posted June 03, 2002 06:12 PM            

Stewart Bell
National Post

Anuruddha Lokuhapurarachchi, Reuters

A Tamil Tiger suicide squad set off a truck bomb at the fabled Buddhist Temple of Tooth in Kandy, Sri Lanka, in 1998, killing a dozen people. The Canadian Security Intelligence Service estimates $2-million a year is funnelled to the Tigers from Canada.

Dave Chan, National Post

Sri Lankan immigrants in Canada gathered on Parliament Hill in June, 2000, to protest Ottawa's lack of action against Tamil Tiger extremists operating here.

The World Tamil Movement, the main Tamil Tigers support group, holds a fundraiser at a Toronto school.

(Stewart Bell)

Each year, millions of dollars are funnelled from Canada through front organizations to terrorist groups throughout the world, such as the Tamil Tigers. In this exclusive excerpt from a new book of essays about Canada's declining international influence, National Post reporter Stewart Bell examines how these deadly funds are raised and distributed.

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With its stately colonial buildings, ancient temples and lush tropical gardens, Colombo seems an Earthly paradise at first look. But the scars of two decades of ethnic conflict are not easily concealed. In the downtown business district, the skeletons of bombed office buildings line the streets near the Indian Ocean -- memorials to the wave of terrorist attacks that have struck the city.

Although far from the front lines of Sri Lanka's civil war, Colombo still has the uneasy feel of a city under siege. Military checkpoints slow traffic at intersections, armed soldiers hang from buses to prevent terrorists from planting bombs and government buildings are guarded like fortresses, as are the homes of prominent politicians.

Concrete patches cover the corner of the Hotel Galidari that was bombed in 1997 by Tamil Tiger separatists targeting the U.S. servicemen staying there. Outside the Prime Minister's house, there is a crevice gouged in the wall where a Tiger operative detonated his suicide vest. Across the street, a black statue marks the spot where the Security Minister was standing when he was blown apart by a suicide bomber.

The grass is scorched brown on the lawn where President Chandrika Kumaratunga was giving an election speech in December, 1999, when a Tiger suicide bomber made an attempt on her life. "Let's pray," says Rafeeq, a Colombo banker blinded in a 1997 terrorist attack on his downtown office building, "that these types of things will come to an end."

Colombo is the capital of a Commonwealth democracy that has experienced a level of terrorism unimaginable to outsiders. It is also the most striking example of how terrorism and insurgency around the world is financed from Canada. Extremists within Canadian immigrant and refugee communities send millions of dollars abroad annually to bankroll political and religious violence, and despite warnings by police and intelligence agents, federal politicians in Ottawa largely ignored the problem for more than a decade.

Fundraising for terrorism was not outlawed in Canada until public outrage at the Sept. 11 attacks and pressure from the Americans finally forced the government into action.

The legislation came so late, however, that Canada had already become among the top sources of foreign currency for such groups as the Tamil Tigers.

The Liberation Tigers of Tamil Eelam, or LTTE, is a cult-like band of guerrillas that employs the gruesome tactics of terrorism. According to Canadian security agencies, the LTTE has assassinated more than 100 politicians, carried out more suicide bombings than all other militant groups in the world combined, and murdered the democratically- elected leaders of two nations, India and Sri Lanka.

It is also, to a large extent, tacitly aided and financed by supporters in Canada. The Canadian Security Intelligence Service estimates that up to $2-million a year is clandestinely funnelled to the Tigers' military purchasing arm from front organizations in Canada. But the total amount could be 10 to 20 times that sum once the proceeds of organized crime are factored in.

Since the days of Lester B. Pearson, Canadians have liked to think of themselves as international peacekeepers, the heroes in the blue berets. In Sri Lanka, and in countries such as Israel and even the United States, Canada is seen increasingly as a war financier, supplying the cash and other support that sustains political and religious violence, keeping self-styled freedom fighters outfitted with weaponry and ensuring a continued surfeit of misery for civilians and the soldiers alike.

Through negligence and indifference, the Canadian government has permitted virtually every major terrorist organization in the world to operate within its borders. Canada's failure to disrupt the terrorists on its soil has resulted in major security problems for Canada's neighbours and some of its closest allies.

Canadian-based terrorists have been arrested in the United States, Britain, France, Jordan, Algeria, Pakistan, Azerbaijan and other nations.

