Investigators traced the explosives to a 60-tonne shipment of TNT and RDX bought by the Tamil Tiger rebels from a Ukrainian chemical plant. The Singapore bank account that paid for the purchase was held by a Canadian.

The Tigers have tapped every imaginable source of revenue in Canada: front organizations, businesses, migrant smuggling, passport forgery, drugs, organized crime, fraud, extortion, gangs and rallies at Toronto public schools during which men in military uniforms carry replica assault rifles.

After Canada signed a landmark United Nations convention in February designed to stop the flow of money to terrorists, three federal cabinet ministers condemned international terrorism and said Ottawa was committed to fighting it "at its source" by choking off its financing.

Grilled repeatedly over the matter in the House of Commons this week, Mr. Martin responded by calling the opposition's line of questioning "anti-Canadian." Replied Monte Solberg, the Canadian Alliance MP: "FACT is a fundraising organization for the Tamil Tigers, that's well established. Yet even though our own security agency has made that very clear, the Finance Minister and other ministers go to these sorts of events and put money into that organization."

Tamil migrants from Sri Lanka began arriving in Canada in the mid-1980s, after the Tigers launched attacks against government security forces. Among them was a core of Tamil Tigers leaders, such as Thalayasingham Sivakumar, as well as former rebel soldiers and supporters of Tamil separatism, according to a CSIS report.

The World Tamil Movement was formed in Toronto and Montreal in 1986 "to represent the interests of the Sri Lankan Tamils before the different levels of our government and the public with an explanation of their desires and needs."

The links between the LTTE and the WTM are so substantial that when arguing before the Canadian courts, Crown lawyers have referred to the groups simply as "WTM/LTTE," as if they were a single entity. "WTM is the leading front organization for the LTTE in Canada," writes Dr. Rohan Gunaratna, a leading authority on the Sri Lankan conflict, a contributor to Jane's and a research associate at both the Centre for the Study of Terrorism and Political Violence in Scotland and the Institute for Counter-Terrorism Policy in Israel.

He arrived in Canada in 1990 and according to a judge, lied under oath to the Immigration and Refugee Board. He was recognized as a refugee the following year. As co-ordinator of the World Tamil Movement, he also played a co-ordinating role in FACT and was heavily involved in fundraising.

CSIS agents investigating his background concluded he had been sent to Canada by the Tamil Tigers to oversee the crucial Canadian arm of the LTTE's global fundraising network. He was declared a threat to national security and arrested in 1995.

The Federal Court of Canada agreed with the Crown's submission that Mr. Suresh was "a dedicated and trusted member in a leadership position with the LTTE." It also ruled he had come to Canada "to head the World Tamil Movement, which it can reasonably be concluded, is part of the LTTE organization or is, at the very least, an organization that strongly supports the activities of the LTTE."

A deportation order was issued against Mr. Suresh in 1997 but he remained in the country as a series of appeals were launched. Even while he was imprisoned, he continued to "exert his authority over the WTM/LTTE network by communicating decisions, instructions or recommendations," the Crown said.

In a ground-breaking decision in January, the Federal Court of Appeal, ruling on Mr. Suresh's case, said that those who raise money for terrorism are as culpable as those who actually plant a bomb. Now 44, Mr. Suresh has been released while he waits to argue before the Supreme Court of Canada that he should not be sent back to Sri Lanka because he might be tortured.

Yesterday in the House of Commons, the Suresh matter was raised by the Canadian Alliance, which asked whether the case was "not an admission that FACT is indeed a front for a terrorist organization? Could the minister please relay this information to her colleague in finance?"

Lawrence MacAulay, the Solicitor General, said "it is important to note that CSIS does not provide a list of terrorist organizations and it does not provide a list of people or organizations that it is observing." CSIS, however, has released reports naming terrorist groups operating in Canada, and the LTTE has figured prominently among them.

The WTM suffered another setback when it, and FACT, were identified on the U.S. State Department's annual list of terrorist groups as "front organizations" for the Tamil Tigers. Since the arrest of Mr. Suresh, the WTM has played a lesser role in LTTE support activities and FACT has become more prominent, Dr. Gunaratna writes.

According to a report published in March by CSIS, FACT is the Canadian wing of a "global structure" that includes affiliates in Switzerland, Australia, France, Germany and the United Kingdom whose purpose is "to harness political and economic support for the LTTE."

A main objective of LTTE support groups is to spread propaganda "by preaching a tireless threefold message": that Tamils are innocent victims of the Sinhalese-dominated government; that Tamils are subjected to constant discrimination and military oppression in Sri Lanka; and that Tamils can never co-exist with Sinhalese in a single state, the report says.

The LTTE also runs a "sophisticated international fundraising campaign," with the majority of money coming from ethnic Tamils in Canada, Switzerland, Australia, the U.K., the United States and Scandinavian countries. There is also evidence the LTTE profits from heroin smuggling and by "siphoning" donations to non-profit cultural organizations, the report says.

"The great advantage of this form of financial procurement is that it is often extremely difficult to prove that funds raised for humanitarian purposes are being diverted to propagate terrorism or other forms or illegal activity elsewhere," says the CSIS report, written by Professor Peter Chalk of the Rand Corporation in Washington, D.C.

After they were challenged in the House this week for attending the FACT dinner on May 6, the Liberals responded by portraying the opposition attack as an affront to all Tamils. But ethnic Tamils have been the main victims of the Tigers. The LTTE has killed off political moderates and ruthlessly maintains its hold on power.

