HOW THE PIRA FINANCING WAS COUNTERED
Efforts to counter terrorists’ finances can be divided into kinetic and non-kinetic activities. The former include raids, arrests, operations, as well as the creation of the task forces necessary to conduct these activities. Non-kinetic activities include the passing of legislation, intelligence sharing, and multiagency cooperation. The British played up the lie that NORAID was the primary source of PIRA funding during the conflict. By doing so, this placed additional pressure on the United States to crack down on the group, which many politicians were reluctant to do since the PIRA never attacked the United States and the Irish lobby remained a powerful force in American domestic politics.90 Over time, British propaganda grew more successful, as Washington rarely criticized official British policy.91 In 1977, the British convinced four well-known Irish-American politicians to publicly condemn support for the PIRA.92
Although Irish militants had enjoyed sanctuary in the United States since the time of America’s Civil War, the situation began to change in the late 1970s and early 1980s, as British Prime Minister Margaret Thatcher pressured U.S. President Ronald Reagan to clamp down on PIRA fund-raising and political activity throughout the United States.93 Prior to Thatcher’s persistence, the PIRA enjoyed unfettered access to politicians, influential business leaders, and other powerbrokers who sympathized with its cause. The other major change over the conflict’s duration was the priorities and competence of the Irish and British security forces. In the early 1970s, following British policies like internment, the Irish police were not likely to interfere with the insurgents. “As sympathy for their cause in the Republic exploded, IRA fugitives could now find sanctuary across the Border, safe in the knowledge that the Gardaí would not throw them behind bars,” recalls Moloney.94 But over time, the PIRA’s brutality earned its members no favor among the Gardaí, whose colleagues (Catholics, just like PIRA insurgents) had been injured or killed while attempting to apprehend insurgents operating or hiding in the ROI. After years of dealing with PIRA militants using the country as a safe haven, the Gardaí eventually grew to become a quite effective security force. The Irish police even collaborated with British authorities to disrupt ongoing PIRA plots, planned operations, and future activities.
Kinetic Activities
A turning point in the countering of PIRA fund-raising came following the assassination of Lord Mountbatten by the PIRA in 1979. After his death, the FBI changed their neutralist policy and, moving forward, agreed to cooperate with British intelligence to act on information provided Provo activity.95 Several years later, following the bombing of the Grand Hotel in Brighton in 1984, the security forces increased efforts to gather intelligence on the PIRA by commissioning the Terrorist Intelligence Gathering Evaluation and Review committee (TIGER).96
In 1985, the British government commissioned a review of threat finance, designated as the House of Commons Select Committee Report. This report followed a review from the previous year by Sir Derek Hodgson, who was looking into the recovery of profits from crime. For the first decade of the conflict, Inland Revenue was the organization primarily tasked with investigating fraud before it became apparent that these types of investigations required a multiagency approach to be successful.97 Inland Revenue was not without its successes—over a five year period in the mid-1980s, nearly 100 people were convicted of fraud in excess of 13 million pounds—but its experience with terrorist fraud was primarily on frauds on building sites involving tax-exemption certificates. To effectively counter insurgent financing the British needed to create a specialized unit.
The C13 Anti-Racketeering Squad was first established in 1982 by the Royal Ulster Constabulary (RUC), although the initial force was comprised of merely 20 officers. The unit was given more prominence when Hugh Annesley became Chief Constable of the RUC and Tom King became Secretary of State for Northern Ireland. The C13 sought to turn those who were convicted of racketeering against their respective organizations, thus trading a reduced sentence or freedom from prosecution in return for intelligence on the insurgents. The Special Branch and the Anti-Terrorist Branch already dealt with aspects of the fight against terrorism, but C13 was the first unit created to specifically track the funding of terrorist groups.98 By 1992, this outfit forced the closure of 54 republican drinking clubs and by the end of 1993, more than 400 people had been prosecuted for offenses totaling over 50 million pounds.
