The case of Ray Burke, the sheikh, £20 million and 11 Irish passports
On the night of Saturday, December 8th, 1990, at his home in Swords, Co Dublin, Ray Burke, then minister for justice, signed certificates of naturalisation for 11 people - eight Saudi Arabians and three Pakistanis. The certificates, on foot of which passports would be issued, had been dispatched to his home the previous day by the secretary of the Department, Des Mathews. Mr Burke was in Rome at the time on European Union business.
On the following day, the man for whom the passports were intended, Sheikh Khalid bin Mahfouz, the owner of Saudi Arabia's only private bank and one of the kingdom's wealthiest men, received them over lunch in the Shelbourne Hotel, Dublin.
Official documents suggest that Charles Haughey handed them over personally. The Taoiseach did not normally present new citizens with passports but these were no ordinary new citizens.
The passports were given as part of the passports-for-investment scheme, in return for a promised £20 million sterling investment programme in Ireland by the Sheikh. In return for the passports, Sheikh Khalid handed over a letter of intent - intent to invest the £20 million - addressed to Haughey Boland & Co, Mr Haughey's old firm of accountants but by then part of Deloitte Touche.
According to sources in the Department of Justice, Mr Burke did not press the Mahfouz passport application. But his action in signing the certificates on that Saturday night has continued to generate political controversy as details of the saga have dribbled out over several years.
Worry over how and why the 11 passports were issued caused Mr Burke's successor in justice, Maire Geoghegan-Quinn, to order an internal inquiry - an inquiry that was carefully reviewed by Bertie Ahern: first as he set about composing a cabinet in November 1994 (one which was never, in the event, appointed), then earlier this year and again after Mr Burke was made Foreign Minister.
The Mahfouz affair began on August 20th, 1990 when a firm of English solicitors, Mitchell & Co, based in Woodbridge, Suffolk, wrote directly to Mr Burke at the Department of Justice in Dublin. The letter could hardly have been more tantalising: it referred to - but did not name - "an extremely wealthy Arab gentlemen of Royal connections" who "could make an immediate investment in the country of £100 million sterling".
Three days later the solicitors again wrote to Mr Burke fully identifying their client, Sheikh Khalid.
"We have indicated to you that the Sheikh is extremely interested in rapidly ascertaining whether or not a waiver of the normal rules governing an application for citizenship can be applied in his case . . . We believe that it is maybe in your country's interest in this case to grant special treatment because of the financial investment that this gentleman could make in your country."
Mr Burke refused to meet representatives of Sheikh Khalid but he did arrange for them to be put in contact with the IDA, as was standard practice at the time.
But in every other respect they appeared to be accorded very special treatment, much to the consternation of some officials in both the Department of Justice and the Department of Foreign Affairs.
Critically, in a breach of the statutory regulations, the passports were issued in respect of the applicants - six adults and five minors - on Friday, December 7th, the day before the naturalisation certificates were actually signed.
The passports' date of issue was given as December 8th even though they were written up in the Department of Foreign Affairs on the previous day. Other standard procedures, including the need to swear fidelity to the State, the payments of fees and the requirement that the applicants should have been resident for about 60 days in the State, were also put to one side.
Meanwhile, the promised investment of £100 million had also been scaled down. On December 7th, 1990, the day the passports were issued, a letter to the Department from Patrick Kenny of Haughey Boland and signed by Sheikh Mahfouz confirmed the availability of £20 million sterling for suitable commercial concerns in Ireland.
This in itself was unusual since the Government generally required that the investment should be in situ before the passports were given.
With the Sheikh and his party scheduled to arrive by private plane in Dublin on December 8th for the Shelbourne lunch on the following day, Mr Burke signed the naturalisation orders. This was a highly unorthodox action. Generally, naturalisation certificates are signed by a senior official, usually an Assistant Secretary, with the delegated authority of the minister.
Questions were first raised about the granting of passports to Sheikh Khalid four years later when reports linked him to the BCCI banking scandal. The Sun- day Independent noted that he had been indicted by a Grand Jury in New York for having defrauded customers in the Bank of Credit and Commerce International.