"Fundraising activities have involved extortion, blackmail, intimidation and violence," said the CSIS training report. "The net effect on Tamil immigrant communities is one of destabilization and fear. More importantly, LTTE activities undermine Canada's responsibility to ensure the safety and security of the Canadian population."

According to the CSIS document, the LTTE has an "extensive tracking system" that is used to keep records on Tamils living abroad, including their earnings and the amount of money they send back to their families in Sri Lanka. "When money is sent to a particular household, an LTTE representative in Sri Lanka visits the household and asks for a portion of the funds."

Dissent is quickly and effectively quashed by LTTE enforcers. The editor of a Toronto Tamil magazine was assaulted in 1993 for criticizing the Tigers, and Toronto police arrested one man for allegedly beating a Scarborough shopkeeper and stealing copies of the publication. The editor was later forced to suspend publication due to threats.

"The goal of the LTTE in North America is to raise money," said a 1999 RCMP intelligence report. "The extremists have connections in the U.S.A., Europe, Switzerland and Sri Lanka with large sums of money moved from Canada. Some of this money is raised through donations from the Tamil community and the remainder through criminal activity."

According to police, ethnic Tamil gangs, particularly the VVT, are controlled by the LTTE and use crime to raise money for the war. The Toronto police force's Tamil Task Force has also documented links between the LTTE, the VVT and the World Tamil Movement, according to a recent Federal Court of Canada decision.

"The task force also has information which indicates Yogarajh is the leader of the WTM and the Tamil Eelam Society as a non-elected LTTE representative. He is said to have arranged for an LTTE European representative to come to Canada in summer 1998 to broker the gang peace," an RCMP report says.

There have been more than 40 Tamil gang shootings in Toronto in the past three years and five homicides remain unsolved, according to an RCMP briefing report, which says there has been "increasing violence" but witnesses are fearful and few will testify against the gangs.

Several gang members are facing deportation, including Sriranjan Rasa, who a judge said played a "significant' role in the VVT, which he said was characterized by its willingness to use violence.

"There is no question that Tamils are heavily involved in organized criminal gangs in Toronto and Montreal and that many of them have connections to the LTTE. Some of these gangs are directly tied to LTTE front groups in Canada," the RCMP report says.

Police have also broken up smuggling operations that charge huge sums to bring Sri Lankans into Canada as well as forgery rings that produce fraudulent Canadian passports. In both cases, police say the proceeds end up financing the Tigers. The LTTE's chief procurement figure, Tharmalingam Shanmugan, is known to travel internationally using Canadian and other forged passports, CSIS says.

While it is impossible to know exactly how much money is raised in Canada to support the LTTE, Dr. Gunaratna estimates that more than $12-million in donations were collected last year, as well as $10-million in business revenues. He does not estimate the organized crime proceeds.

The money raised in Canada goes from 40 feeder accounts to 20 LTTE-controlled accounts in Europe and Asia, where it is drawn upon to purchase weapons from places such as the former Soviet states, Yugoslavia, Cambodia, Afghanistan, North Korea and Mozambique, he said. An LTTE shipping company transports the cargo using 10 rebel freighters. The weapons are often transported to Phuket, on the coast of Thailand, and then transferred to smaller vessels that take them across the Andaman Sea to Sri Lanka, where they are unloaded on rebel-held beaches. The Bangkok Post reported yesterday that Thai authorities had recovered a half-built submarine in Phuket, which they suspect was owned by the Tamil Tigers.

During a temporary break in hostilities, the LTTE, posing as the Bangladesh Army, used one of its Canadian accounts to buy 50 tonnes of TNT and 10 tonnes of RDX explosive from the Rubezhone Chemical Plant in Ukraine and shipped it by freighter to Sri Lanka. The result is Sri Lanka's equivalent of the Air India bombing, not only a devastating terrorist attack, but one carried out with Canadian complicity. According to Sri Lankan intelligence sources, the Tigers have so far used only half the explosives.

---

As Mr. Martin was dining with FACT, the Tamil Tigers were mounting a major offensive called Unceasing Waves III that aims to drive government forces out of Sri Lanka's northern Jaffna peninsula. The rebels captured a key army base at Elephant Pass, and have advanced toward the town of Jaffna. The rebel successes coincided with a surge in fundraising activity in Canada.

"If the funds did not come, the weapons would not be unloaded on our beaches," Lakshman Kadirgamar, Sri Lanka's Foreign Minister, said in a recent interview at his home in Colombo.

Although an ethnic Tamil, Mr. Kadirgamar is believed to be second on the Tamil Tigers hit list, behind only Chandrika Kumaratunga, the President, whose father and husband were both assassinated and who was almost killed herself in a suicide attack in December.

Mr. Kadirgamar's home is guarded like a fortress. Armed soldiers stand on elevated guard towers at each corner of his walled property. The entire block surrounding his house is sealed off with sand bags, check points, gun placements and gates designed to protect him from the rebel suicide squad, called the Black Tigers.

Asked if he is satisfied with the response of world powers to the insurgency, he replies: "We are getting, I would say a fair deal of international moral support. But we're not getting very good support in terms of fundraising."

Sri Lanka was among the first countries to sign the UN Convention of the Suppression of Financing of Terrorism. Canada signed a few weeks later, but still lacks any domestic measures that would make it illegal to raise money for terrorists, although such a law is in the works.

"It's well known that fundraising for terrorist purposes is one of the main reasons terrorism is occurring," the Foreign Minister says. "Those that don't have such laws must get them now. It's a matter of political will."