after throwing in the towel. His action then led to whom he calls “interested parties” that conveyed what he had done to ministers responsible. Eventually, the matter even made it so far as the Cabinet, where accusations were made that the CAA official was working against his own ministers.

The CAA comes under the State Minister of Co-operative Services, Marketing Development and Consumer Protection, Lasantha Alagiyawanna, but its Cabinet Ministry is the Trade Ministry headed by Bandula Gunawardana.

Mr. Gunawardena resigned from his post this week after serving one year and eight months into a three-year term. He said he resigned from his post as ‘executive director’. The State Ministry disputes this, stating that no such post exists, but acknowledges that he was one of three full time members. Mr Gunawardena, however, noted that even the official Identity Card issued to him by the CAA lists his position as ‘executive director’. He said no minister was empowered to remove him from the post unless he stepped down voluntarily, but said he made the decision to vacate his post voluntarily since his position had become "untenable".

“When we started, there were about 700 case files at the CAA that were still pending, some from as far back as 2013. CAA officials would tell you how I sometimes even went beyond my role to try and resolve these cases. We were eventually able to clear about 500 files. Many companies responded positively to our requests for them to do justice by the consumer and resolved their issues while we took legal action against those who did not,” Mr. Gunawardena explained.

He said the CAA would sometimes receive calls from various government ministers who spoke on behalf of certain traders against whom the CAA was taking action, but insisted that the CAA did not bend to such pressures and carried out its duties.

Aside from the board paper asking for funds, there were other incidents that created friction between him and the political authority. He said he opposed the Gazette setting out a maximum retail price for coconuts based on their circumference.

“That particular gazette was not even shown to us initially,” he revealed, adding that it eventually came to them after one and a half months. “I signed it but put the date and wrote “did not sign initially”.

Recently, the CAA’s official Facebook page was also “hijacked” by the State Minister’s team, which started posting the minister’s own speeches and political activities on the CAA page. Mr Gunawardena said he intervened to remove such political posts and get the page back under CAA control. “These were things that they didn’t like.” The old political apparatus was in motion, and these newcomers with visions of a new order were getting in the way. Then came the 'Garlic Scam'. It revolved around the raid that led to the exposure of a large-scale racket at the state-run cooperative store, Sathosa. According to Gunawardena, it was someone at the Sathosa head office who actually tipped him off that a scam was taking place. He had received a call on September 9. The caller declined to give his name but said an illegal transaction had taken place the night before. He had said Sathosa head office officials were present at the main warehouse at Welisara and were “getting ready to alter the books”.

A handpicked CAA team was sent with instructions to take photographs of the books at the warehouse immediately. When they arrived, they found people from the Sathosa head office already in place. A statement from the Store Manager revealed that the previous night, two container loads of garlic were taken from the Sathosa wholesale outlet and sold to a private trader at Rs 135 a kilo. The market price for a kilo of garlic is around Rs. 445. The garlic was reportedly abandoned at the port and had been cleared for sale to consumers via Sathosa outlets. Loads of essential and non-essential containers are lying at the port without clearance due to the foreign exchange crisis and the huge disparity in the rupee value in relation to the US dollar.

These items cannot be sold wholesale. Therefore, what had happened was that the Sathosa officials had sold the garlic to the trader for Rs. 135 a kilo and pocketed the money. The trader was a supplier of goods to Sathosa. Then the trader would in turn sell the same garlic stocks back to Sathosa at Rs. 445 a kilo, which is the value given by Sathosa. The two containers had some 56,000 kilograms of garlic. “This is taxpayers’ money. It’s broad daylight robbery,” Mr. Gunawardena said. CAA officials also found that this modus operandi was not a first time case. Similar rackets had been going on for months. The previous week, a container load of imported Undu seeds had been sold illegally in the same fashion.

Enter Minister Gunawardana. He called the Criminal Investigation Department (CID) to probe the allegations. But he accused outgoing Mr. Gunawardena of making false allegations against him and his Secretary that

they were impeding the investigations. He referred to his CAA namesake as a 'political appointee' and said that such persons ought not to make allegations against ruling party politicians.

