Indicted N.Y. Financier Gave Big to Hillary and Terror Charity

The New York hedge fund billionaire indicted today in an alleged $20 million insider trading scheme, Raj Rajaratnam, was a major contributor to the campaigns of Hillary Clinton and also the single largest known U.S. contributor to a charity linked to the Tamil Tiger terror group in Sri Lanka, according to records obtained by ABCNews.com.

Rajaratnam is accused of operating an elaborate insider trading operation through his Galleon Group hedge fund, which made him one of the wealthiest men in America with an estimated net worth of $1.3 billion.

The case against Rajaratnam and the five others indicted alleges they netted over $25 million in profits and marked the first time a court authorized wire taps were used in a hedge fund case.

A Sri Lankan native, Rajaratnam gave more than $3.5 million to the Tamil Rehabilitation Organization (TRO), whose assets were frozen by the U.S. Treasury Department in Nov. 2007 because of its alleged ties to the Tamil Tigers.

According to documents filed with the IRS, Rajaratnam's contributions to the TRO were made in 2005 and 2006 through a separate charity, which he founded in the wake of the tsunami which hit Sri Lanka in Dec. 2004.

Despite its stated relief efforts, the Treasury Department described the TRO charity as "a front" for Tamil Tigers fundraising and procurement in the United States.

"TRO passed off its operation as charitable, when in fact it was raising money for designated terrorist group responsible for heinous acts of terrorism," said Adam Szubin, director of the Treasury's Office of Foreign Assets Control at the time.

The Tamil Tigers waged a bloody insurgency against the government of Sri Lanka in which both sides were accused of civilian atrocities. Under the Clinton administration, the State Department designated the Tamil Tigers as a terrorist organization in 1997.

Sri Lankan government officials alleged that contributions funneled through U.S. and Canadian-based charities prolonged the group's bloody campaign.

The leaders of the Tamil Tigers were killed by government forces in May, effectively putting an end to its insurgency.

Raj Rajaratnam Gave To Democratic Campaigns

Rajaratnam and his wife were also major contributors to a number of Democratic campaigns, giving a total of $118,000 to, among others, the Senate campaigns of Hillary Clinton and Chuck Schumer and the presidential campaigns of Mrs. Clinton and Barack Obama.

"He was big with Hillary and then jumped over to Obama after Hillary lost," said one Democratic party figure involved in fundraising.

Associates of Rajaratnam formed a Tamils for Clinton fund raising group for her presidential campaign and sought her help in getting the Tamil Tigers taken off the Stte Department's Designated Terror List.

"You shouldn't lump all terrorists together," Sen. Clinton said in 2007. Members of the Tamils for Clinton met with former President bill Clinton in Dec. 2007 to press their case.

Rajaratnam is also a major trustee of the American India Foundation, which is a member of the Clinton Global Initiative. President Clinton is the Foundation's honorary chair, and has publicly thanked Rajaratnam and his wife for their multi-million dollar support.

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