"I am not convinced this scheme should be continued in any form - legislative or otherwise. In its favour is the fact that many businesses which were badly in need of investments have benefited, and it is probable that many jobs have been saved as a result"
Bertie Ahern (with a little of his usual hindsight,when the shit hit the fan))
Passports, a jewelled dagger, a diamond necklace and a mysterious payment for a horse. Charles Haughey's tangled Saudi connections.
The Saudi diplomat, whose lucrative and extensive bloodstock interests extended from Chantilly in France to Florida in the US, was also a brother-in-law of Saudi Crown Prince Abdullah. O'Connell had introduced Fustok to the Haughey family in the early 1980s.
Arising from O'Connell's suggestion to Haughey, Crown Prince Abdullah was later invited to visit the Republic. The visit took place in June 1988 when Haughey was taoiseach.
Later it emerged that members of the then government were grateful recipients of diamond-encrusted daggers as gifts. Haughey and his wife Maureen were reported to have received a jewelled dagger and a diamond necklace. The necklace alone was said to be worth £250,000, but Haughey said the value had been exaggerated.
Former minister for health Dr John O'Connell -- a one-time close associate of Charles Haughey -- reckoned that a £50,000 payment in february 1985 from another Saudi "diplomat" one Mahmoud Fustok, which he personally handed to Haughey, seemed unusual. But O'Connell recalls that he(Haughey) "didn't even bat an eyelid" when he became involved in the transaction.
Apparently this had arisen from a dinner that the former minister had had with his close friend Mahmoud Fustok a few weeks earlier.
The episode featuring Haughey, Fustok and the sale of a yearling to the Saudi diplomat caused the former taoiseach further discomfort at the Moriarty Tribunal . But will Haughey's connections with other Saudi nobles and business people, involving, among other issues, the granting of Irish passports, now come under closer scrutiny?
The question is particularly apt, given speculation about the existence of documentation providing details of such links with hugely wealthy individiuals.
The passports question has yet to be probed in detail by the Moriarty Tribunal, but might it prove to be yet another fertile avenue of inquiry?
Unfortunately there are no records of the bloodstock transaction, although Fustok and workers at the stud claim that it actually took place. Haughey stressed last week that such deals were often done on the basis of a handshake. What is known for a fact is that O'Connell was given £50,000 by Fustok to pass on to Haughey.
In evidence to the tribunal , O'Connell had a clear recollection of what happened next. When told that O'Connell had the payment, the former minister said that Haughey replied "in a gravelly voice ... 'Make it out to cash'". Therefore the recipient and the payee where obscured.
A crony of the late C.J.H. one John Magnier also issued a rapid denial stating that he had never had a direct or indirect interest in Ciaran Haughey's firm Celtic Helicopters. This came after revelations at the tribunal that a cheque for £10,000 from Magnier's Coolmore Stud to former Aer Lingus chairman Michael Dargan had found its way into the account of the helicopter firm. Dargan, to whom the payment was owed in respect of nomination fees for a stallion, denied that he had ever invested in Celtic.
Another fabulously wealthy Saudi Arabian banker Khalid bin Mahfouz, bought 11 Irish passports for friends and family a decade ago.He has been allegedly been a facilitator for those who provided funds to fuel bin Laden's terror network.This has never been established and international newspapers paid substantial damages to him in libel actions alleging a connection with terrorism and Bin Laden.
Khalid bin Mahfouz is the second eldest son of Salim Ahmed bin Mahfouz , a Saudi entrepreneur who rose from being an illiterate moneychanger to the founder of the first bank in his country, the national Commercial Bank of Saudi Arabia (NCB). Salim Ahmed then became the personal banker of the Saudi royal family. He handed management of NCB, the largest bank in the country, to Khalid sometime in the 1980s
In 1990 Khalid bin Mahfouz acquired Irish citizenship through inward-investment procedures. Sheikh Khalid bin Mahfouz, sensationally purchased the Irish passports in 1990 in a (then) secret deal handled personally by the then Taoiseach, Charles Haughey..
The practices of the Haughey and Reynold administrations between 1984 and 1994 are a matter of controversy in Ireland and are being investigated, but there is no question that bin Mahfouz acquired his citizenship legitimately under the procedures applicable at the time.Why he felt he-and his extended family- needed this privilege for , is unknown.
Bin Mahfouz is married with three children. His personal net worth was $3.2 billion in 2006, making him one of the richest people in the world; his family fortune is worth over $4 billion. He has been involved in various business and charitable organizations throughout his life
As Saudi Arabia's largest banker he handled the accounts of the royal family and ARAMCO, the largest oil group in the world, a state-owned Saudi company in partnership with four major US oil companies. He is a named defendant in a $1 trillion lawsuit filed by 9/11 victim families against the Saudi government and prominent Saudi officials who, the suit alleges, were complicit in the 9/11 attacks.
Both BCCI and Mahfouz have historical connections to the Bush family dating back to the 1980s. Another bank (one of many) connected to Mahfouz - the InterMaritime Bank - bailed out a cash-starved Harken Energy in 1987 with $25 million. After the rejuvenated Harken got a no-bid oil lease in 1991, CEO George W. Bush promptly sold his shares in a pump-and-dump scheme and made a whole lot of money.
1988-92: The BCCI (Bank of Credit Commerce International) scandal breaks.
Khaled bin Mahfouz had a 20% stake in BCCI, a bank that went bankrupt a in the biggest corruption scandal in banking historyThe bank is exposed for being a massive criminal enterprise, catering to some of the most notorious villains of the 20th century, including Saddam Hussein, Manuel Noriega, terrorist leaders Abu Nidal, and the Medellin drug cartel and for being involved in money laundering, the Iran contra scandal, and pilfering investors’ cash. At the time of its collapse, Khalid Bin Mahfouz was COO of BCCI, and is eventually fined $225-million to settle felony charges for stealing investors’ money.
