interesting news articles…

Posted on 06/01/2012


Crouching Tiger, Hidden Raj  (-by David Rose, Vanity Fair, 30/09/2011)

The Outsider  (-by Suketu Mehta, NewsWeek magazine, 23/10/2011)

Forcing India Out of the Democratic Closet (-by Sadanand Dhume – 27-03-2012 – WSJ)

Why Sri Lanka Remains Defiant Against New Allegations of War Crimes (-by Jyoti Thottam – 16-03-2012 – Times)

Capitalism: A Ghost Story  (-by Arundhati Roy – 16-03-2012 – Outlook India)

Tangalle (Sri Lanka): Paradise Lost (by Nadia Fazlulhaq – 01-01-2012 – The Sunday Times)

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Crouching Tiger, Hidden Raj

Earlier this year, Raj Rajaratnam, founder of the Galleon Group hedge fund, was convicted of conspiracy and securities fraud in one of the biggest insider-trading cases in the history of Wall Street. But there was another reason the federal government was interested in Rajaratnam—his alleged financial support for Tamil separatists in Sri Lanka, whose cause is spearheaded by the ferocious Tamil Tiger terrorists. Vanity Fair’s David Rose gets the untold story from a Tamil Tiger turned F.B.I. informant.

By David Rose

(Vanity Fair, 30-09-2011)
In November 2002, the Doubletree hotel in Somerset, New Jersey, hosted a daylong gala: lunch, speeches, dinner, more speeches, and finally dancing. There were more than 400 guests, and they were all there to mark the 25th anniversary of the Ilankai Tamil Sangam, ostensibly a cultural and social organization. Many of its members supported the demand by Sri Lanka’s Tamil minority for an independent state, and although the Sangam was not avowedly militant, the flags and videos of the movement’s military wing, the Liberation Tigers of Tamil Eelam (L.T.T.E.), were on display throughout the hall. The Tamil Tigers, as the group is known, were then in the 19th year of a civil war against the Sri Lankan government. Designated a terrorist organization by the U.S. State Department in 1997, the Tamil Tigers invented the suicide-bombing belt, a technology it exported to Hamas and al-Qaeda. The Tigers were responsible for hundreds of suicide attacks on buses, temples, and shopping malls, and for village massacres in which children were killed in front of their parents. In May 1991, the Tigers assassinated the former Indian prime minister Rajiv Gandhi. Two years later, they assassinated the Sri Lankan president, Ranasinghe Premadasa.

One of the distinguishing features of the Tamil Tigers is that the group was mostly financed from abroad by the large Tamil diaspora. Many of its donors were eminently respectable, and worked in America, Canada, Australia, and Europe in professions such as medicine and the law. And so at about seven p.m., it fell to a hospital anesthesiologist to introduce the Doubletree event’s star speaker, Raj Rajaratnam, a corpulent Tamil whose Galleon Group hedge fund had already made him the world’s richest Sri Lankan. His net worth would eventually reach a reported $1.8 billion.

Unbeknownst to Rajaratnam, his audience that night included an F.B.I. informant equipped with a concealed recording device. The informant, whom I will call by one of his nicknames, Rudra, would eventually make thousands of hours of clandestine recordings in the course of his 11-year undercover career, and the Department of Justice has used them as the basis of 20 successful criminal prosecutions. Rudra says his memory of what Rajaratnam said at the gala is clear, and it is supported by his former F.B.I. handlers, who heard the recordings when they were made. “He got up and, flanked by L.T.T.E. flags, he said, ‘Everyone must support the Tigers’ cause,’” Rudra recalls. “He mentioned the fact that his wife was an Indian Sikh [a minority group from which some had also mounted a terrorist campaign aimed at creating a separate state]. Rajaratnam said: ‘They’re terrorists. We’re terrorists. We are all freedom fighters.’ Everyone laughed. Then he added: ‘They’re our terrorists, and you all must support this struggle.’”

Rudra says that Rajaratnam sounded all the more persuasive because his own generosity was well established. For example, a few were aware within the Tamil community that Rajaratnam apparently had given the Tamil cause at least $1 million in recognition of the Tamil victory in 2000 over the Sri Lankan army at the strategic Elephant Pass, which controls access to Sri Lanka’s northern peninsula, where ethnic Tamils are concentrated. (John M. Dowd, a partner at the law firm of Akin Gump Strauss Hauer & Feld, which represents Raj Rajaratnam, said that Rajaratnam has never directly supported L.T.T.E. terrorism. He declined to answer specific questions from Vanity Fair, saying that he had nothing to add to the position already set out on behalf of his client in court filings.)