Canada's failure has also caused severe troubles within Canada's refugee communities, where militants have hijacked cultural organizations and religious institutions for their own ends. And it has helped create an international climate in which global terrorist organizations such as al-Qaeda have thrived.

Canada may not be the only nation that has been negligent on this front, but for a country its size, Canada harbours far more terrorists than it should, possibly more in proportion than any other Western industrial power. As a result, even as it has sought to portray itself as tough on terrorism, Canada's international reputation has suffered because it is seen increasingly as a source of terrorism.

While federal politicians including Jean Chrétien, the Prime Minister, continue to deny that Canada is a terrorist "safe haven," the problem is spelled out in stacks of Federal Court case files, immigration and refugee files, CSIS reports, RCMP intelligence briefs, Security Intelligence Review Committee reports and records from criminal prosecutions in other jurisdictions, notably France and the United States.

Perhaps most convincing are the admissions of terrorists themselves, who have confessed not only to using Canada as a base for violence abroad, but also to plotting attacks within Canada. When these fragments of intelligence are pieced together, they form a window into the terrorist underworld that operates within the country.

Terrorist groups use Canada as a staging ground to plan and carry out attacks, as a base for hiding out before and after operations and as a source of recruits. Most common in Canada are terrorist-bureaucrats, those involved in support activity, mundane but nonetheless crucial, who feed the larger international organization. That includes the theft and doctoring of passports, purchase of matériel with military applications, spreading of propaganda, political lobbying and pressure and, particularly, fundraising.

Terrorist fundraising is conducted partly through non-profit organizations that purport to be involved in various types of humanitarian or community work but that in practice serve as fronts for extremist groups. In some cases, these organizations may be involved in legitimate work that masks their clandestine support for extremist violence.

Less often, the broader organization may be unaware that it is being used as a cover for illicit activities. Relief organizations, religious institutions, immigrant and multicultural groups and religious schools have fronted for terrorism in Canada, as have businesses. Some have been funded by various levels of government.

Outside the extremist core, mainstream supporters of these fronts may have no idea the money they are donating -- or a portion of it, at least -- is being diverted to finance political or religious violence. The extremists convince their supporters that the money is going to widows and orphans, or other worthy causes. While some, if not most, of the collections may in fact end up financing legitimate work, a portion is tacitly laundered into violence. Such blending of accounts is a deliberate tactic designed to throw investigators off the scent of blood money.

In Canada, the first to make proficient use of fronts were Sikh militants in British Columbia, who took control of temples and community organizations in the 1980s and used them as a pulpit to advance the cause of Khalistan, the sought-after Sikh homeland in India. Their methods were soon mirrored by Kurdish separatists, supporters of Palestinian militancy and Islamic holy warriors, including followers of Osama bin Laden, as well as Tamil extremists from Sri Lanka.

The World Tamil Movement (WTM) office in Toronto occupies the second floor of a strip mall, overlooking a row of shops selling South Asian wares -- jewellery, saris, fish and meat. The red and yellow banner draped in the window bears a distinctive emblem: the head of a roaring tiger. The LTTE logo is the only outward hint the office is affiliated with ethnic violence half a world away.

The WTM is the principal Tamil Tigers support organization in the world as well as in Canada. A secret list of "LTTE front organizations in Canada" compiled by the Canadian intelligence service lists the WTM at the top, along with the Ellesmere Road address of the strip mall, as well as seven other non-profit associations in Toronto, Ottawa, Montreal and Vancouver: The Tamil Eelam Society of Canada, Tamil Rehabilitation Organization, Federation of Associations of Canadian Tamils, Tamil Coordinating Committee, Eelam Tamil Association of British Columbia, World Tamil Movement (Montreal chapter) and the Eelam Tamil Association of Quebec.

The LTTE operates a taxation system in Canada that extorts money from Tamil families and businesses. The RCMP reported in 1999 that "new Tamil refugees in Canada are traditionally contacted by Tamil Tigers from organizations [that] promote LTTE interests and collect funds. LTTE sympathizers in Canada are under pressure to provide funding to the Tigers in Sri Lanka. All Tamils are encouraged to donate 50¢ each day to the LTTE."

While terrorists often rely on rallies and charity events to raise money, legitimate businesses have played an increasingly important role in fundraising. According to Canadian intelligence, the LTTE's chief procurement officer established two import-export companies in Toronto to launder money raised by the World Tamil Movement and other fronts back to his base in Thailand. "Although there are no official profit figures available for these companies there is some indication that they are highly lucrative and the LTTE is becoming increasingly dependent on these types of ventures to supply their war coffers," CSIS says.

