The flow of US $ 1.5 m (SL Rs. 167 m) to alleged agents of the LTTE through payments made to supply companies contracted by the Food and Agricultural Organization (FAO) of the United Nations, has been exposed, as payments to “ghost companies”. These monies were for farming and agricultural support in the North & East of Sri Lanka
A leaked UN email suggests that UN money went to LTTE. Last May, Colombo Telegraph exposed how United Nations funds were paid to three Sri Lankan companies which were physically not contactable. US$ 1.57 million (approximately RS 167,000,000.00 – valuation 2008) was paid to supply companies which the FAO could not contact, the Colombo Telegraph reported July 6.
The FAO in Sri Lanka purchased project deliveries for the Northern and Eastern Provinces of Sri Lanka to a value exceeding US$ 1.5 million from three suppliers, namely, Dev Trades, A. F. Associates and YCO Farm. These suppliers could not be found at their given registered addresses. Two FAO staff members Niranjala Gunaraj, Finance Assistant, and Thevarajah Vaigunthan, National Project Officer, both attached to the FAO Emergency Unit, collected the payments on behalf of these three companies.
The Colombo Telegraph report further states:
We asked the UN to publish the report of the investigation it claimed to have carried out. We wrote to the FAO Country Representative, Patrick Evans and Assistant FAO Representative (Administration), Dihan Hettige, asking what happened to the inquiry findings but they have so far failed to send us the investigation report.
Instead of making the report public Patrick Evans maintains “The issue has been thoroughly investigated and addressed in a proper manner.” Quoting The Rome-based UN FAO headquarters spokesperson The Italian Insider wrote; “corrective action was taken” as soon as the problem was brought to light.
We wrote, ‘’Interestingly, Patrick has never denied they paid US$ 1.57 million to “ghost” companies. We can categorically state that the UN FAO Country Representative is in a cover-up game’. We asked more questions form Patrick Evans in an open reply but UN FAO has so far failed to respond.
The issue was not addressed in a proper manner. Patrick says: 1. No money was stolen or lost, 2. All inputs were delivered to the beneficiaries and were of suitable quality,3. No crime was committed, 4. Transparent procurement procedures were not properly followed and 5. Immediate action was taken to correct the situation including removal of the staff member involved and publication of an article in the local newspapers informing the public of the same.
Let us examine these responses one by one;
He accepts transparent procurement procedures were not properly followed. Why did the UN FAO organization fail to follow transparent procurement procedures? This is in itself a crime. He says, ‘no money was stolen or lost’. When you purchase goods from “Ghost” companies where has the money gone? Today we can expose part of this corrupt deal. It shows where the money went. Bank details of one of these “ghost” companies, A. F. Associates shows that millions of rupees had been transferred to the personal accounts employees of the UNFAO.
Bank details showcasing transfers of monies from A.F Associates prove that millions of rupees were transferred to two employees’ personnel accounts. In 2008 September and October alone A.F Associates transferred Rs. 4.1 million to A. Sivanandan’s personnel account in Jaffna and C.R. Moses’s personnel account in Batticaloa.
Evans says, ‘all inputs were delivered to the beneficiaries and were of suitable quality’. How can “Ghost” companies deliver goods to beneficiaries? Where is the proof? Patrick’s own files which were obtained by us shows low quality inputs were delivered to the beneficiaries; effectively cheating Sri Lanka’s poor – the farmers – by supplying low quality seed and agricultural products.
An email dated October 1, 2008 from Benziger, from the FAO office in Trincomalee says; “I regret to inform you that there are long term pending issues with procurement system connected to inferior quality of inputs, in which we brought this issue to Colombo level is not at the first time now. Anyhow, it is very much worrying that such issues is keep on continuing in the FAO system and expanded to other UN agencies. ….Further we came to know that the price different is unreasonable and price difference were very high ( please check with Poultry purchase order).”
The point however is this. Patrick Evans says no crime was committed. Is purchasing from “Ghost” companies and paying for same not a fraud? Is fraud not a crime?
