tsunami billions taken away
Central Bank report raises major
questions about foreign funds
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had been withdrawn though most of the tsunami recovery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
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
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All these funds have been withdrawn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
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.