The LTTE global fundraising and weapons network is so successful that there are fears it could become a template for other terrorist and insurgent forces. What is unique about the Tigers is that, by behaving, in turn, like an international corporation and an organized crime syndicate, they have been able to build a frighteningly potent fighting machine. And they have done so almost completely on their own, without the assistance of a benevolent state sponsor. Hezbollah has Iran to keep it armed, al-Qaeda had Pakistan and Osama bin Laden. Aside from some initial assistance from India, the Tigers have done it alone, and if they can do it from the relative isolation of northern Sri Lanka, so can any other extremist organization determined to cause mayhem.

The Canadian system has played right into the hands of such political extremists. Migrants can be remarkably vulnerable when they first arrive in a new country. They are disoriented, unfamiliar with the way things work. The government directs them to heavily politicized immigrant societies that have agendas that extend well beyond their mandate to provide language services and foreign aid. The bulk of these non-profit organizations are ethnic-based, serving one particular migrant group, and as a result have been vulnerable to being taken over by those with political agendas originating in their homelands.

As Western countries have begun to crack down on terrorist- front fundraising activities, realizing they are the lifeblood of terrorism, extremists have increasingly turned to organized crime to earn their blood money and launder it overseas. Police are now finding that organized crime investigations lead more and more to associates of terrorist groups rather than mobsters or bikers.

In June, 1998, the Sûreté du Québec, Canada Customs and the RCMP conducted a series of raids as part of an investigation into auto theft in Ontario and Quebec. What they uncovered was a Lebanese-based crime ring in Quebec that was stealing luxury cars in Montreal, Ottawa, Toronto and Halifax and exporting them to Russia, Western Europe Africa and the Middle East, where they were sold for about US$40,000.

"It appears that 10% of the profits of this organization were funnelled to a terrorist organization," the RCMP said in an intelligence report called Project Sparkplug. The terrorist group in question was not named, but subsequent RCMP documentation suggests the money was going to the Lebanese Hezbollah. Indeed, high-ranking Hezbollah members are said to travel in luxury cars such as Lincoln Navigators stolen in Canada.

The Ahmed Ressam case also showed the tendency of terrorists to support their operations with the proceeds of organized crime. Shortly after arriving in Canada as a refugee claimant, Ressam and other members of his Montreal-based cell began stealing. At first it was petty theft; Ressam worked as a pickpocket at department stores, targeting elderly women. Later, he would hang out at airports and steal baggage.

By the late 1990s, the Montreal cell was engaged in full-scale organized crime, operating a ring that would steal cellular telephones and laptop computers from the downtown business district, and that also extorted from Muslims outside mosques. The crime cell was headed by Karim Said Atmani, a mujahedeen fighter who fought in the Afghan and Bosnian wars. He was the "right-hand" of Fateh Kamel, a Canadian citizen believed to be a major player in the international Islamic terrorist movement.

Crime proceeds are a crucial source of funds for the Tamil Tigers. Street gangs composed of former rebel fighters serve as enforcers for the LTTE in Toronto. In the 1990s, Toronto police began noticing they were getting called increasingly to investigate violent crimes in which the common denominator was that both the victims and the criminals were of Sri Lankan origin.

They suspected a new organized crime group was emerging, bringing with it the same problems they had encountered when Asian-based crime first came to Canada in the 1980s. Motives, witnesses and suspects were elusive and language and cultural barriers were frustrating investigators. In response, the Tamil Task Force was established, at first as a pilot project but then as a regular part of the police intelligence unit, working closely with the RCMP and Citizenship Immigration Canada.

The task force soon discovered that Sri Lankan organized crime had its roots in South Asia. The key players, rival gangs called the VVT and A.K. Kannan, were aligned with warring Tamil factions back in Sri Lanka. A.K. Kannan, which has an estimated 300 members, derives its name from the AK-47 military assault rifle, the preferred weapon of Tamil guerrillas.

A.K. Kannan's main rival is the VVT, short for Valvedditurai, the birthplace of the Tigers movement as well as its leader, Vellupillai Prabhakaran. The VVT is the principal pro-LTTE gang in Canada, with a strength of 350 to 500. The gang leaders are current or former Tiger guerrillas and remain loyal to the rebels, serving as their money-collectors and street muscle in Tamil neighbourhoods of Toronto.