In May 2011, Raj Rajaratnam was convicted in New York on 14 counts of conspiracy and securities fraud in one of the biggest hedge-fund insider-trading cases in the history of Wall Street. The trial revealed how Rajaratnam developed a web of corrupt relationships and paid millions of dollars for insider tips that enabled him to beat the market time and again. But throughout the two-month hearing, prosecutors said nothing about one of the uses to which Rajaratnam allegedly put his criminally acquired fortune—funding Tamil terrorism.

Jay Kanetkar, who was Rudra’s main F.B.I. handler from 1999 until he left the bureau in June 2006, says that Rajaratnam’s alleged involvement with terrorism was a significant factor in why the F.B.I. and the Department of Justice went to such extraordinary lengths to nail him. “It was a conscious decision,” Kanetkar says, “to treat Raj the terrorist the way they treated Al Capone when they got him for tax evasion.”

The money trail that leads to Rajaratnam begins in a federal prison in Buffalo, New York, early in 1999. Jay Kanetkar and an F.B.I. colleague, both with the Joint Terrorism Task Force in Newark, New Jersey, happened to be looking for a new case to work when they got a call from an agent in the Immigration and Naturalization Service named Kevin Ryan. He said that Rudra was coming to the end of a five-year prison term imposed for storing two kilograms of heroin in a suitcase at his home on Staten Island as part of a drug-smuggling operation organized by the Tamil Tigers to raise money. A Sri Lankan citizen, now he was due to be deported. That fact, Ryan suggested, might give the F.B.I. some leverage to persuade Rudra to become an informant. Rudra, whose mild, slightly bumbling exterior conceals an evident sangfroid, was then in his mid-thirties, and he readily agreed. Although he had been drawn into the Tamil Tiger orbit while studying in India, and had even met its murderous leader, Vellupillai Prabhakaran, he says now that his commitment to their cause had only ever been lukewarm. And he was angered by the group’s failure to check on his family while he was in prison. Rudra says, “So I decided: I’m going to bring them down.”

Soon after being recruited by the F.B.I., Rudra met one of the Tigers’ leading international fund-raisers, Vijayshanthar Patpanathan, also known as Chandru, who told him that Rajaratnam was a “high-level business guy” who played a critical role in funding the terrorist group. (Chandru was later convicted and jailed by a New York federal court for conspiring to provide material support to a foreign terrorist organization, as a result of information supplied by Rudra.) “Three years before that 2002 fund-raiser, Rajaratnam was identified by Rudra as a major source,” says Kanetkar. Rudra also told the F.B.I. that Raj’s father, Jesuthasan Rajaratnam, a wealthy financial manager in his own right, was another generous donor. Father and son had set up the Rajaratnam Family Foundation, to support charitable causes in Sri Lanka and elsewhere. But it was also a clandestine financial channel for the Tamil Tigers, recent court filings allege. (John M. Dowd, who represents Jesuthasan Rajaratnam as well as his son, Raj, had no comment on specific questions regarding the allegations, but he did say that neither man had ever directly supported the L.T.T.E.)

For Rudra, meeting Tiger operatives was not difficult: they were often on hand at social functions, such as those organized by the Sangam. The challenge for him and the F.B.I. was to build his credibility. The ruse his handlers devised was for Rudra to intimate that he had had contact with top Mafia figures in prison, and that through them he had access to corrupt U.S. officials. These, he suggested, could get things done for the Tamil Tigers—such as smuggle Tamils who lacked proper visas into the United States. Beginning in the fall of 2001, Chandru paid Rudra $6,000 a head in order to arrange safe passage at Newark International Airport for at least nine such individuals, whose entry was coordinated between the F.B.I. and the I.N.S. Rudra used his supposed “contacts” again, in April 2004, when Chandru told him that Father Gaspar Raj, a Catholic priest who was also a key Tamil Tiger member, had been detained by federal agents at Newark and was about to be deported. Rudra says: “I called Jay Kanetkar and said he should get him out, and he did.”

Prabhakaran ran the Tamil Tigers abroad on classic, cellular lines, with each group operating independently and unaware of the others’ activities. But Rudra’s standing rose so high that he became an exception, the trusted go-to guy for every Tiger cell in America. “I’ve seen the e-mails,” he says. “They thought I could do anything.” Eventually, he was working with four separate cells, which were variously attempting not only to raise money but to arrange supplies of weapons, including surface-to-air missiles. (The would-be arms smugglers were also arrested and convicted on the basis of Rudra’s testimony.) Meanwhile, says Kanetkar, “he had four concealed video cameras in his living room, plus two in the kitchen. We had every angle covered.” Every time Rudra spoke on the phone or met a contact, the conversation was recorded.

