Tigers' global fundraising and weapons-smuggling network

Matthew Rosenberg

He's known as KP, and he's exactly the kind of man you would imagine running a shadowy smuggling network that stretches from the beaches of northern Sri Lanka to the skyscrapers of New York.

With a medium build, a mustache, slight paunch and thinning hair, KP blends easily into the places where he buys weapons for Sri Lanka's Tigers, such as Thailand, Indonesia, Bulgaria and South Africa. He has dozens of passports - Indian, Egyptian, Malaysian, to name a few - and a steady hand for forging whatever paperwork he doesn't have, say Sri Lankan officials.

He is, said one Western diplomat, "like something out of a James Bond movie." For nearly two decades, KP has been the key player in a global network that links refugees and companies to weapons dealers and, ultimately, a Tiger army, according to extensive interviews with Sri Lankan officials, Western diplomats and former Tigers.

The Tigers' success in arming a 10,000-strong force has come into sharp focus in the past year with the resumption of full-scale conflict in Sri Lanka and a broadening investigation into alleged Tiger operatives in New York.

Considered pioneers in terrorism, the Tigers raise about US dollars 200 million (euro139 million) to US dollars 300 million (euro208 million) a year, mostly through extortion and fraud. They use front companies and middlemen to buy arms from legitimate weapons-makers in Europe and Asia.

Then they move the arms on their own ships back to Sri Lanka, where they are fighting to create a homeland for the Tamil minority.

The New York investigation offers a glimpse of the Tigers' methods and reach. More than a dozen suspects have been arrested for allegedly plotting to loot ATM machines and bribe U.S. officials to drop the Tigers from Washington's list of terror groups.

Authorities are also looking into the dealings of a Wall Street financier suspected of donating millions of dollars to the Tigers, say officials who spoke anonymously because the investigation is ongoing. He is identified only as "Individual B" in court papers and has not been arrested.

Another suspect arrested in Indonesia and later sent to New York was caught with a laptop that had spreadsheets detailing more than US dollars 13 million (euro9 million) in payments in the summer of 2006 for military equipment, including anti-aircraft guns and 100 tons of high explosives, court papers say. His passport showed more than 100 trips in the past five years to countries such as China, Kenya and even Sri Lanka.

International efforts were supposed to shut down such operations after the Sept. 11 attacks, but experts on terrorist financing say the Tigers' network has thrived in the past six years.

"After 9/11, the know-your-client principle was supposed to be integrated into the financial markets and into pretty much every business," said Shanaka Jayasekra, a terrorism expert at Macquarie University in Sydney, Australia. The Tigers are "showing what can be done to exploit the holes in this system."

Sri Lanka has stepped up its efforts to cut off supply lines in a conflict that has killed 70,000 people over the past 24 years. Its navy has sunk seven insurgent ships in the last year, and several Tiger operatives in the United States, Europe and Australia have been arrested.

But Sri Lanka's resources are limited, and Western countries are focused largely on al-Qaida and other Islamic groups targeting the West.

"If we find (Tiger operatives) breaking the law, of course we'll go after them," said one Western diplomat, who spoke anonymously to avoid upsetting Sri Lankan officials. "But we're not running around hunting for these guys."

Even some Islamic groups with ties to al-Qaida - such as Pakistan-based Lashkar-e-Tayyaba, blamed for bombings that have killed more than 300 people in India over the past two years - fly largely below the radar of the major Western powers, said Peter Chalk of the Rand Corp., a U.S. think tank.

"No one is paying a bloody bit of attention to any other group" apart from al-Qaida, especially one like the Tigers, whose fight is in a single, relatively poor country with little international clout, he said. These often-ignored groups "pose real threats," Chalk said.

The Tigers' network mirrors the sophistication of the mini-state they've built in northern Sri Lanka. There, they levy sales taxes - 10 percent on building materials, 7.5 percent on car parts, 20 percent on cigarettes - to support their own courts, traffic police and military, a cult-like force whose fighters don't drink or smoke, and who carry cyanide pills to swallow if they are captured.

