Clothing firms in the constituencies of the last government's Tanaiste and chief whip benefited when the rainbow cabinet reversed its policy on passports-for-sale just before the general election. Investment in the companies in Tralee and Ballina was facilitated when Rainbow ministers abandoned their earlier determination not to grant any new passports under the scheme.
Firms in the constituencies of the then Tanaiste, Mr Dick Spring, and chief whip, Mr Jim Higgins, benefited.
Sources from the last government said the cabinet changed its policy in three cases to save jobs in the firms, which received investment as a result.
The companies which benefitted were Kerry Fashions in Tralee, Mr Spring's home town; the nightwear manufacturer, Rowear, in Ballina, in Mr Higgins's constituency of Mayo East; and J.A.Hickey & Co, which has a number of operations in Dublin.
The naturalisations were approved at a Cabinet meeting shortly before the coalition left office, overturning decisions made earlier that no applications should be processed pending the establishment of a statutory scheme.
Sources from the rainbow said yesterday that the decision was made on the basis that "more than 500 jobs were at stake" because the companies in question needed investment in order to stay in business, and parties on all sides of Leinster House were anxious that they be facilitated.
Efforts to contact Mr Spring and Mr Higgins last night were unsuccessful.
It is now believed that the entire passports-for-investment scheme, first introduced in 1988, will be scrapped as early as next month.
The Minister for Justice, Mr O'Donoghue, will complete a report on the scheme shortly.
Mr O'Donoghue's report concerns inward investment to date from the scheme and what it was worth in terms of employment creation. It is understood that no effort will be made to replace the scheme with any similar mechanism.
About 50 applications for naturalisation are believed to have been "on hold" in the Department of Justice when the then cabinet approved the three applications.
Because that government had previously decided - in September 1996 and again last March - to allow no new applications under the existing scheme, the three fresh applications had to be sanctioned by cabinet. The applications were examined by the Inter-Departmental Advisory Committee which was established to scrutinise the investment implications.
Meanwhile, a spokesman for the former minister for justice, Mrs Nora Owen, said that, after she took office in December 1994, she completed 29 applications which were on the files from the previous administration.
It is understood that the minister took legal advice from the then attorney general, Mr Dermot Gleeson, and proceeded with the applications because of the contractual obligations involved.
However, she also approved up to 20 other applications - apart from the three last May - from persons who sought naturalisation after she had come into office.
The Tanaiste, Ms Harney, said yesterday that she had always viewed the scheme with scepticism and that she had brought proposals - including a recommendation that it be discontinued - to Cabinet in early September.
In the current economic climate there was no requirement for such schemes, she said. The idea of being able to purchase Irish citizenship in return for investing money was inappropriate.
The Democratic Left spokeswoman on justice, Ms Liz McManus, called on the Government to extend its review of the passports-for-sale scheme "to a comprehensive review of the entire system of naturalisations for non-nationals."
She said the experience of those without money who applied for citizenship was "a web of obfuscation, bureaucracy and delay."
She added: "The problem for many has been compounded by the failure of the Government to implement the terms of the Refugee Act, despite the commitment given in the Programme for Government; indeed, when asked in the Dail this week, the Taoiseach could not even say when the Act will be brought into effect."
See also Fintan O'Toole: page 12