Occasionally there were hiccups, such as the time a recording device fell out of Rudra’s pocket in front of Chandru—“I told him it was a pager,” Rudra says. His reassurance must have worked, for in August 2003 he accompanied Chandru to Sri Lanka. There had been a cease-fire, and they were able to travel from the capital, Colombo, to Vanni, the fortress housing 300,000 people that the Tamil Tigers had built from scratch in the island’s northern jungles. Vanni had underground bunkers for advanced computers and communications equipment as well as two fully equipped subterranean hospitals. There Rudra met most of the Tamil Tigers’ senior leadership, wearing a concealed F.B.I. wire all the while.

By 2005, Rudra’s penetration of the Tigers’ network was so deep that the F.B.I. had acquired a comprehensive picture of the group’s fund-raising capability. Raj Rajaratnam’s name came up frequently. “On the recordings, he was spoken of in a reverential way, with all the kudos he got as a financial whizz,” says Kanetkar. “At the same time, he wasn’t a commoner, which is why it was hard for Rudra to get close to him. He was reserved for the big stuff.” For example, in September 2005, two Tamil Tiger members were duped by the F.B.I. In an attempt to have the Tigers removed from the government terrorism list, they agreed to pay $1 million to two “corrupt State Department officials” (in reality, F.B.I. agents) whom Rudra had introduced them to. The Tamils went straight from that meeting to Rajaratnam’s house, apparently to arrange to get the money, according to Rudra and Kanetkar.

“Rudra told us that the L.T.T.E. had given Raj a very large sum of money for him to invest in the Galleon fund,” says Kanetkar. “It was clear that the Tigers did have that kind of money. They were raising $1 million every time they held a function, and also going door to door—extorting people to pay thousands of dollars for the next wave of operations.” Kanetkar and his counterterrorist colleagues had been aware of evidence that Rajaratnam was using illegal insider information since 2001, when wiretaps caught an executive from the Intel Corporation offering him insider tips. The F.B.I. saw the two endeavors—terrorism and insider trading—as connected, says Kanetkar: “Money from insider trading was going into his pocket, and money from his pocket was going to the L.T.T.E.”

For the Tamil Tigers, possibly the most damaging consequence of Rudra’s work undercover was the eventual closure by the authorities of the group’s main fund-raising “front” charities, not only in America but elsewhere, including Britain, where Rudra, accompanied by Kanetkar, shared his knowledge with the British Security Service, M.I.5. “This had a measurable impact on the course of the war,” says a former Department of Justice official. “It significantly weakened their capacity to fight.” The Tigers’ last stand came in April 2009, when the Sri Lankan army finally overran Vanni, killing not only Prabhakaran but, allegedly, thousands of noncombatants.

Of the Tamil front groups, the biggest was the Tamil Rehabilitation Organization (T.R.O.), which was active in 17 countries. Its assets were frozen by the U.S. Treasury in November 2007. Rudra’s secret recordings included detailed accounts by Tiger leaders of how money was transferred from the T.R.O. to the terrorist group itself, and in this case there is a copious documentary record of the role played by Rajaratnam. An affidavit filed in April 2007 by the F.B.I.’s special agent Louis Forella states that the banking records of “individual B”—Rajaratnam, according to court filings—show that “[he] wrote three checks totalling $1,000,000 between July and September 2000” that eventually made their way to a T.R.O. account in London, from which much of the money was later withdrawn in cash. The affidavit also cites letters from a later-convicted Tamil Tiger fund-raiser named Karunakaran Kandasamy about the need to fulfill Rajaratnam’s “long lasting desire” to meet Prabhakaran, describing the Galleon Group founder as “among the people who provide financial support for our struggle for freedom. . . . [He] has been working actively on the forefront.”

