A special unit set up by the British government to monitor terrorist funding in Northern Ireland complained to Irish officials in 1994 that the Irish state was not doing enough to address the Republic’s “serious terrorist finance problem”.
The director of the Northern Ireland Office (NIO) Terrorist Finance Unit, who is not named in declassified documents released this week, was frustrated that Irish officials seemed “unaware of any problem with the manipulation of terrorist funds in the Republic of Ireland”.
The NIO official said the Irish mistakenly believed that “whereas terrorist influence in Northern Ireland was pervasive, in the Republic of Ireland subversives had very little influence”.
The comments came against a backdrop of British dismay that new Irish legislation designed to crack down on money laundering did not, in their view, sufficiently address the funding of terrorism
According to the minutes of the meeting, the director “outlined some republican terrorist cross border financial activities”.
Thomas “Slab” Murphy and another businessman in the Border area were identified as having “carried on large-scale fuel and other smuggling for a number of years”. Murphy “in particular was known to have opened and closed companies in the Republic of Ireland as part of a complex fraud. The scale of these activities was in multi millions and could reasonably be regarded as damaging elements of the economy of the Republic of Ireland,” the director wrote.
The official urged his Irish counterparts to follow the example of Northern Ireland where, he explained, “engaging in the financing of terrorism was treated as severely as drug trafficking”.
In September 1993, then minister for justice Máire Geoghegan-Quinn had given her counterpart Sir John Wheeler an assurance that legislation she was introducing “would incorporate a new offence of money laundering and would cover terrorist money laundering”.
However when NIO officials were briefed on the bill in early 1994, they were disappointed to learn from Irish officials that “the confiscation and money laundering provisions of their current bill will not apply to the proceeds of terrorist activities, the resources of terrorist organisations, or money that could be applied for acts of terrorism”.
British officials pondered three options for their minister Sir John Wheeler. He could, they advised, “justifiably take offence at Mrs Geoghegan-Quinn misleading him last September that her bill would extend to terrorism when it does not”. He could “simply leave the matter to the Irish: over time they may well come to recognise the problems they are creating for themselves”. Finally, they recommended as the best option “a further meeting at official level seeking to convince the Republic of Ireland officials that there is more work to be done by them in the area of terrorist finance legislation”.
In 2016 Murphy, a member of the IRA army council and for a period from 1997 its reported chief of staff, was sentenced to 18 months in jail after being found guilty of nine counts of tax evasion.