Parliament divided over USD 2.5m cyber crime | Print Edition

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By Sandun Jayawardana 

The report by Parliament’s Committee on Public Finance (COPF) on the fraud linked to the cybercrime in which a USD 2.5 million debt repayment to Australia went missing continued to raise serious questions about the security of public funds, as MPs debated the Committee’s findings in the House.

Wednesday’s adjournment motion on the matter was originally supposed to be moved by COPF Chairman Harsha De Silva, but it fell to Chief Opposition and Samagi Jana Balawegaya (SJB) MP Whip Gayantha Karunathilaka, as the former was unable to attend Parliament owing to the passing away of his father.

Seconding the motion, SJB Kegalle District MP Kabir Hashim described the disappearance of the funds as an unprecedented security breakdown in the history of the country’s sovereign debt repayment system. He pointed out that the COPF report had concluded there was “damning evidence” that a massive fraud had taken place. The most important aspect of the report is that both the government and opposition members on the Committee have agreed with the report’s conclusions, Mr. Hashim stressed. “As such, there is no debate about the conclusions contained in the report as both sides agree with them.”

Additionally, all the government and opposition MPs on the Committee have agreed that the Secretary to the Ministry of Finance and the Governor of the Central Bank of Sri Lanka (CBSL) bear responsibility for lapses that had been identified during the COPF’s inquiry, the SJB MP observed. “Clearly, the responsibility of protecting the institutional credibility and structure rests on the Chief Accounting Officer of the two institutions, being Secretary – Finance and the Governor – Central Bank,” said Mr. Hashim.

The question then arises as to why they chose to suspend four middle-level officials. On what grounds were they held responsible for all that had happened, he queried. The MP also urged the government to enact the 11 recommendations made by COPF through the report. The SJB, he said, would also like to add to these recommendations by calling on the government to conduct a forensic audit into the matter by an external agency, as well as to appoint a Parliamentary Select Committee to probe the cybercrime incident.

It is deeply regrettable that when both the government and opposition members of COPF have agreed with the Committee’s findings into the disappearance of the USD 2.5 million payment, certain MPs in the opposition are attempting to distort those findings to suit their own political ends, said Deputy Minister of Industry and Entrepreneurship Development Chathuranga Abeysinghe. He further accused the opposition of attempting to bring out interpretations that were not included in the COPF’s report. The report clearly states that the cybercrime occurred owing to long-standing deficiencies in the entire system, he asserted.

Mr. Abeysinghe argued that the focus should be on the efforts being taken by the government to resolve the structural, technical, staff and system issues that have long plagued the country’s public service. This is not the time to hurl unnecessary allegations at the Treasury and its Secretary, or at the CBSL and its Governor, he further said.

The government is not telling the truth regarding the failures that led to the incident, said Opposition Leader Sajith Premadasa. He noted that public debt management functions, which had previously been handled by the CBSL’s Public Debt Department, were transferred to the Treasury’s Public Debt Management Office (PDMO) through the Public Debt Management Act.

The cybercrime occurred during a period of transition when public debt management functions were being taken over by the PDMO, with the government failing to establish Standard Operating Procedures, Terms of Reference, Key Performance Indicators or Delegation of Responsibilities.The Opposition Leader also pointed out that there was no consensus between the Finance Ministry and the CBSL regarding who should bear responsibility for the loss of USD 2.5 million in taxpayer funds. The CBSL passes the ball onto the Treasury and the Treasury Secretary, while the Treasury passes the ball onto the CBSL and its Governor, he remarked.

“I don’t need to go into detail about what it means for the economic policy and economic future of our country when the two institutions tasked with implementing our fiscal and monetary policies can’t work in unison.”

The opposition is attempting to politicise the cyber-theft of the USD 2.5 million by trying to link the Secretary to the Treasury to the incident and trying to portray it as the country’s biggest ever cybercrime, said Deputy Minister of Finance Anil Jayantha Fernando.

Investigations into the incident are continuing both at the local and international level, he stressed. “During similar incidents under previous governments, investigations were launched and forensic audits were conducted, but nothing was done based on those findings,” the Deputy Minister emphasised.

He argued that the Treasury Secretary and other senior officials had taken prompt steps after finding out the system had been breached and that their actions had prevented a worse disaster.

“We are not going to stop with the investigations,” said Mr. Fernando. “We are currently in the process of restructuring our internal controls to ensure that the lessons learned from this incident are applied and such a thing never occurs again.”

There is no debate that the loss of the USD 2.5 million occurred due to a crime and that it caused a loss to the State, said Leader of the House Bimal Rathnayake. The opposition, though, was engaged in an unseemly attempt to try to pin the blame for the incident on the government, he charged. “This is a sign of desperation. We don’t engage in theft, fraud or wastage, so they are trying to pin anything and everything they can on the government,” said the minister.

He defended Treasury Secretary Harshana Suriyapperuma against the accusations being made against him over the loss of the USD 2.5 million, adding that, qualitatively, the Ministries of Finance, Justice and Public Security had performed far more than other ministries and much better than they ever have under previous governments.