Court filings in a pending civil action against Rajaratnam, being brought by Tamil Tiger victims, more than 30 of their families cite a State Department cable dated October 2006 from James R. Moore, the deputy chief of the mission of the U.S. Embassy in Colombo, which was copied to the Treasury Department, the Department of Homeland Security, and the F.B.I. Moore described his dealings with Sri Lankan officials on Tamil Tiger financing, and quoted reports from the local central bank’s financial intelligence unit and the ministry of foreign affairs on the T.R.O. and its influx of funds from America (more than from any other country). “Of these remittances from the U.S., the [Rajaratnam] family is the largest private donor,” the cable said. In the period January 2003 to March 2006, according to one of the reports cited by Moore, the T.R.O. in Sri Lanka received nearly $10 million from its affiliate in America, a trend that was continuing, with $566,000 sent in the single month of August 2006. Overall, the Rajaratnam foundation was contributing more than 35 percent. The cable added: “These funds have been received from the T.R.O. office registered in Cumberland . . . Maryland, which is the entity that is presently being investigated by the U.S. authorities”—the investigation spearheaded by Rudra—“with regard to arms purchases for L.T.T.E.” When it finally shut the T.R.O. down, the U.S. Treasury stated that the organization had “facilitated L.T.T.E. procurement operations” including “the purchase of munitions, equipment, communication devices, and other technology.”

Tax and bank records confirm the scale of Rajaratnam’s support. In the course of 2003, he gave $5.05 million to his family foundation, which in turn passed on $5 million to the T.R.O. In June 2004, the court filings state, he gave another $1 million directly to the T.R.O. At the end of that year, the Indian Ocean tsunami devastated coastal Sri Lanka. Rajaratnam responded by setting up another charity, Tsunami Relief, Inc., which made appeals to the public and was administered by two of his staff at the Galleon Group headquarters, in New York. In all it raised more than $7 million. While money did go to the Sri Lankan government, nearly half of it was given to the T.R.O. in the U.S. and in Sri Lanka. (Court filings lodged on behalf of Raj Rajaratnam and his father say that while it is true that they gave large donations to the T.R.O., they were unaware that the T.R.O. was channeling money to the L.T.T.E.)

Rajaratnam gave few interviews before his arrest, in September 2009. But just a month before, he told a Sri Lankan business magazine that he was proud of his “humanitarian work in Sri Lanka,” saying that in the future, he would like to do more. (By this time, the Tigers had been defeated.) “I’m a firm believer that with success comes responsibility and the incredible power of possibility,” he said, “a responsibility to help those less fortunate and the possibility of actually succeeding in making a difference.” Rajaratnam’s criminal lawyers have told reporters he should receive a lenient sentence for his insider-trading crimes because of his charitable generosity. He is due to be sentenced on October 13.

Could Rajaratnam have genuinely confused charitable works with financial support for terrorism? The evidence suggests he knew exactly what he was doing. In 2001, on the Web site of the Tamil Sangam, the organization Rajaratnam addressed at the Doubletree, Rajaratnam’s father provided the research for statements that set out the association’s credo: “The L.T.T.E. is a freedom movement. Historically, freedom movements have been labelled as terrorist organizations by the oppressors. From George Washington to Mahatma Gandhi to Nelson Mandela, all freedom fighters have been called terrorists . . . . L.T.T.E. has not engaged in any killing that is not justifiable in the context of war.”

Understandably, that’s not how Mike Elsner, the attorney from Charleston, South Carolina, whose law firm, Motley Rice, has filed a claim against Rajaratnam, his father, and the T.R.O., on behalf of Tamil Tiger victims, sees the matter. Insider trading is not exactly a victimless crime, but to work out who is doing the suffering involves calculations that verge on the hypothetical. Elsner’s clients, in contrast, suffered concretely and very directly. In his office he showed me a video compiled from interviews he had conducted in Sri Lanka. They’re heartbreaking. Parents—some of them, in Sri Lanka’s multicultural society, Tamil themselves—talk about losing their children in horrifying circumstances, such as the destruction of a high-school baseball team caught in a blast at a Colombo railway station, or a young couple blown up two months before their wedding, and who were buried in the clothes they never got to wear at the ceremony. “This is what Rajaratnam was paying for,” Elsner says. In the response filed to the victims’ lawsuit, Rajaratnam’s lawyers state that there is “no connection” between Rajaratnam’s donations to the T.R.O. and the harm suffered by the claimants, adding that there is no evidence he ever sponsored acts of violence.

Under U.S. law, you don’t have to prove that money a person gave to an entity that funded terrorism was actually spent on bombs and bullets: it’s enough to show that the recipient body did in fact use some of its funds for terrorist purposes. The suit, which was filed in federal court in New Jersey, has already cleared its initial legal hurdles, with the court accepting jurisdiction and upholding it as a claim for crimes against humanity. The suit is asking for damages of an unspecified amount. Rajaratnam will almost certainly go to prison as a result of his conviction in the Galleon case. If he ever gets out of jail, he may not still be so rich.

SOURCE:  Vanity Fair (30-09-2011)


The Outsider
Oct 23, 2011 10:00 AM EDT

(The Daily Beast, NewsWeek Magazine, 23-10-2011)

In an exclusive interview, Raj Rajaratnam reveals his surprising motivations—and the reasons he didn’t take a plea that could have saved him from 11 years in jail.