In October 1994, Gay Mitchell of Fine Gael put down a Dail question about the circumstances in which the passports were granted. Although the question was not reached, the then minister for justice, Mrs Maire GeogheganQuinn - having considered the file - requested an assistant secretary in her Department to review the case. Dermot Cole was appointed.
By now, November 1994, Mr Haughey had been out of office for two years and his successor, Albert Reynolds, was about to be forced out by the Harry Whelehan affair.
Labour was deep in negotiations with Bertie Ahern, who appeared poised for appointment as Taoiseach. As Mr Ahern began to assemble his would-be cabinet, he sought to satisfy himself about the suitability for office of Mr Burke.
On the advice of some senior colleagues, Mr Ahern requested the file on the Mahfouz affair. He also requested a memo on it from Mrs Geoghegan-Quinn, which was lodged with the file on the case in the Department of Justice.
Mr Ahern's hopes of being appointed Taoiseach were to be dashed when The Irish Times published further details of the Whelehan affair and the Labour Party withdraw from the negotiations to form a new government with Fianna Fail.
On November 29th, 1994, as she prepared to leave office, Mrs Geoghegan-Quinn lodged a further memo on the file in which left little to the imagination as to where she stood. "I have read the file very carefully," her observations began, "and I have to say I am very concerned and alarmed about its contents."
She went on to describe the details of the case as "highly unusual to say the least" and to note that details about the promised investment were "extraordinarily scanty by any standards".
"I have some very serious concerns about the granting of naturalisation to the 11 persons in this case. If full, thorough and satisfactory answers to these concerns are not available, I am of the view that the certificates of naturalisation should, if possible, be revoked in each of the 11 cases."
In January 1995, Dermot Cole, the assistant secretary requested by Mrs GeogheganQuinn to investigate the affair, reported his findings to her successor, Nora Owen. The report found that Mr Burke's decision to sign the naturalisation orders ran contrary to standard procedures in the Department.
"It is the invariable practice, except in the case of honorary citizenship or a celebrity figure, for certificates to be signed at official level," it noted. The inquiry also found that it had been possible to account through the IDA for only £3 million of the £20 million sterling - there was no trace of the other promised £17 million.
It also detailed how the then Secretary of the Department, Des Mathews, stated that he "did obtain from the Department of Foreign Affairs passports for the 11 individuals on 7 December 1990 i.e. the day before the naturalisation certificates were signed".
The report, which was factual in nature and did not make recommendations, also confirmed how statutory procedures governing the payment of fees, the swearing of fidelity to the State and clear evidence of connections with Ireland were not respected. It noted that the "only evidence on the Department of Foreign Affairs file that these people are Irish citizens is a handwritten note on five of the applications that the applicants were to be naturalised". It also notes that there were a number of "errors and discrepancies" in the manner in which the applications were made.
The report also noted that a property at Clonee, Co Meath (Glenmore House) given as the address by the applicants was owned by a company called Cronwell Holdings Ltd. There is no company of that name registered at the Companies Office, Dublin.
Mr Cole was authorised by Mrs Owen to trace the promised investment outside official circles but she did not initiate any further action on foot of receiving his report. It is understood that she was advised that any move to revoke the passports would be open to legal challenge.
Mrs Owen, whose early days in office were dominated by the £3 million Brinks Mat robbery and other high-profile crime, apparently took the view that there was nothing else she could usefully do as moves were already in place to tighten procedures governing the passports-for-investment scandal after the Masri affair which concerned Albert Reynolds.
It is not clear whether Mrs Owen discussed the report in any detail with the then Taoiseach, Mr John Bruton, or whether she made him aware of the Geoghegan Quinn memo.
For his part, it is understood that Bertie Ahern made fresh attempts to satisfy himself about Mr Burke's involvement in the Mahfouz affair before appointing him to the cabinet in June, and once since then. Government sources said last night that the Taoiseach was satisfied, on the basis of these inquiries, that Mr Burke at all times acted with integrity.
Meanwhile, attempts to monitor the promised £20 million investment are continuing in the Department of Justice. By now about £17 million has been traced from various investments including Kerry Airport and Butler Engineering based in Portarlington, Co Laois. Mr Noel Duggan, the principal behind the Green Glens Arena at Millstreet, Co Cork, also received some monies although some of this was reportedly repaid.
About £3 million of the promised investment has yet to be traced.