Overseas Terrorism in Canada, money, war taxes

All rights and all wrongs have long since blown away,
For causes are ashes where children lie slain.
Yet the damned UDA and the cruel IRA
Will tomorrow go murdering again.
But no penny of mine will I add to the fray.

-- Stan Rogers, "The House of Orange."

Saps and Sugar Daddies

Terrorist groups can raise money in any number of ways, but one of the best methods is to farm legal sources for legitimate money. It is hard to appear heroic and visionary if all of your funding comes from squalid criminal activities so, even if only for the sake of appearances, some income must come from legitimate sources. Moreover, whenever criticism comes in from outsiders, the terrorist and his apologist can brandish the contributions sent in from ordinary supporters and offer the argument that they could only survive through the will of the people they claim to represent.

Often, the pennies received through open sources can be used to conceal the dollars received through less legitimate means. For example, during the Cold War western Communist parties always denigrated "gold from Moscow" reports as a McCarthy-style myth, and claimed that their headquarters and newspapers were entirely supported by party members and lone citizens — a lie that was torn to shreds when Vasili Mitrokhin, the archivist for the 1^st Chief Directorate of the KGB, defected with copies of their files in 1992. It turned out that Western Communist parties received the vast bulk of their funding from the Soviets, which explains why most of them had to engage in a post-Soviet fire sale of their assets. Likewise, the Provisional Wing of the IRA has always preferred to explain that its money comes from open supporters in North America, and from "Prisoners’ Penny" boxes, rather than from illegal bars, smuggling, and extortion rackets.

Freely donated money, besides camouflaging income from less savory sources and acting as a tangible symbol of ‘popular’ support, has another important benefit for many terrorist groups — being legally raised, it is much more secure than other monies. Among other things, it can often be openly banked and openly transferred to front organizations (often in another jurisdiction) before it slips out of sight and goes underground. It is hard to think of any major terrorist group that refrains from seeking donations from open sources.

The first rule in raising money is, inevitably, to ask someone for it. Terrorists are not very different from anyone else. Soliciting wealthy patrons, canvassing supporters in the community, and importuning the general public can raise money for any particular cause. Worse still, in Canada and other nations, it is even possible to create legitimate charities so that money raised for a terrorists’ cause can be written off for tax purposes. If a terrorist group’s political front is really well organized, they can even attract financial support from different levels of government.

At the lowest levels for fundraising for terrorist groups, one can occasionally find members of the MeK patrolling downtown streets of Ottawa and Toronto with a sandwich board showing purported photographs of Iranian government atrocities and presenting a tin-can to pedestrians in the hope of receiving pocket change.

As recently as 1996, it was possible to find the traditional "Prisoners’ Penny" collection box on the counter at some Irish pubs in various Canadian cities — the last one spotted by one of the authors was at the bar counter at the Unicorn, a Toronto pub operating under a loose affiliation with the Canadian singing group "The Irish Rovers," in May 1996. Traditionally, these boxes were supposed to support the families of imprisoned IRA members and hunger strikers, with the proceeds normally being administered by Sinn Fein. Visits to a number of Irish-themed pubs in Montreal, Ottawa and Toronto in 2002 saw no boxes, and it seems that the custom has been discontinued.

At the other end of the scale, there have been wealthy patrons who have supported terrorist groups — often in the hope of reinventing themselves as terrorists as well. The wealthy Italian publisher Giangiacomo Feltrinelli succumbed to radical chic and transformed the Italian Red Brigades from a minor band of impoverished would-be revolutionaries to a dangerous well-armed terrorist group in the 1970s. The full spread of Feltrinelli’s genius can be attested to by his 1972 death, when he blew himself up trying to dynamite an electrical pylon; he climbed up the tower with a dynamite charge that already had the detonators inserted — an extremely stupid undertaking. It later turned out that the one of the corporations controlled by the aspiring terrorist owned the land that the power line ran through. Sic semper ignoramus.

Feltrinelli’s modern, and more cautious, counterpart would be Osama bin Laden. He donated a large part of his own fortune to help establish al Qaeda, and has introduced a number of other wealthy Arabs to the organization. Bin Laden seems infinitely more careful about his personal safety that Feltrinelli was, and what remains of his own fortune apparently forms the core of the al Qaeda financial reserves.

While no major Canadian sponsor of terrorism on the scale of Feltrinelli and bin Laden has ever emerged, the majority of funds raised by the Sikh group Babbar Khalsa International initially came from donations made by usually wealthy individuals who were sympathetic to the hard-line message and goals of the movement. For example, financing for one major trip to Pakistan, in which Talwinder Singh Parmar met with the country’s defence officials, was largely funded by a Sikh millionaire residing in the United States. The events of 1984, particularly the Indian military operation in the Golden Temple of Amritsar, allowed the BKI’s coffers to swell for a brief period of time, when hundreds of outraged Canadian Sikhs made contributions to the group.