At 6:30 his doorbell rang. He answered it to find a number of policemen and men in suits outside. An FBI agent named B. J. Kang told him he was under arrest for insider trading. There were five other agents with him, come to collect Rajaratnam. They asked if he had a gun, if he had drugs on the property. For a moment he was afraid they would plant something.

As they led him away from his family, Rajaratnam says Kang told him, “Take a good look at your son. You’re not going to see him for a long time.” He added, for good effect, “Your wife doesn’t seem so upset. Because she’s going to spend all your money.”

The interrogation, at the FBI office in lower Manhattan, lasted eight hours. They put a laptop in front of him and pressed a button. He heard the voice of his wife picking up his home phone. “Hello?” Then they clicked on another button and his voice came on, on his cellphone, talking to his Wharton classmate and friend Anil Kumar, discussing business matters at McKinsey, where Kumar worked. On the same day, Kumar and another Wharton classmate, Rajiv Goel, were charged with insider trading.

Two FBI agents, wearing prominently displayed guns, played good cop, bad cop. They thumped tables, jumped up and down, told him, “Just say you did it to one count!” But the suspect—who chose not to call a lawyer—was uncooperative. “In my head I was saying, ‘You can’t intimidate me! I’m from Sri Lanka’?”—where prisoners have to deal with much worse. They wanted him to turn in other hedge-fund managers. They wanted him, especially, to wear a wire and tape his conversations with Rajat Gupta, the former CEO of McKinsey. Gupta, whom Rajaratnam refers to as a “first-class guy,” was the most respected Indian executive in the U.S.

After the interrogation, they led Rajaratnam outside in handcuffs and paraded him in front of reporters for a perp walk. It was the most dramatic moment in a four-year investigation led by Preet Bharara, the U.S. attorney in Manhattan.

It was Rajaratnam’s understanding that were he to plead guilty and wear a wire, he might be offered a sentence of as little as five years. With good behavior, he could be out in 85 percent of that time. The evidence on the wiretaps was incontrovertible. It was his voice on the phone asking a variety of informants about companies he was investing in, and giving them loans and other monetary rewards in exchange.

Of the 50-odd people caught up in the insider-trading scandal, “most everyone that’s been charged has pled guilty,” notes Rajaratnam. “Nobody’s fought it. They’ve taken the plea.” But he decided to plead not guilty, and was later convicted on all 14 counts of insider trading, and is now going to jail for 11 years.

Why didn’t he take the plea?

Rajaratnam was a man who lived for information; his entire business edge was built on acquiring information before others did. But when it came to the biggest bet of his life, this master of information was guided—as he saw it—by the political history of his people, his personal journey as a dark-skinned immigrant through the rich countries, and a 3,000-year-old tradition of astrology.

The whole story speaks to the South Asian–American community: its pursuit of success and money at any cost; the differences between immigrants and the first generation; and the immigrants’ incomplete understanding of the rigor of the law in the U.S.

“There are rules and there are laws, and they apply to everyone, no matter who you are or how much money you have,” says Bharara. This is what was not easily understood by the South Asians named in the conspiracy. There are laws and rules in India and Sri Lanka, too, but they can be tested, ignored by those who have money or friends.

Rajaratnam is an immigrant, not American-born. He had grown up, as he tells it, in fear: of the Sinhalese majority in his homeland; of the skinheads in Britain where he’d studied; and of the established elites of Wall Street where he did business. At just about every stage of his life, there were people out to get him. “I saw myself as an underdog.”

Rajaratnam has lived in his penthouse apartment for 15 years. It has a splendid view of the East River on two sides, right where it curves around. “It’s nice to not feel claustrophobic in Manhattan,” he says as he shows me in. The living room, where we sit, has an idol of Ganesha, and pictures of his wife and children.

Rajaratnam’s father was an upright executive, the head of the Singer Sewing Machine Co. in South Asia. Residing in Colombo, the capital of Sri Lanka, in the 1960s, the family was Tamil, an ethnic minority favored by the colonial British. After independence, the majority Sinhalese systematically discriminated against the Tamils. Sensing that the situation would get more violent, Rajaratnam’s family emigrated in 1971. He was already in boarding school in London. Two years earlier, his parents sent the 11-year-old to study at Dulwich College. “P. G. Wodehouse went there,” I prompt him. Wodehouse is beloved all over South Asia because his comic novels demonstrate that the former colonial masters were … silly. His face lights up. “I spent three years in his room. People who stay in rooms in Dulwich write their names. When I moved in, I could see his name. I wrote mine below.”

