Ambassador’s suspicions proved true Major scam at Embassy in Rome uncovered

(by Mike Andree)

During the month of August 2009, when Sri Lanka’s Ambassador to Italy Hemantha Warnakulasuriya suspected that the Embassy’s funds had been and were being misappropriated, he informed the then Minister of Foreign Affairs Rohitha Bogollagama and former Foreign Secretary Dr. Palitha Kohona of his suspicions. A team of investigators, from the Foreign Ministry, comprising Chief Accountant K. D. Ranjith and Director - Internal Audit and Investigations J. H. Liyanage, was sent to Rome in October that year. After a thorough investigation, which lasted several days, the investigators were able to uncover the operation and an officer attached to the Embassy was interdicted.

Although the Ministry of Foreign Affairs had, by circular, prescribed that all monies collected by the Embassy be deposited, on the same day, in the bank and thereafter making whatever payments that had to be made by cheque, or if by cash, after withdrawing the amount, to be paid, from the bank, the Mission’s then Attache, K. K. Krishnanathan, had not complied and had made payments from the cash collected and held back.

During the months of August and September 2009, the Italian Government declared an amnesty, and more than 5,000 Sri Lankans had applied for new passports to facilitate their application to regularise their stay in Italy. During that period the Embassy made a record collection of money running into millions. Therefore, unless the collections made by the Attaché were appropriately accounted and deposited according to the Departmental orders, the money in the hands of the Attaché could have been misused; the temptation was great.

The Head of Chancery at that time was Ranjith Gunaratna and it is very clear that he had been negligent or was accessory to the offence of misappropriation which had taken place during his time of supervision.

One of the reasons for this misappropriation was the manner in which certain diplomatic officers, including the Head of Chancery, violated Departmental orders with regard to children’s school admissions. During last year, the Government decided to revise its regulations and imposed on the officer a 15% levy from the admission fees to be paid by the officer himself. It has been revealed that Ranjith Gunaratna and K. K. Krishnanathan and other members on the staff had violated these Departmental orders and had not paid the amount due to the State. There had been a clear suppression of information given to the Accounts Department in Colombo.

After an initial investigation held in Rome, by the team of investigators, it was realised that the amount of € 48,000 was missing, and K. K. Krishnanathan could not offer any valid explanation as to what he did with that amount. Thereafter, the investigations carried out in Colombo showed that the actual amount missing from the Embassy accounts was nearly € 98,000. The Chief Accountant stated that the misappropriation was carried out from the date on which Krishnanathan assumed office as Attaché, in July 2007, until he was recalled to Colombo in December 2009.

It was not possible to trace the manner in which the accounts were maintained, as the accounts were maintained in violation of all the procedures, prescribed by the Accounts Department in Colombo, by inflating the figures in hand, so that no loss could be identified, unless a thorough investigation was carried out on the spot.

There were three diplomatic officers appointed by the Ministry of Foreign Affairs who were in charge of the Chancery: Mrs. S. H. U. Dissanayake, C. A. H. M. Wijeratne and Ranjith Gunaratna. Though this matter was detected during the month of August 2009 by the Ambassador, by October 2009 it was known that the amount of € 48,000 was missing. Yet the Department was slow in taking action against Krishnanathan.

He was interdicted only a few weeks ago, but the investigations stopped there, without proceeding to find out whether any senior diplomatic officers, who were in charge of the Embassy’s accounts, were involved.

It has now been revealed, by the Accounts Department, that all the Embassies which had collected large sums of money from the Diaspora for consular activities, may have used the same method to misappropriate Government funds. Unless the Government of Sri Lanka decides to investigate these Missions, where a shadow of doubt is being cast, nothing will be revealed about the misappropriation of money going on in those Embassies.

Before this incident, when the Accounts Department found a lack of supervision in a Mission based in Europe, casting aspersions on the Attaché of that Mission, the Ambassador had sent a long letter explaining the deficiencies and defending the Attaché. It is indeed a sad day for the Ministry of External Affairs when a diplomatic officer and an Attaché work in collusion to misappropriate Government funds, a source in the Ministry of External Affairs, who wished to remain anonymous, said. It is now up to the Ministry of External Affairs to probe into these matters fully, without trying to protect its own officers, for fear that it will lead to other charges of misappropriation and would indeed be termed as opening of a Pandora’s box.

As the Ministry of External Affairs comes under the vision and direction of a competent law professor such as Prof. G.L. Peiris, the people would expect him to direct the officials to launch a full investigation into how such large sums of money were misappropriated and thereafter subject the offenders to investigation and prosecution by the Criminal Investigations Department.

It is understood that only the Attaché, responsible for the misappropriation, was interdicted, and that the inquiry may take a number of years. By that time, everyone will have forgotten about this case, which will be out of the public domain.