Federal Court of Canada documents reveal that Iqbal Singh, a member of the BK, provided its leader in India with the names of prominent members of the Canadian Sikh community, who could be approached about contributing to the organization. This individual also provided thousands of dollars to cover the legal fees and immigration expenses of family members who had committed hijackings on the Indian subcontinent. Singh also housed the wife and children of the one time leader of the BK while she was here in Canada. A Federal Court Justice found that this act was prearranged with the BK in India.

Between collecting spare change in tin cans and finding a lucrative ‘sugar daddy’ there are a host of legitimate and quasi-legal fundraising techniques that terrorists and their supporters can engage in, and some of them are employed in Canada.

War Taxes and Donation Systems

"War Taxes," "Subscriptions," and "Donation Systems" are probably the oldest fundraising techniques used by terrorist organizations. The system is a simple one --all those who are supposedly going to benefit from the exertions of the insurgent are expected to make regular contributions to the group. However, very few rebel groups really enjoy genuine popular support and nobody enjoys paying taxes, let alone to both a legitimate government and to an insurgency.

Wherever it has been employed, the war tax system has operated in a simple manner, households and businesses are approached by the representatives of the terrorist organization or one of its front organizations, and invited to make a regular contribution to the cause. The payment is usually modest and only a small fraction of a household’s income or business’ gross revenues is expected. However, when 10,000 households and 500 businesses are regularly tapped, the revenue stream can become impressive.

The need for the terrorist group or front organization to administer their collection system with records, ledgers, and specifically tasked administrators makes disruption of such a network easy… sometimes. However, in the organized crime world, for example, Chinese Triads and the Sicilian Mafia have been able to keep systemic collection rackets running for decades without serious interference. It may also be that the lucrative appeal of their collection systems are what kept the Triads running long after their original purpose as anti-Manchu/anti-government rebels had faded.

Coercion is the engine behind any tax system, and terrorist groups can exercise it more readily than governments can. But regular donations and taxes are really only possible in a population where the terrorist and his political fronts have almost complete control, or exercise either strong sympathies or abject terror, within the community. Otherwise, the authorities can interfere with the collection of the tax system, and can expect to soon develop a network of informants. There are exceptions, and some people have been seen to readily accede to the collection of a regular tax system. Among these are the Sri Lankan Tamils of the ‘Diaspora’ outside of Sri Lanka.

Toronto police and Sri Lankan diplomatic officials maintain that a regular system of contributions and proceeds from extortion in Canada went to pay for the war in Sri Lanka. Paul Clark, of the Toronto Tamil Task Force, said that a million dollars a month was raised in Toronto through a combination of quasi-legal and illegal means. Predictably, the LTTE’s front groups denounced the report. The head of the Tamil Eelam Society of Canada once remarked: "I don’t think there is even one instance of extortion… Every cent we collect is by donation" when responding to a similar story. In 1991, an official of the Eelam People’s Democratic Party (then led by a defector from the LTTE) claimed that Canadian Tamils were being shaken down for $200,000 for an ‘urgent war fund’. Sam Duraiswamy, then vice president of the Tamil Eelam Society of Canada, claimed to have no knowledge of any complaints or of any force that was being used to gather donations. Unfortunately, front organizations can often deliver statements filled with terminological inexactitude.

The regular subscription system may have also been surpassed when the LTTE was trying to launch a major offensive in 2000. As the Tigers readied for a key battle over Highway A-9 near Jaffna, it was reported that they were expecting every Tamil family in Australia, Canada, and the UK to contribute about US $1,000 for the cause.

LTTE fund raising operations are arguably the most sophisticated of any terrorist organization being undertaken on Canadian soil. They have mastered the techniques of collecting regular donations from the expatriate community, organizing regular "cultural" events, accessing public monies, and running numerous charitable organizations, to name but a few of the activities used to keep Canadians in the dark as to the true purpose behind these fundraising undertakings.

Donations, whether voluntary or coerced, make up a huge component of the Tiger war chest. The apparatus for the systematic collection of voluntary contributions by Tamils living internationally have their roots in Britain, and were triggered by the widespread anti-Tamil rioting of 1983 in Sri Lanka. In a London meeting, convened by an LTTE representative K. Balaskeram, under the name of the Eelam Solidarity Campaign, a presentation was made to British Tamils who were rightly concerned for the well being of their families still in Sri Lanka. Sympathizers who attended the meeting were encouraged to leave their names and telephone numbers. LTTE supporters then followed up on the lists, and created an apparatus that divided Britain into territories and expanded the lists of supporters.

The genius behind this approach was that Tamils were then acclimatized to donating to the Tiger cause, and were put into the habit of giving on a consistent monthly basis. Once the idea is accepted, it becomes legitimate and, with some repetition, evolves into becoming normal. The template formed in Britain has been transferred to all countries where there are large Tamil populations and is now supported by a rigid recording, accounting, and "compliance" process.

There is another element to the collections process that makes the LTTE unique. While the story of collections rackets for insurgent groups is an old one, there have been many examples over the years of terrorist groups (or their fronts) tapping income from emigrant communities elsewhere. Russian Anarchists in the 19^th Century solicited funding from Russian émigrés living in Western Europe; the Provisional Wing of the IRA sought to harness the affections of Irish Catholics living in North America during the 1970s, and Middle Eastern groups certainly look for money from inside the Muslim communities that have been formed in recent decades inside the Western World. What makes the Tigers different is that they appear to have facilitated and encouraged the growth of ‘Diaspora’ communities of Tamils inside Western Europe, North America, and Australia — with the expectation that these communities could be harnessed to raise money for the cause.