Afterward, Rajaratnam went to Sussex University, in Brighton, to study engineering. These were the days when a far-right party, the National Front, was marching through the streets, beating up “Pakis,” who were easy targets. “They wouldn’t fight back. They were more docile.” Rajaratnam was once with his uncle in a tough London neighborhood, walking down the street, when three white men rammed their shoulders into the older man. “We started pushing and shoving,” but did not run. “Running has never been part of my M.O.” As a consequence, both Rajaratnam and his uncle got beaten up. But “I didn’t get beaten up any more than they did.” After that incident, Rajaratnam took to carrying chili powder in his pockets when he ventured out at night. “I was conscious of the fact that I could be attacked because of my ethnicity.”

After Sussex, he decided to get an M.B.A. at Wharton. Of the 600-odd students there, 20 were South Asian. That’s where the Galleon network began. His roommate ended up being head of investor relations at Galleon; another classmate later oversaw Asia for Galleon. Altogether, four people from his class ended up working for him. Most ambitious South Asians at the time went to Silicon Valley. “Wall Street was tough to get into for us. Not to be crude, but there’s a Jewish mafia, and a WASP mafia, and an Irish mafia up in Boston.” He rattles off the names of the leading money houses, identifying each by the ethnicity it is stocked with. “They hire their own; they socialize among their own.” When it comes to the South Asians, he bemoans the fact that “for us as a group there’s no unity.” He mentions the microscopically specific matrimonial ads in India Abroad, a community newspaper. “A Punjabi Khatri wants to marry a Punjabi Khatri …”

He was among the South Asian pioneers on Wall Street. “We didn’t grow up reading The Wall Street Journal. We didn’t have someone who knew someone who could give us an interview. We didn’t have the domain knowledge; we were all foreigners.” Americans had the connections.

Wall Street attracted type-A personalities, “people who could say, ‘I want to make a million dollars before I’m 30.’ ” Rajaratnam found this strange. “Culturally, we couldn’t say that. We were too shy to say, ‘I want to make a lot of money.’ We were more coy.” He noticed, too, that “Americans are born salesmen and born negotiators.” When he was a kid, if he wanted to go to a movie and his father said no, that was it. With his American-born son, however, “if I say no, he starts negotiating.”

Rajaratnam’s first job out of Wharton was at Chase Manhattan. Then he worked as an analyst for Needham & Co., in 1985, a startup. Rajaratnam was its 10th employee, and first South Asian. He started following the semiconductor industry. The PC was taking off, advanced computer chips were being mass-produced, and his engineering background helped him understand the technology. He became director of research and, in a few years, president. “I was in the right growth sector.” Along the way, he hired several South Asian analysts. At one point, George Needham, the chairman, asked him why he was hiring so many South Asians. In response, Rajaratnam read off the names on the company’s trading desk. “Almost all of them were Jewish.”

Rajaratnam realized that the real money was in investing, not research. So he started a hedge fund within Needham with $15 million from executives he’d previously done business with. It grew to $250 million in short order.

Then he founded his own hedge fund in 1997, called Galleon after the European ships that traded in spices and ivory with his birthplace, the Isle of Serendip. Galleon started with $300 million in funds. By January 2008, it had grown to 160 people. But the funds under management had grown exponentially. Rajaratnam was now investing $7 billion. It was the biggest technology-based hedge fund on the planet.

In 2007 a former Galleon employee in California named Roomy Khan was picked up by the FBI, confronted with various securities and tax charges, and made a deal with the feds, wiretapping her conversations with Rajaratnam. She had given the feds the names of 20 hedge funds. “Of all of them, why did they pick you first to wiretap?” I ask. “Mine was the largest,” he says, with some pride.

In New York’s South Asian community there are many stories of Rajaratnam’s generosity. He has given financial support to the Harlem Children’s Zone; the education reformer Geoffrey Canada testified in his support during the trial. He’s also given $250,000 a year for three years to South Asian Youth Action, a Queens-based NGO; his wife, Asha, is on the board. SAYA works with the children of immigrants who are not doctors or engineers, and those who have fallen from their model-minority status. “We middle-class Indians don’t worry about taxi drivers,” he says.