Outside Sri Lanka, the Tigers' network relies heavily on the Tamil diaspora, which has swelled to between 600,000 and 800,000. They run the socio-economic gamut from doctors and bankers in upscale New Jersey suburbs to construction workers and cab drivers in London's gritty immigrant neighborhoods.

The diaspora has helped the Tigers set up front companies in more than a dozen countries, legitimately selling everything from dried fish in Thailand to mobile phones in Toronto. The Tigers provide seed money to start the businesses, which then return profits to the Tigers. They also use their small fleet of oceangoing ships and dozens of smaller vessels to haul lawful cargo for paying clients.

But the bulk of their money comes from large and lucrative communities of Tamils abroad - more than 200,000 in Canada, about 110,000 in Britain, others in Western Europe, Australia and the United States. Some donate willingly.

"Others have to be convinced," said a former Tiger who worked in London as a fundraiser.

The preferred method of persuasion, he said, is threats aimed either directly at the unwilling donor or at relatives back in Sri Lanka, which is "always the easiest because they knew we were the law at home."

If threats fail - "very rare" - then "maybe we would beat him. Or if he had a shop, we could smash it."

The former Tiger, who would not discuss why he left the group, spoke anonymously because he feared retribution and because it is a crime in Britain to raise money for a terrorist group. Reports from activists such as Human Rights Watch detail dozens of cases of Tamils in London and Toronto being forced to donate.

The Tigers prefer fundraisers who have never actually fought in Sri Lanka and therefore aren't on any watch lists. The former Tiger said the money was deposited in accounts under his own name at NatWest bank, and then transferred to an HSBC bank account, also in London. Where it went from there, he couldn't say.

It's a safe bet, though, that at least some of it ended up with KP and his team. In the early days, KP picked up weapons wherever he could - Afghanistan, the tribal areas of Pakistan, Cambodia, the weapons bazaars of the former Soviet Union.

As the network became more sophisticated, so did the purchases. In the mid-1990s, KP's team arranged for 70,000 mortar shells bought by the Sri Lankan Government from Zimbabwe Defense Industries to be diverted to the Tigers by allegedly bribing an Israeli subcontractor.

It was about this time that KP began using forged or illegally obtained documents to buy weapons from legitimate manufacturers - a strategy he still employs, as shown by purchases from China North Industries Corp. (Norinco), a state-run company.

According to former and current Sri Lankan intelligence officials, Norinco sold the Tigers two consignments of assault rifles, light artillery, rockets and ammunition, each large enough to fill a 230-foot (70-meter) cargo ship.

The purchases were arranged through a middleman as part of a larger order certified with North Korean end-user certificates - the documents needed to legally buy weapons - presumably obtained through bribery, the officials said. The consignments were loaded onto rebel-owned ships in September 2003 and October 2004 in Tianjin, China.

The weapons are then believed to have gone to a supply point along the Indian Ocean coast of either Thailand or Indonesia. From there they were loaded onto smaller ships for the trip across the Indian Ocean, and then into fishing boats to escape Sri Lanka's Navy and reach Tiger territory.

Senior Chinese officials were first warned of the purchases in July 2006, said a former Sri Lankan official who helped prepare a dossier laying out evidence for them.

But a third order remained on track to be delivered in spring 2007 until Sri Lankan President Mahinda Rajapaksa personally appealed to Chinese leaders in Beijing in February, the official said.

Two of the officials said the Chinese, who were described as extremely apologetic, have launched an investigation into the sales. At Norinco's parent company, China North Industries Group Corp., the director of the information office refused to comment. "We are not authorised to answer such very sensitive questions," the director, who gave his name as Jiang, said before hanging up.

In the last two years, KP is also thought to have arranged for arms from Bulgaria and North Korea, Sri Lankan officials say. So when news broke in early September that he had been caught in Thailand, the Sri Lankans were ecstatic. "It's almost too good to be true," gushed a senior official.

Thailand - where KP is widely believed to have ties to senior officials - hastily denied the arrest. And within days, Sri Lankan officials acknowledged he had again disappeared.

AP

Associated Press reporter Tom Hays in New York contributed to this story.