Laundering Black Money

B. Anton JEYANATHAN Rtd. DIG, SLP

The high drama of bribing a Member of Parliament to cross over from one Camp to another was a prime time mega show on the TV channels last week. This clearly indicated the availability of large sums of Black Money which are being used to undertake buying over of Members of Parliament and political bigwigs. I am certain that such large sums of money are not monies earned through legal means and definitely earned through illegal means.

Wealth amassed through illegal activities which cannot be accounted for, is the wealth that needs to be laundered. Illegal activities are many and differ from country to country. Nevertheless, illegal activities such as:

a. Smuggling of contraband
b. Drug trafficking
c. International arms sales
d. Terrorism
e. Underworld activities
f. Organised criminal activities (kidnapping, extortion, money lending, illegal money exchanging, maintaining underground banking systems, gambling, prostitution, bank burglaries, fraud, contract murders etc.,) are universally recognized as illegal criminal activities.

The above illegal activities are very lucrative and rake in enormous wealth, which cannot be accounted for, through either the legal banking or financial systems prevailing in any democratic country. The activities are done in strict secrecy handled by a few trusted members of the syndicate. The unaccounted wealth which cannot be circulated through the legal process is termed as Black Money.

Political parties

Transnational companies, powerful syndicates maintain and operate Slush Funds or Entertainment Funds, outside their declared funds. This fund is maintained to bribe and corrupt law enforcement officials, politicians and for contributions to the funds of various political parties.

Money laundering is the process of concealment of the origin of income earned through illegal activities and its conversion to other legitimate assets, in order to disguise its illegal source.

The public are aware of the number of crossovers of Members of Parliament and politicians from one Camp to another in the recent past.

Members of Parliament

It will be naive to believe that these crossovers were due to the interest of the public or the nation, or due to adherence to certain ideals and policies. Though MP Muzzammil exposed the transaction of large sums of money offered to him to crossover, one can easily conclude how much of money could have changed hands in the recent past, where crossovers of prominent Members of Parliament took place from one Camp to another. They will only know how much of money changed hands from the party to which the members crossed over. They will only know the identity of the person or persons who paid them off.

There is no gainsaying that there is an enormous amount of Black Money which is available in this country, which is being used specially during the current political campaign. One has only to switch on the television of more than 13 to 14 Channels, where there are no value added programs either for the adults or children being telecast during the past two to three weeks.

Paid advertisements

Paid advertisements on behalf of various candidates, in particular the two main candidates are dominating the TV screen depriving the viewers of relaxed entertainment. One has to drive around the city, the suburbs and outstations, where the number of cut-outs, posters, banners, flags, etc., are on display in favour of one candidate or the other. Hosting of voters for lunches and dinners at hotels and official residences, are a daily occurrence. Where do the organisers get the funds to spend on campaigns in the various forms described above? Transparency International Sri Lanka has continuously exposed the enormous amount of money spent on various campaigns, advertisements and through the print and electronic media by the two main candidates. Where do these funds originate from to spend such a large sum of money? Of course, not from Party funds or from legitimate sources.

The Mass Media Minister speaking at a news conference recently stated that an Act known as the Election Campaign Fund Act should be enacted to investigate and ascertain how the funds are derived by the various political parties to spend on the election campaign.

Legislative bodies

The suggestion is laudable, but whether any further steps will be taken on this is the million-dollar question. Whatever legislative bodies such as the Constitutional Council, the Police Commission, the Public Services Commission, the Judicial Services Commission etc., which were in existence, have been overlooked and they seem to have died a natural death. With this experience, the public does not expect any legislation to be enacted to ascertain the source of income of the political parties who engage in political campaigns.

In respect of the offering of bribes of MP Muzzammil, though belatedly it is reported that he had lodged complaints with the Bribery Commission and the CID. It is for these Agencies to investigate the complaint thoroughly to lay their hands on the origin of the large sums of money which were offered to the MP and the person or persons who had this money to offer.

Unlawful activity

Interestingly, there is a Bill which was passed by the Government titled Prevention of Money Laundering. To quote from this Act Section 3(a) under the sub-heading ‘Offence of money laundering’.

“Any person who engages directly or indirectly in any transaction in relation to any property which is derived or realized, directly or indirectly, from any unlawful activity or from the proceeds of any unlawful activity.”

Large sum of money

Section 4 of this Act states: “For the purposes of any proceedings under this Act, it shall be deemed until the contrary is proved, that any movable or immovable property acquired by a person has been derived or realized directly or indirectly from any unlawful activity, or are the proceeds of any unlawful activity, if such property -

(a) Being money, cannot be or could not have been -

(i) Part of the known income or receipts of such person; or

(ii) Money to which his known income or receipts has or had been converted.”

Once the investigation establishes the person who possessed this large sum of money and offered it to MP Muzzammil, to cross over, such person should be answerable under these Sections to prove that this large sum of money was part of the known income or legally earned.

This Bill gives a wide range of powers for the Law Enforcement Officers to investigate, freeze Bank Accounts, confiscate Black Money and take the offenders before a Court of Law. To my recollection, one MP has already been taken before Courts under this Bill for having received a large sum of foreign exchange which was considered as money derived from illegal sources.

Bribery Act

The exposure by MP Muzzammil has opened widely the avenues for the Law Enforcement Officers to act under this particular Bill, under the Bribery Act, Income Tax Act and any other Act which could be used to ferret out the Black Money which is available in this country, which is being used for political campaigns, buying Members of Parliament, buying voters, engaging and paying underworld gangs to commit murder, assault, disruption and other illegal and violent activities to prevent the democratic process of having a fair and violence free election.

The responsible authorities should act swiftly to arrest the trend of laundering Black Money, seize such Black Money and convert it to the Government funds so that the people of this country could benefit.