For four straight hours, Rajaratnam sits in his armchair and talks. I finally get up and excuse myself; I am due at a 50th-wedding-anniversary party at an Indian restaurant on Long Island. At the party I meet Indians who are working in banks or tech companies—Rajaratnam’s world. I tell them who I’ve been meeting, and their eyes widen. They are surrounded by their Indian wives and Indian-American children, who are performing synchronized Bollywood dances to entertain the parents. Before his indictment, Rajaratnam was an honored member of this world. “I am really respected in the Sri Lankan community,” he had told me, with emotion.

The second time I meet him, on a foggy, drizzly Monday, I am on the Upper East Side with half an hour to kill before my meeting. I spend it walking around the opulent district of Sutton Place. This is the most expensive housing on the most expensive island in the greatest economy in the world. This is where you come to live after you’ve made it everywhere else.

When Rajaratnam comes down the stairs to the living room, he hasn’t showered or shaved and appears listless, guarded.

Asha comes into the room to ask if we’d like lunch. She is a slight, shy woman wearing a leather jacket, and wears pain like a garment.

Rajaratnam’s reclusiveness—he has given almost no interviews to the press, even before there were any investigations—has led to many wild stories. “They wrote all kinds of things about me. It’s all theatrics, and the press just laps it up.”

His younger brother, Rengan, had urged him to show the world that he was human by bringing his family to the trial. Even the U.S. attorney, Bharara—who, like Rajaratnam, is South Asian—had his wife in the courtroom. “Bring abba [father] to the court, amma in a wheelchair!” urged Rengan. But Rajaratnam wouldn’t. “I didn’t want to subject my family to the scrutiny of the press. We are private people.” Asha showed up only on the day of the sentencing, sitting not next to her husband but in the spectators’ gallery. After they decided to convict him of all charges, the jurors collectively linked hands and prayed for the family of the man they had just convicted.

Did he regret anything?

“I’d probably not be so trusting of people.” It’s clear who he’s referring to. The government’s case rests principally on his two Wharton classmates. Anil Kumar, the McKinsey executive, was hired by Galleon as a consultant. The other, Rajiv Goel, worked at Intel for eight years. Both of them pleaded not guilty first, Rajaratnam notes, before they switched to guilty under prosecutorial pressure.

In his conversations with Kumar, Rajaratnam had trusted him to decide what was and was not insider information. “I did not think a senior partner of McKinsey would violate the confidentiality of McKinsey. I assumed he was kosher, that he would not cross the line.” Rajaratnam does not speak well of Kumar. He calls him a choot—Hindi for “c–t.” “I’m not Indian, but that word fits him,” he says. He remembers Kumar, after a statistics exam at Wharton, asking Rajaratnam: “How much did you get?”

RAJARATNAM: Ninety-seven. How much did you get?

KUMAR: I don’t want to tell you my grades.

Part of Rajaratnam’s narrative is that of a man from a smaller South Asian country seduced and betrayed by people from the Big Brother country. Kumar had introduced him to Rajat Gupta. The two of them wanted to start an Indian School of Business in Hyderabad. “I gave them [the school] a million dollars. I later found out they never contributed any of their money, and are listed as the school’s founders. And I’m not even a fucking Indian.”

The betrayal by the Indian associates hurts the most—he barely mentions the white government witnesses. He regrets doing a joint venture with the Indians.

The South Asian connection makes less sinister some of the allegations in the trial. For example, the prosecution noted that Rajaratnam would visit Goel’s house in Silicon Valley, presumably to talk about Intel. But the real explanation is more human. “His wife makes really good chaat [a savory snack]!” Rajaratnam and Goel were very good friends, so his betrayal hurts him personally.

“There are two types of plea bargains. One is, you cooperate with the government. You finger 10 other people. The other is a plea bargain without cooperation.” The white defendants all pleaded without cooperating; they did not wear a wire. “The South Asians all did the plea bargain with fingering,” he notes sourly. “The Americans stood their ground. Every bloody Indian cooperated—Goel, Khan, Kumar.” He puts it down to “the insecurity of being an immigrant, lawyers bullying them into that position.”

As late as two weeks before the sentencing, Rajaratnam was still being asked by the government to turn on Gupta. But he wouldn’t wear a wire, he says, so he could sleep at night. “Anil Kumar’s son worked at Galleon one summer. I used to vacation with Rajiv Goel’s family. Their families knew my family. You don’t think this is going to haunt these guys? They wanted me to plea-bargain. They want to get Rajat. I am not going to do what people did to me. Rajat has four daughters.”

The Rajaratnam case can be seen as a metaphor of the difference between immigrants from South Asia, who have a more elastic view of rules and a more keenly developed art of networking, and their children, the first generation, schooled to play by American rules. Preet Bharara came to the U.S. when he was an infant. Yet for all his complaints about unfairness, Rajaratnam, surprisingly, still believes in American justice. “In Sri Lanka I would have given the judge 50,000 rupees and he’d be sitting having dinner at my house. Here, I got my shot. The American justice system is by and large fair.”

