TRO’s tsunami billions taken away

A staggering four billion rupees the Tamil Rehabilitation Organisation (TRO) had received for tsunami relief in January 2005 had dwindled to Rs 56.3 million by August this year, the Central Bank said in a report.

The TRO funds were frozen by the Central Bank on August 28. By this time the bulk of the money had been withdrawn though most of the tsunami recovery projects were incomplete, the report said. The Sunday Times learns the TRO which pledged to construct 639 housing units in the north and east after the tsunami had completed only 100 so far.

When inquiries were made from a private bank that maintains 66 accounts for the TRO about the need for such a large number of accounts for a single organisation, the bank had said that each account was in respect of identified projects. However the bank was able to submit only 10 project reports, the CB report said.

The CB Report said the four billion rupees the TRO received amounted to 10 per cent of all tsunami funds received through the banking system in Sri Lanka during the period January 2005 -June 2006 and included domestic transfers/credits to the TRO accounts from NGOs and other banks amounting to Rs 2.6 billion.

The organisation received 50 per cent of its foreign remittances from the United States with TRO USA sending 50 per cent.

In August alone this year, a total of US $ 566,000 (Rs. 60 million) was remitted by TRO USA to the TRO and various affiliated organisations in the north and east. “These funds have been received from the TRO office registered in Cumberland in the state of Maryland in the USA. This is the entity now being investigated by the US authorities with regard to arms purchases to the LTTE,” the Report said.

The TRO funds were frozen in August following reports that it was being investigated in the United States for purported arms deals to the LTTE. The freezing of the account was ordered by the Governor of the CB under provisions of the Financial Transaction reporting Act.

The CB reports said the Rs. 56.3 million that was left in the TRO accounts on the day of freezing was a mere fraction of the funds received by the TRO, particularly the post tsunami period. “It is deemed that the funds coming through the banking system are largely in circulation outside the banking system in the hands of the TRO,” the report said.

All these funds have been withdrawn for use in projects purporting to be for tsunami purposes.

The report said that INGOs such as UNDP, UNICEF, Save the Children, Action Aid, and ILO had transferred funds directly to the TRO for humanitarian projects.

The report also identified several TRO front organisations.

Since 2003, the TRO has maintained accounts in seven leading banks -- the People’s Bank, Bank of Ceylon, Hatton National Bank, Commercial Bank, Seylan Bank, PABC and Standard Chartered Bank -- and has a network of 164 accounts at these banks of which 148 are in the North and East. Of the remaining amount, Rs. 52.2 million is with 148 bank branches in the north and east, the report said.

Arjun Ediriveerasingahm, a consultant to the TRO, reacting to the allegation admitted the organization had received more than Rs. 4 billion from various organisations but the money had been spent on various projects, including tsunami-rehabilitation projects at a cost of Rs. 2 billion.

He said accounts had been submitted to the Social Services Department and they had not been challenged so far.

Mr. Ediriveerasingham said he believed the Central Bank investigation was politically motivated. “Our lawyers have tried to meet the Central Bank Governor and explain the situation, but they have not been given an appointment,” he said.