Evans also maintains that immediate action was taken to correct the situation including removal of the staff member involved and publication of an article in the local newspapers informing the public of the same. Patrick is again misleading the public. If there was no crime committed why was the staff member removed from the organization and his contract not renewed? Why was there a delay in the publishing of such notice in a local newspaper and informing the public of the same? If he was involved in a fraud, why was he not reported to the Police or CID in Sri Lanka?
Immediate action was not taken. According to UN files, whistleblowers within the organisation kept raising these irregularities from 2006 onwards, but no action was taken until the end of 2008. In 2008, an inquiry was initiated through the FAO Headquarters Audit Department, where three officials, namely, Ms. Maria Carbone, Ms. Georgina Costello and Mr. Dennis Richards came to Sri Lanka to conduct the inquiry.
On May 10, 2009 UN FAO placed an advertisement in the Sunday Observer business page with a photograph of Thevarajah Vaigunathan and said “This serves to inform the general public that Mr. Thevarajah Vaigunathan former National Project Officer of the Food and Agricultural Oraganisation (FAO) of the United Nations, is no longer employed by FAO, and FAO is not liable for any of his transactions/actions.”
So, is this enough? Was it only Vaigunathan who was involved in this fraud? Who are the others? Why did not the UN hand over the investigations to the police?
With FAO denying there was no crime committed, and with all the other staff both in the office and in the field intact how could the FAO have played a major role in supporting the re-settlement process in the north and east of Sri Lanka assisting returning IDPs to resume productive livelihoods? What is the assurance of the quality of the assistance provided and that there was no further fraud?
This issue is about accountability for the funds received for the development of Sri Lanka. Evans says, “the FAO continues to assist the Government to addressing priority needs in the agriculture, fisheries, livestock and forestry sectors.” Why was the Government not informed of the said fraud when it was clear that there were many staff members both local and foreign involved?
This is the level of UN transparency and accountability. This in fact undermines the UN’s system of independent investigations. We managed to find one reason why the UN FAO is covering up the whole corruption saga.
This week we can reveal another ‘Confidential’ email sent to FAO Country Representative, Patrick Evans by Assistant FAO Representative (Administration), Dihan Hettige. On October 4, 2008 Dihan Hettige wrote “We have confidentially checked with our personal contacts from the main commercial Banks to find that Mr. Thevarajah VAIGUNATHAN (National Identity Card No 723580277) in one of the 2 partners of M/S Dev Traders. All of the above establishments are formed after Vaigunathan was transferred to Colombo in 2006. On the whole apart from the tsunami rehabilitation, more than 1/3 of the total procurement has been done through this handful of suppliers mentioned above. As per the recent confidential information received the other companies are run by his family members/close relatives. As per our investigations these companies do not exist in reality. The phone numbers quoted are unanswered and the addresses quoted are bogus. When I had inquired about the suppliers sometime back, his reply was that the suppliers do not want to reveal their identity due to security reasons (including that the mentioned suppliers are directly connected to LTTE). I too have sufficient information to believe that Vaigunathan is directly connected to the LTTE, with his capabilities of operating in the LTTE controlled areas easily.”
“I believe if an investigation is sensed by him or the connected individuals, they might disappear suddenly and FAO might not be able to operate in the uncleared areas thereafter. Also not ruling out the danger of having the details exposed to the Government of Sri Lanka, which could bring long term bad reputation to FAO.”
The FAO Country Representative, Patrick Evans replied within two minutes; “Thanks Dihan, let’s keep this to ourselves for the present and consider our options. Patrick”
It is clear Assistant FAO Representative (Administration), Dihan Hettige, encouraged FAO headquarters to bury this incident. Was it only this LTTE connection or to protect FAO reputation? We can categorically say the FAO investigation team has not investigated the bank accounts of its employees and bank accounts of the “Ghost” companies. If you investigate those bank accounts you will definitely find that the money not only went to LTTE but to high profile employees as well.
(Courtesy – Colombo Telegraph)