"Members of the VVT will act as enforcers for the political representatives of the LTTE in Canada," the Tamil Task Force said in its February, 1998, report. "Extensive links and associations between the VVT and LTTE are common knowledge in the Tamil community." The officer in charge of the RCMP's Immigration and Passport section in Milton, Ont., said the "Tamil Tigers control every aspect of Tamil gang life in Toronto."

In addition to the two main gangs, there are a number of smaller ones. RCMP Sergeant Fred Bowen alone has referred more than 200 Tamil gang members to the Immigration Department for deportation. All told, there are an estimated 1,000 gang members. Toronto police and the RCMP estimate there are from 5,000 to 8,000 trained Tamil guerrillas in Toronto. "These persons are known to have had extensive paramilitary training in the use of automatic weapons, hand-to-hand combat, Russian RPGs (rocket-propelled grenades) and other offensive weapons and substances," the Task Force said. "Many of these have been used in the Greater Toronto Area to carry out their projects."

The gang extortion racket in Canada, in which pro-LTTE crime groups collect "donations," is imported from the homeland, where the Tigers initiated a taxation system on families, businesses and criminal enterprise in the areas under their control. Tamils in Toronto often complain about gang youths who go door-to-door at night collecting money, often with threats.

Aside from extortion, the Canadian gangs have been involved in home invasions, kidnapping, attempted murder, passport theft, counterfeiting, fraud, auto theft and murders. The gangs take turns attacking each other's hangouts in drive-by shootings, usually using sawed-off shotguns, a deadly turf war that has turned parts of Toronto into a shooting gallery.

Police have had poor success tackling the gangs. The gangs respect what one officer describes as a "bond of silence," a tacit agreement that neither side will go to police if they are victimized. As a result, gang members are charged but seldom convicted. Non-gang members are also unwilling to come forward or testify as witnesses. Those that do are often threatened.

Tamils in Toronto are told explicitly not to go to police to report crimes because doing so might hurt the cause of Tamil separatism, both politically and financially, and could result in the withdrawal of government funds to non-profit organizations, the RCMP says. One gang circulated a flyer in the Tamil language offering a reward to anyone who could help locate Crown witnesses.

On the few occasions witnesses have testified against gang members, other gangsters have sat in the courtroom holding up photos of the witnesses' children and elderly relatives. "Many of the Tamils in the Greater Toronto Area live in fear of the gangs and the various extremist groups residing in their communities and few will testify or complain to the police," says an RCMP report.

This silence in the name of self-preservation is a trait imported from Sri Lanka, where Tamils dare not speak up for fear of retribution from the LTTE. The gangs, particularly the VVT, have served to keep a lid on community opposition to the LTTE and its front activities in Canada. The Tigers want to keep the appearance that Tamils are united in their support for the Eelam separatist struggle.

But like any ethnic group, Sri Lankan Tamils are divided over such issues as independence and the use of violence. The threat of gang violence, however, has succeeded in silencing dissent. The other role of the gangs has been, of course, to raise money for the cause. The consistent pattern of Tamil gang activity has been its unflinching devotion to money-making schemes. "The gangs are doing anything for money," Sgt. Bowen said.

One of their most-shocking money-making schemes surfaced in May, 2001, when the Ontario Labour Relations Board revealed that two VVT members with criminal records had been hired by a metal works company shortly before its 90 employees were to vote on whether to form a union. Gang members known as Kuti and Kodi began working at the company, which makes steel doors and frames, on Nov. 6, 1998, the day the union filed notice it was holding a certification vote. The two gangsters threatened to kill employees if the union vote was successful.

"If the company wins, no problem," Kuti told one worker. "If the company loses, you will not live thereafter. You will not be alive. Tell the others also."

"You don't know me," he went on. "I will do what I've said."

"If the union wins you, will be killed outside. We won't do anything now, but if the union wins we will do it."

Following a complaint by the United Steelworkers of America, the Labour Relations Board did not determine who was responsible for the "brief campaign of terror" but said "at the end of the day it does not particularly matter who specifically in management was involved. What matters, and what I think is obvious from the evidence, is that Kuti and Kodi were recruited by the company's management to discourage the Sri Lankan employees from voting for the union."

The LTTE's willingness to engage in union-busting shows that terrorist-affiliated gangs are a threat not only to the democratic institutions of Sri Lanka, but also those of Canada. When terrorist extremists become guns for hire, renting their reputations and ruthless tactics to the highest bidder, that constitutes a startling attack on democracy.