A Federal judge sentenced the former chief executive of the Bank of Credit and Commerce International Swaleh Naqvi, to more than eight years in prison and ordered him to pay $255.4 million in restitution in one of the biggest bank frauds in history. Judge Joyce Hens Green gave the sentence to the executive who was at the center of the B.C.C.I. international banking scandal in which thousands of people lost their savings. The eight-year jail sentence was one of the longest given to anyone so far in connection with the bank.
BCCI was founded in 1972 by Agha Hasan Abedi, a charismatic banker and mystic from Pakistan. It grew rapidly, and would eventually boast offices in 70 countries and 14,000 employees. But from the start, it had a taste for opaque finances. It was incorporated in two tax havens, Luxembourg and Grand Cayman, and used two sets of auditors, allowing it to avoid publishing meaningful consolidated accounts. (Sounds familiarly like the new company de-listing irish entrepreneurs of the Fianna Fail golden circle..)
Sheikh Mahfouz's son, Abdul Rahman bin Mahfouz, who was also one of those who obtained Irish citizenship in the 1990 transaction, has been a subject of controversy too. He was a member of the board of a charity called Blessed Relief, based in Sudan. Members of this charity are suspected of having links with an assassination attempt in 1995 on the Egyptian President Hosni Mubarak.
During the late Nineties a number of top Saudi business executives ordered the National Commercial Bank to transfer personal funds, along with $3m diverted from a Saudi pension fund, to New York and London banks. The money was deposited into the accounts of Islamic charities, including Blessed Relief and another suspected front for bin Laden, Islamic Relief, according to the report.
The intelligence sources said the businessmen, who were then worth more than $5bn, were paying bin Laden "protection money" to stave off attacks on their businesses in Saudi Arabia. The money transfers were discovered after the Saudi royal family ordered an audit of NCB and Khalid bin Mahfouz.
Khalid bin Mahfouz first came to public notice in Ireland in the summer of 1994 when the Sunday Independent revealed exclusively that he and an associate had received 11 passports for themselves and their family members in 1990. The circumstances in which the Saudi banker received the passports, in the aftermath of the Kuwaiti invasion, became the subject of considerable public and political debate.
Sheikh Mahfouz was subsequently indicted by a grand jury in New York in relation to defrauding investors of the failed banking giant BCCI. This development raised even more eyebrows, when eventually, in 1994, it was disclosed that he had been granted Irish naturalisation papers.
Documents with the Moriarty tribunal suggested that the Mahfouz passports got a special priority in government circles when their issue came up for decision.
The documents were presented with considerable formality. A special lunch was arranged in the Shelbourne hotel in Dublin, which the then Taoiseach, Charles Haughey, personally attended for the purpose of handing over the documents to the Saudi businessmen.
The paperwork had been handled by the then Minister for Justice, Ray Burke. Burke's involvement later became a serious political liability for him. It emerged that he signed the certificates approving the issuing of the 11 passports on a Saturday and that the requirement of an oath of fidelity was waived. His involvement in the affair was one of the matters which created the pressure that led to his resignation.
Much debate has followed on the nature of the control that Mr Haughey exercised on the passports-for-investment scheme. He was said, even by political rivals, to put prospective investors through the wringer. But there was no requirement under the original scheme to say how many Irish jobs would be created in exchange for the passports.
However, the Mahfouz money that was paid for the passports has been fairly well tracked down. A "substantial" investment (believed to have been as much as £4m) went into a company called Leisure Holdings which was chaired by the head of the Kerry Group, Denis Brosnan, and backed by a number of senior Irish businessmen, including John Magnier and JP McManus.
.It emerged that some £3 million of the sheik's money was invested in Kerry airport. Coincidentally the company was also chaired by Brosnan. Another shareholder in the airport was Kerry businessman Xavier McAuliffe, who later invested £50,000 in Celtic Helicopters.
Ironically, one of the biggest investments made by Leisure Holdings was in the David Lloyd chain of tennis clubs in Britain, hardly in line with the Irish job creation or job maintenance fundamentals of the passport scheme.
The sheik's associate Raschid Kahloon, who served on the Leisure Holdings board after the Mahfouz investment, was one of those who received passports. Kahloon was to cease involvement with the firm in the early 1990s when his connections with the Bank of Credit and Commerce International were revealed.
Money also went into the local entrepreneurial efforts of Noel C Duggan in Millstreet. However, Mr Duggan hastened to point out that this investment was later bought out.
Mystery surrounds the ultimate destination of other funds invested by the sheik.
The Saudi cash also went into Portarlington structural steel firm Butler Engineering, run by the late Pat Butler, a strong supporter of Mr Haughey and Fianna Fáil.
As far as is known, Khalid bin Mahfouz never lived in Ireland as the original passport documents required him to do. He is known to have bought a house in Ireland, however, and listed this as his address when the grant of the naturalisation papers was listed in the Government publication, Iris Oifigiúil.
He and the other passport recipients named Glenmore House, Clonee, Co Meath, as their local residence. The house was the former home of a well-known Irish industrialist, Denis Coakley, who died several years prior to the passports affair.
It emerged that Mr Haughey wrote a letter of resignation after Dr O'Connell met him in a private house and discussed the £50,000 Fustok payment a month before Haughey stood down as Taoiseach.
(Based on an article in the Sunday Independent Dec 30 2001)