“In your case too?” I ask.

“I said by and large.”

Why so many Indian names in the indictments, I ask. “Because Roomy Khan’s network was Indian,” he explains simply. “They’re not being unfairly targeted. I don’t believe in conspiracy theories.” His brother Rengan sees it differently. “For years these guys were sitting around in sports clubs and exchanging information. That wasn’t a crime. And now we immigrants do the same thing and it is?”

Speaking of the prosecutors, Rajaratnam says: “They want to get into your head. I’m a fighter, an underdog.”

Earlier we’d been discussing Velupillai Prabhakaran, leader of the Tamil Tigers. In his final days, Prabhakaran, too, was under a form of house arrest in his bunker, where he spent his time cooking Chinese meals. When his body was found, it was obese. Prabhakaran had wanted nothing less than total independence, but the Sri Lankan Army put paid to that idea, brutally, in 2009. “Clearly, we lost,” Rajaratnam says. For a second, I’m not sure who he’s talking about: Prabhakaran and the Tigers, or himself. Both of them held out for the maximum. They put up a fight and were wiped out.

It makes sense: the Tamil schoolboy, persecuted in his home country; tormented in the U.K.; handicapped in his career, as he saw it, by his ethnicity. When faced with yet another antagonist, he reaches for the chili powder in his pockets. But still, wouldn’t the balancer of risk and profit have realized that the smart thing to do was to take the plea and hope for a reduced sentence, rather than risk dying in jail? (Rajaratnam has advanced type 2 diabetes; his kidneys are failing.) It seemed like an irrational decision.

But there is an irrational explanation. A Sri Lankan diplomat close to Rajaratnam told me that she’d met him shortly before he was convicted. “He’d gone to the ola-leaf readers. They told him he’d be acquitted.” Ola-leaf readers are Sri Lankan astrologers. They believe that 3,000 years ago, seven Indian sages decided to write down the horoscopes of every person yet to be born, on a series of palm leaves. A skilled reader can read the leaves to present a complete life story of an individual, including his future. So on a subsequent meeting with Rajaratnam, I ask him about the ola leaves. “A friend did it for me,” he says, startled that I know. The friend took his (and his wife’s) date and time of birth to a leaf reader in Sri Lanka, who sat before a sheaf of leaves and asked a series of questions to which the friend answered yes or no, as at a deposition.

“Is his name Vijay?”


“Is his name Karun?”


“Is his name Raj?”


Then the correct ola leaf was picked out by the astrologer and Rajaratnam’s fortune read. The astrologer chanted into a tape for 45 minutes. The recording said there was a government case against Raj, that he was in the stock business, that he was world-known. That he had to close his business down.

“So I don’t generally believe in fortune tellers and astrologers,” Rajaratnam says. “But the ola leaves were written thousands of years ago. In those days there was no share business. I found it interesting.” The leaf reader also divined that his wife was born in “some Southeast Asian country.” Asha was born in the Philippines.

There were other unorthodox influences on Rajaratnam. “Two or three years ago, before all of this stuff happened, my sister Vandani was in Singapore—she’s into all this stuff. She called me one day and said, ‘Raj, I met this person who said you’ll be betrayed by an Indian woman with a mole on her face.’?” He didn’t pay much attention to this prophecy. “Then I got indicted, and I saw a photo of Roomy Khan, with a huge mole on her face. The picture was from a few years ago. She had it surgically removed.”

And at the end of the ola-leaf reader’s tape, the astrological conclusion heartened him. “He said that eventually I would prevail.” It fueled his conviction that he should fight the case all the way. It explains his puzzling insistence that he is innocent, in spite of the massive wiretap evidence to the contrary.

This was his edge; this was inside information that no one else had.

Suketu Mehta, a professor of journalism at New York University, is the author of Maximum City.

SOURCE:  NewsWeek / The Daily Beast (23-10-2011)


Forcing India Out of the Democratic Closetby SADANAND DHUME  (27-03-2012 – WSJ)


Why Sri Lanka Remains Defiant Against New Allegations of War Crimes -by Jyoti Thottam (16-03-2012 – Times)


Capitalism: A Ghost Story  –by Arundhati Roy (16-03-2012 – Outlook India)


Tangalle (Sri Lanka): Paradise Lostby Nadia Fazlulhaq (The Sunday Times – 01-01-2012)


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