Lanka’s Central Bank raised alarm about Chinese payments for Rajapaksa poll campaign in 2015: Report

Lanka’s Central Bank raised alarm about Chinese payments for Rajapaksa poll campaign in 2015: Report

Colombo, July 1 (ECONOMYNEXT): Sri Lankan Police have been asked to revive an investigation into alleged Chinese funding of Mahinda Rajapaksa’s re-election bid following a foreign newspaper report that $7.6 million was paid through the Standard Chartered Bank.

Official sources said it was the Central Bank’s Financial Intelligence Unit which initially raised the alarm and flagged their concerns about CHEC payments in 2015.

With the huge work load of investigations, the Chinese funding investigation appeared to have been overshadowed by other high profile cases till it was highlighted by the New York Times.

Deputy Minister of Social Empowerment Ranjan Ramanayake lodged a complaint with the Financial Crimes Investigation Division on Friday after the New York Times (NYT) last week said that the China Harbor Engineering Company (CHEC) paid the money days before the January 2015 election.

The amount of money allegedly pumped into the Rajapaksa campaign was considerably less than the 24 million dollars thought to have been paid following preliminary investigations by the police two years ago.

The NYT put the figure at 7.6 million dollars.

Government spokesman and Health minister Rajith Senaratne said the New York Times had helped revive the investigation. He said denials issued by Rajapaksa loyalists to the local media were insufficient and wanted them to respond directly to the foreign newspaper.

President Rajapaksa’s legislator son Namal on Friday promised a statement regarding the NYT report, but it was yet to issue by Saturday afternoon.

“We’ll be issuing a statement shortly in response to the inaccuracies in the article,” namal said. After a tweet which said: “Many inaccuracies in this article.  Acknowledging the Port is near 1 of the world’s busiest shipping lanes shows why it’s still a major focus for the West, fearing China’s growing global influence. #SriLanka’s assets shouldn’t be used as geopolitical pawns in this power struggle.”

The former central bank governor Nivard Cabraal too rejected the report saying much of what he had told the NYT reporter was not included in the story headlined:  “How China Got Sri Lanka to Cough Up a Port.”

Cabraal also made no reference to the alleged payments from CHEC using a Standard Chartered bank account in Colombo.

In its report, the NYT said it had seen documents from an internal governmental investigation the details of payments and verified them through intelligence sources as well as questioning people to whom some of the cheques had been made.

“With 10 days to go before polls opened, around $3.7 million was distributed in checks: $678,000 to print campaign T-shirts and other promotional material and $297,000 to buy supporters gifts, including women’s saris.

“Another $38,000 was paid to a popular Buddhist monk who was supporting Mr. Rajapaksa’s electoral bid, while two checks totalling $1.7 million were delivered by volunteers to Temple Trees, his official residence,” the NYT said in the report published on its print edition on June 26.

Most of the payments were from a subaccount controlled by China Harbour, named “HPDP Phase 2,” shorthand for Hambantota Port Development Project. The bank account number had been given as  02 013359190/19 in previous Sri Lankan media reports.

In the final weeks of the  2015 election, China’s ambassador broke with diplomatic norms and lobbied voters, even caddies at Colombo’s premier golf course, to support Mr. Rajapaksa over the opposition, the NYT said.

The NYT investigation suggests that even through the new administration of President Maithripala Sirisena wanted to reduce the country’s reliance on China, it was locked into a debt trap.

The NYT said the Hambantota port deal was one of the most vivid examples of China’s ambitious use of loans and aid to gain influence around the world — and of its willingness to play hardball to collect.

There was no immediate comment from the company.

Mr. Rajapaksa and his aides did not respond to multiple requests for comment, made over several months, for the article, the NYT said adding that officials for China Harbour also would not comment.

However, in July 2015 when the allegations were first made, CHEC had issued a statement deny they funded Rajapaksa’s re-election bid.

“The CHEC calls on all the relevant Sri Lankan officials and parties not to misunderstand their responsible and cooperative partner, and not to send a wrong signal to the investors from China and all other countries,” the CHEC said in a statement at the time.

(The featured image at the top shows Chinese President Xi Jinping with the then Sri Lankan President Mahinda Rajapaksa)