Resources increased as threat finance was recognized as a critical piece of the insurgency and the counterinsurgents were successful in arresting and prosecuting both Republican and Loyalist terrorists. There have been previous successful operations against the PIRA, including an FBI sting operation dubbed “Operation Bushmill,” which targeted an arms trafficking ring operating from North Carolina as well as Operation Hit and Win, but operations conducted by the RUC in the early 1990s were equally impressive.99 Operation Whiplash was launched in 1990 by the RUC and aimed at racketeering targets in Belfast. Two years later the RUC carried out Operation Christo, an operation that attacked PIRA financing activities in the border area.100
Non-kinetic Activities
Kinetic activities further enable non-kinetic activities and vice versa. In February 1985, the government in Dublin passed special legislation that seized over $3 million held in a Bank of Ireland bank account. The money was originally deposited by Associated British Foods after being transferred from a Swiss bank account to an account in New York City, opened by a man using a false passport. Once withdrawn from the account in New York, the money was deposited in the Navan branch of the Bank of Ireland in the Irish Republic. This all originated from a series of PIRA kidnappings and bombings.101
The Prevention of Terrorism Act (Temporary Provisions Act) of 1989 was enacted by the government of Northern Ireland to counter terrorist abuse of security companies by tightening the regulatory framework.102 The act also gave the government the power to license security companies and check employee history for membership or involvement with terrorist groups, which was popular with both private security industry employers and the unions. Licenses could be denied to or revoked from security companies that employed known terrorists.103
The other major task force established to counter threat finance in Northern Ireland was the Terrorist Finance Unit (TFU), which was housed within the Northern Ireland Office and comprised of financial and research experts intended to complement the RUC’s Anti-Racketeering Squad. The TFU was able to overcome jurisdiction restraints placed on the RUC in areas of VAT, Income Tax, and Social Security Fraud. The TFU was a coordinating interagency model of policing, as it collaborated with personnel from other agencies, including policemen, customs officers, accountants, and Inland Revenue investigators.104 According to Norman, “the predominantly reactive orientation of fraud and financial investigations has been displaced by a political will to target proactively this form of offending in gathering information and intelligence using the wide-ranging powers of the Authorised Investigators.”105 In addition to the TFU, the United Kingdom also set up the Joint Action Group on Organized Crime of the Metropolitan Police. This was a complex coordinating structure established in November 1992, shortly after the creation of the U.K.’s National Criminal Intelligence Service. In all, 25 agencies agreed to collaborate to counter organized crime as part of the Joint Action Group.
CONCLUSION
In 1998, the insurgency in Northern Ireland officially came to an end with the signing of the Good Friday Agreement. This historical agreement was the culmination of 30 years of conflict in Northern Ireland. Thirteen years after the signing of this historic peace deal, all parties to the conflict have remained focused on politics, as a lasting peace has settled in throughout the country, pockmarked with only episodic acts of violence practiced by fringe groups and criminals.106 The Provisional Irish Republican Army laid down its arms and stepped aside for Sinn Fein, completing a process that had begun years earlier.
By the late 1980s and early 1990s, the
operational tools most important to PIRA success on the battlefield had all been blunted to one degree or another. Both the American and Irish governments cracked down on allowing PIRA insurgents to use their countries as a safe haven. Insurgent freedom of movement in the United States and the Republic of Ireland were severely constrained. With a restricted sanctuary, the group could no longer train its members the way it had before, which contributed to shoddy operational execution. Finally, by the latter stages of the conflict, Irish-America had been persuaded to cease funding the hard-line elements of the group bent on continued violence. Manpower and resources were now almost completely shifted to Sinn Fein, and those who wanted to be seen as supporting the “good fight” would follow suit.
CHAPTER 3
The Liberation Tigers of Tamil Eelam (LTTE): A Diversified Funding Portfolio
BACKGROUND
British Ceylon gained independence in 1948 and has been known as Sri Lanka since 1972. Sri Lanka has a population of 20 million people, the majority of whom are ethnic Sinhalese (74 percent). Another 18 percent of the population is Sri Lankan Tamil (6 percent of whom are Upcountry or “Estate Tamils”) who are primarily Hindu, while another 7 percent are Tamil Muslims. The remaining population, less than 1 percent, is comprised of small numbers of Sinhala Christians, Anglo-Sri Lankans, and descendants of European settlers.1 The conflict between Sinhalese Buddhists and Tamil Hindus initially stemmed from differences in tradition, heritage, language, religion, and color and the fact that Sri Lankan Tamils were highly educated and thus represented disproportionately in commerce, professional opportunities, and government service. Due largely to their superior numbers, the Sinhalese were politically more powerful than the Tamils and beginning in the 1950s, began to discriminate against Tamils in areas including education, religion, and language. K. M. de Silva, a Sri Lankan historian, observes, “the Sinhala have sometimes thought of themselves as a chosen people with a providential mission, who are for that reason entitled to cultural, linguistic, and political supremacy in Sri Lanka.”2 This discrimination was accompanied by a rise in Sinhala nationalism, which grew stronger even as Tamil leverage was further reduced. Four main factors can be traced to the rise of Sinhala Buddhist nationalism in Sri Lanka following independence in 1948: a backlash against British colonialism, the material conditions associated with nationalism (these included communication, transportation, industrial production, mass markets and mass politics, general systems of public educations, and a Weberian bureaucratic component with administrative structures designed to support standardized mass society),3 perceptions of an antiquated and inequitable distribution of resources and positions (especially in the government), and a desire to exercise majoritarian rule with all the benefits this type of government afforded.4