A definite pattern exists in how the LTTE orchestrates the movement of Tamils worldwide, they look for two factors in deciding host countries: a liberal refugee policy, as well as a generous welfare system. The second factor is most important, as it allows the Tigers a means of accessing capital and diverting it to fund the movement. Merely putting Tamils abroad would not suit the Tigers’ purpose, as they need the hard cash that asylum seekers in certain western countries can generate. This is the reason that countries such as Holland, Germany, Switzerland, and Canada were prime destinations for Tamils. Welfare recipients have been prime targets for LTTE donation-collectors and extortionists.

This pattern appears to have been followed at least once already, as tens of thousands of Somalis bailed out of their collapsing homeland in the early 1990s. Many came to Canada with prior knowledge of the social benefits here, in the full expectation of harnessing them both for personal advantage, and to advance the fortunes of their clans.

In the Tamil case, the Sri Lankan foreign minister reviewed some of the more interesting developments overseas when addressing their parliament on February 9^th, 1996. He reviewed the need of the LTTE to have a "considerable population of asylum seekers abroad in order to generate sufficient funds…" and cited Canada, Switzerland, Denmark, the UK, Norway, Australia, and Germany in particular. Stories from inside Europe bear out some of his complaints.

In 1999, the Germans put eleven Sri Lankan Tamils on trial for running an extortion racket among Tamil refugees in the Ruhr area since 1985; families were expected to contribute between $3 to $60 US per month, and that those who failed to cough up their donations could expect intimidation either in Germany, or directed at their families inside Sri Lanka. The system was a lucrative one, one of the defendants was charged with transferring 3.3 Billion Deutschmarks (about $1.95 Billion) to the tigers in a four-year period. Another intimidation ring that was broken apart in Germany acquired about 200,000 DM a month by collecting at least 50 DM per family — although one must assume that they undertook other activities as well.

On April 10^th, 1994, Swiss police arrested 15 members of the LTTE for intimidating Tamils in the country, and beating and confining some of those who refused to donate around $60 a month to the cause. Canada’s own Immigration and Refugee Board acknowledged that Tamils inside Western Europe had to pay similar amounts as early as 1992.

Understandably, a lot of ordinary Tamils are shy about coming forward to tell stories about what they have experienced. Being identified as a media source could be personally hazardous (perhaps more so in the early 1990s than today) while becoming a known critic of the Tigers and their activities could result in being cut off from much of Tamil community life. A few will nervously confide stories of their own experiences if they know that their information is strictly off the record — the interviews conducted under these conditions in the 1990s were contrary to accepted practices for the news media, academia, and other sources of research and authoritative comment, but consistent reports suggested that the pattern that was being seen in Europe was also being practiced in Canada.

In essence, several Tamil refugees implied that there was a systemic collection system operating in Canada soon after the arrival of the first Tamil refugees from Germany in 1980s. Those who refused to comply with the demand for about $30 a month sometimes found it necessary to move to avoid visits from enforcers. However, if they contacted family members back in Sri Lanka, especially if their families were living in LTTE controlled areas, it became clear that the Tigers were monitoring them as well and would demand a cut if any money was sent home. Moreover, the family would be pressured into revealing the new address of their reluctant relative in Canada, and he would be expected to soon make good on arrears in payment.

The implication from both Europe and Canada is that Tamil organizers overseas remained in close contact with organizers in Sri Lanka, and that a system of checks exists to ensure that all overseas Tamils make contributions. This suggests a close level of coordination and an efficient administrative structure of some kind.

Is a systemic collection system still being run among Canada’s Tamil community? It appears that one did, perhaps still does, and that the system might have easily collected between one to two million dollars a month in Canada alone in the late 1990s. However, the current ceasefire would make it much more difficult to collect regular payments from most Canadian Tamils, as the incentive to voluntarily cooperate with the system has become weaker. Additionally, as the Tamil community has grown in size it has become harder to control — which makes it more likely that some Tamils will eventually come forward to publicly denounce the collection system if attempts are made to perpetuate it.

At various times in the 1990s, sources within the Sri Lankan community stated that some Tamil owned businesses in the Toronto area might display a small ‘license’ on the premises that indicates that the establishment is a regular contributor to the World Tamil Movement. This report had been heard from three different sources, one of who was also a regular source of intelligence to the RCMP and Canada’s Immigration services. A series of visits to Tamil owned convenience stores and shops in key neighborhoods in Toronto over 2002 noticed a small blue form in Tamil script only, by the cash register in about 15% of visited stores. This did not match earlier details of the ‘license’ (described as being a small plaque), and was found in too few stores to confirm earlier reports of the systemic taxation of Tamil business establishments.

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John Thompson is President of the Mackenzie Institute which studies political instability and terrorism. He can be reached at: mackenzieinstitute@bellnet.ca

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