The Police have already arrested the Deputy General Manager (Finance) of Lanka Sathosa over the incident while four Sathosa officials have been interdicted. Yet, Mr. Gunawardena said it was hard to believe that no other Sathosa officials at the highest levels are involved. “Barely an hour after our raid, the State Ministry issued a media statement stating that senior Sathosa officials were not involved in the scam. How can they know that without conducting a proper investigation?”

Mr Gunawardena said he too wanted the CID to ensure an impartial investigation.

After the raid, pressure was brought on him to resign, he said. The requests to step down were relayed through various individuals. “I was told that my conduct was causing issues and to give up the post. I didn’t want to create issues for anyone. He said, "I just wanted to do my job.”

One of his final acts prior to stepping down was to oppose attempts by the CAA to sign a Memorandum of Understanding (MoU) with importers and manufacturers of milk powder, wheat flour and cement. All have requested a price increase in recent times and have held discussions with the authorities in this regard. The MoU will grant price increases for these items subject to conditions. Some of these conditions include companies not being able to request for another price increase for three months, managing foreign currency issues related to purchasing costs, and ensuring that adequate supply shall be available for sale in the market without any shortages.

While the agreement sounds promising on paper, it also includes a “Force Majeure” which refers to unforeseeable circumstances that prevent someone from fulfilling a contract. The provision in the draft agreement includes a host of issues that would mean the companies can opt out of these conditions citing such (unforeseen) eventualities. They include epidemics and quarantine restrictions, war, any natural disaster, civil commotions and strikes.

Given that the COVID pandemic is likely to persist into the next year, the agreement, signed during a pandemic, will essentially be covered by the force majeure. “This would mean that if the importers say they can’t ensure supply, the CAA will not be able to intervene as we have already signed an agreement. I see this as an attempt made in bad faith to curtail the powers of the CAA. "I opposed it,” Mr Gunawardena said and then "they had to back off". That created another problem for Mr Gunawardena and he realised 'time’s up' and wanted to quit. There seemed so much you can take on.

Mr Gunawardena feels the MoU will soon be signed. “All they need to do is to appoint someone who will say "yes". The CAA will soon become a non-entity, a paper tiger and consumers left high and dry at the mercy of corrupt officials, traders and even politicians. "They might as well sign agreements with other companies too and close the Authority down. This is beyond idiocy.”

The hefty fines stipulated for traders who do not sell goods at controlled prices in terms of the Consumer Affairs Authority (Amendment) Bill that was passed by Parliament this week were not what were suggested by the CAA, he revealed. “The Chairman and the Board of Directors were of the view that the fines should be practical enough for us to apply them on the ground.

These fines (under the new Act) are highly unrealistic, not practicable on the ground and will leave room for corruption,” he said.

Such unrealistic fines will only encourage further corruption and the CAA will end up losing even more revenue, he believes. “We were for increasing fines but we suggested realistic figures, but the amounts eventually included in the proposed law are laughable. What we should be doing is going behind big traders responsible for major economic losses, but we continue to go after small traders, which is highly ineffective,” he said.

While his appointment was a political one, Mr Gunawardena insisted that he was not a supporter of a political party or organisation. “I supported the President initially, that’s all. There was no affiliation to any party or organisation,” Mr Gunawardena said, distancing himself from the ruling party.

Though he supported the President’s vision outlined in his “Vistas of Prosperity and Splendour” manifesto, Mr Gunawardena said his personal experience shows that any hope of moulding a just, corrupt-free environment, especially within the government sector is not possible.

Claiming he would “politely decline” another government position, Mr Gunawardena said he was open to considering another opportunity to do something for the country. But he emphasised he wouldn’t be taking up any position where a minister has control. “A regulatory body such as the CAA, for example, has to be independent. It can’t be a partisan body. The CAA is not independent. It has become the property of certain ministers,” he says.