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A few days after suicide terrorists rammed loaded passenger planes into the World Trade Center, Jean Chrétien stood in the House of Commons to make a remarkable statement. "I am not aware at this time," the Prime Minister said, "of a cell known to the police to be operating in Canada with the intention of carrying out terrorism in Canada or elsewhere."

It was a confounding pronouncement because Canada's intelligence, police and immigration services had been warning the government for years that the world's major terrorist groups had all established offshore bases in Canadian cities, and that they were using Canada as a staging ground for political and religious violence around the world.

In addition to whatever top secret reports and memos had circulated in Ottawa with this message, the Canadian Security Intelligence Service had since the fall of 1998 posted several public reports on its Web site warning that terrorists were setting up shop in the country.

The warnings were explicit, and increasingly poignant. The CSIS director testified before a Senate sub-committee that "terrorist groups are present here whose origins lie in virtually every significant regional, ethnic and nationalist conflict there is." By July, 2001, CSIS was advising that the threat of a terrorist attack involving Canadians had never been greater, and that radical Islamic groups were a particular concern -- a warning that would come to fruition barely two months later in New York. And then there was the Ressam case, and the arrest of his Canadian cell mates who had plotted to bomb a Jewish neighbourhood in Montreal, which supplied ample evidence of the threat posed by Canadian-based terrorist and support cells.

During the 18 months preceding the Sept. 11 attacks, the Prime Minister was asked again and again in Question Period why his government was not addressing the threat of terrorism. In their responses, Liberal ministers evaded substance and feigned outrage, branding the opposition racist, anti-Canadian and anti-immigrant.

Not once did the government acknowledge what its own counter-terrorism agents were saying in publicly available documents: That the country had been infiltrated by the world's most violent organizations. Anyone who reads newspapers could come up with the names of at least a dozen suspected members of the bin Laden organization who have operated out of Canada. Mr. Chrétien and his government, it seems, were the only ones who were not aware. The federal counter-terrorism policy was, it seems, official denial.

The Liberals have sought to politicize the issue of national security for their own electoral gain. Liberal strategists seem to have concluded that national security measures could be perceived as immigrant bashing, costing them the support of ethnic communities. By painting opposition calls for anti-terrorism measures as motivated by racism, the Liberals hoped to capitalize, securing their lock on major urban ridings with large concentrations of immigrants.

To make matters worse, some Liberal MPs openly support groups such as the Tamil Tigers. Liberal MP Jim Karygiannis has attended Tamil Tigers support functions. Paul Martin and Maria Minna were guest speakers at a May, 2000, dinner hosted by the Federation of Associations of Canadian Tamils, despite warnings the group was a front for the Tigers. Citizenship Immigration Canada gives $2-million annually to the Tamil Eelam society, which CSIS considers a terrorist front. When the deputy minister of Immigration tried to cut off the group's government financing in 1997, she was overruled by Lucienne Robillard, then minister of Immigration. "We are to forget everything," an Immigration official later advised colleagues.

"I do not believe that Canadians want their country to be known as a place from which terrorist acts elsewhere are funded or fomented," Ward Elcock, director of CSIS, testified in 1998. "We cannot ever become known as some R and R facility for terrorists. In other words, and I will be as blunt as I can be, we cannot become, through inaction or otherwise, what might be called an unofficial state sponsor of terrorism." But one might argue that Canada, through its longstanding parliamentary inaction, has already become an unofficial terrorism sponsor.

Public outrage over the Sept. 11 attacks and lobbying by Washington forced the government to at last pass anti-terrorism legislation banning fundraising and outlawing violence committed in the furtherance of religion and politics. But why did it take so long? The United States did so in 1996, Britain in 2000.

These laws did not prevent the attacks in New York and Washington, but they may well have prevented others. At least the United States and Britain acknowledged the threat and were doing what they could. Faced with the same threats and warnings, Canada's ruling parliamentarians did nothing and to that extent they shoulder a share of responsibility for the 9/11 attacks. Whether the new laws passed in Parliament will be effective remains to be seen, but Ottawa is now so late into the game that terrorist organizations are so well-entrenched, so deeply embedded into Canadian society, that ridding them from the country may well be impossible.

Canada Among Nations 2002: A Fading Power, edited by Norman Hillmer and Maureen Appel Molot. Copyright © Oxford University Press Canada 2002. Reprinted with permission