The Tamil insurgency began in earnest when violence erupted in northern Sri Lanka in the early 1970s. Several Jaffna politicians were targeted for assassination and in 1974 a common criminal by the name of Chetti Thanabalasingam founded the Tamil New Tigers (TNT).5 To counter intimidation of the Tamil minority in a highly polarized society, the Tamil United Liberation Front (TULF) emerged in 1976 amidst calls for a separate Tamil state. Two years later, a small group of hardcore Tamils broke off from TULF to form a separate Tamil organization—the LTTE were born.6
HOW LTTE FUNDED ITS ACTIVITIES
Finance sustains an insurgent group and offers a sense of hope, even when insurgents may not be winning on the battlefield. The LTTE had a limited capacity to raise funds internally in Sri Lanka, so the diaspora movement took on added significance. Different people surely donated for different reasons—shared ethnicity, religious fervor, genuine sympathy, coercion. Some donated very small amounts, while others donated hundreds of thousands of dollars. The LTTE collected donations from co-ethnics in Canada, France, Australia, Norway, the United Kingdom, and Switzerland, reflecting both the high concentration of Tamils in those countries as well as the lack of specific legislation outlawing the group from fund-raising.7 In all, Peter Chalk estimates that an astonishing 80 to 90 percent of the LTTE’s “war chest” originated abroad.8
Gray Economy
The gray economy enabled the Tigers to engage in a range of kinetic and non-kinetic activities. Money donated from abroad or earned through legally-owned Tamil businesses was used for more than just purchasing arms. Through its vast financial architecture, the LTTE was able to pay for the exorbitant legal fees of the group and its members. One example is especially revealing. According to Chalk, following the 1995 arrest of the LTTE’s representative to Canada, Manicavasagam Suresh, the group organized demonstrations and a mass mail-out campaign that portrayed Suresh as a victim and accused the authorities of persecuting the Canadian Tamil population. Moreover, the group hired two highly paid lawyers to defend Suresh, including New York-based Viswanathan Ruthirakumaran (who happened to be the head of LTTE operations in the United States).9 When the group was designated as a terrorist organization by the United States in the late 1990s, Ruthirakumaran hired a leading U.S. law firm headed by Ramsey Clark, the former Attorney General during the Johnson administration.
Diaspora Support
Each year the LTTE generated between $24 and $36 million in revenue. According to Chalk’s estimates, the group reaped $800,000 a month from Canada, $500,000 a month from Scandinavia, just shy of $400,000 a month from the United Kingdom, $250,000 from Australia, and another $200,000 from the United States.10 Following the ethnic riots of 1983, thousands of Tamil refugees fled overseas to India, Australia, Canada, and the United Kingdom.11 This sowed the seeds for the Tamil diaspora and the transnational nature of the LTTE’s insurgency. The global diaspora was a major part of the organization’s fund-raising and propaganda network. But the Tamil Nadu sanctuary was the heartbeat of the LTTE’s military infrastructure. Insurgents connected with insurgents, but also formed bonds with elements of the Tamil Nadu political class, including with political groups such as the Dravida Munnetra Kazhagam, the Kamaraj Congress, and the Pure Tamil Movement.12 These political ties would prove extremely valuable over the course of the insurgency.
Charities
Organizations like the Tamil Relief Organization (TRO) remained closely linked with the Tigers and were described as a veritable humanitarian arm of the LTTE.13 This link grew stronger following the 2005 tsunami.14 The LTTE essentially controlled where and how NGOs operated, and then used its provision of services to enact support and even recruit. Moreover, the group used a steering committee to direct aid from Colombo, in effect claiming goodwill for services provided by the state. While the LTTE did rely on charities to provide financing, the group also co-opted charitable organizations and NGOs to supply its members with a veneer of legitimacy in areas where these nonprofits operated. As they solidified control over the northern and eastern Tamil-dominated provinces of Sri Lanka, the LTTE needed to use its resources to provide for its constituents. As the conflict wore on and the Sri Lankan government became more adept at countering the group’s funding streams, it increasingly turned to more predatory measures like extortion and coercion. In December 2009, three individuals in Australia with links to the LTTE pleaded guilty to the collection and transfer of over $1 million to a proscribed terrorist organization.15
Fraud
Although drug trafficking and human smuggling are two of the more well-known organized criminal activities perpetrated by the LTTE, the group also relied on various types of fraud (credit card, social security, immigration, bank, casino, etc.) to bankroll its operations.16 Indeed, in 1999, the Royal Canadian Mounted Police reported that Tamil street gangs operating in Toronto were sending the proceeds from bank and casino fraud back to the organization’s leaders in Sri Lanka. In addition to perpetrating criminal activities in Canada, the LTTE also became proficient at credit card fraud in Great Britain and social security fraud in France.17
Legal Businesses
While the LTTE did raise money through a range of organized criminal activities, much of the money
donated by the Tamil diaspora was used for the creation of legitimate Tamil businesses. Beginning in 1983, the LTTE opened up restaurants in Tamil Nadu and Paris, France and eventually branched out to London, Toronto, and Cambodia.18 The Tigers’ brain trust also thought it wise to invest in stock and money markets. The group also maintained an impressive real estate portfolio. This entrepreneurial spirit extends to the sale of newspapers, videos, and Asian spices. Members and activists invested in travel agencies, grocery stores, printing presses, money exchange and transfer agencies and import-export firms.19 The group diversified its asset base from agriculture to finance, invested in a number of farms, started finance companies, and constantly sought out other high-profit venues.20 When donations were supplied to the LTTE the group used them as seed money to start and grow businesses, from telephone services to community radio stations. Tamils have historically been linked to commodity buying and selling, especially gold, so the LTTE aggressively entered this market too.
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