Seanad Éireann debate -
Wednesday, 4 Mar 1998

Vol. 154 No. 11

Passports for Investment: Motion.

Mr. Quinn

I move:

That Seanad Éireann, mindful of the need to maintain Ireland's standing in the international community, calls on the Government to introduce legislation to outlaw the issue of Irish passports as a quid pro quo for investment in Irish enterprises.

I move the motion against the background of two events. I feel strongly about this matter and my view on it is different from that which I would have expressed five years ago. Those two events were partially responsible for my change of view and I would like to convince the Government to change its view also.

The first event is our imminent acceptance as a founding member of Economic and Monetary Union. That should remind us very forcefully we are now playing in the big league. From now on, our behaviour must reflect our new status and we must accept our responsibilities as a nation.

There was a time when we could use our economic condition as an excuse to do anything we liked. We used to beg funds from Europe and get derogations from any European regulations which did not suit us. We used our condition to set up a tax regime for inward investment which gave us a competitive edge over our EU partners. Our mindset has been that nothing should stand in the way of the creation of even one job. That was an appropriate attitude ten years ago but I want to convince the Minister and the Government that is no longer the case.

We have the fastest growing economy in the world. We create 50,000 jobs every year and we are already having problems filling some of them. We can no longer justify bending any rules or engaging in any dubious or devious practices to create jobs. We must continue to create jobs, of course, but we must also live up to our responsibilities as a prosperous member of the European Union and EMU. We should make the selling of Irish nationality illegal because the time has passed when we could behave as a cowboy state, like some Latin American banana republics.

The second aspect is the recent controversy concerning Irish registered non resident companies. The public was shocked recently to find these vehicles are being used by money launderers and drug barons from around the world. Similar to the sale of Irish passports, these non-resident companies are a threat to our international standing. Selling passports is one side of the coin and allowing letter box companies to use our good name is another. The widespread public concern about the recent revelations concerning non-resident companies extends also to the sale of passports. The same issues are at stake in both areas.

The motion calls specifically for legislation to ban the sale of passports. I wish to explain why we must take the extreme step of making this practice illegal, with no exceptions whatsoever.

We have had a passports for investment scheme since 1988. It was a very different world then. Our economic recovery was just beginning and it may have seemed reasonable to look for any way to bring in outside investment and create jobs. In addition, there were many rich people in Hong Kong who knew its days as a British colony were coming to a close and were beginning to look for another base. It may have seemed reasonable at that time to try to attract some of that wealth.

However, as I said, the world has changed in the past ten years. Our recovery took off and we soon passed the point of needing last ditch measures, such as the sale of passports. The rich Chinese chose, for the most part, to go elsewhere.

However, two other things also happened. The international drugs trade continued to grow but had to work harder and harder to launder its money, as governments worldwide started to make life tough for it. At the same time the collapse of the Soviet Union created a tidal wave of crime and corruption that soon spilled over into the rest of the world. The result was that there was a whole new class of customers for schemes like selling passports and offering facilities for dummy companies. Some of those came to Ireland. I do not suggest that everybody who got an Irish passport in return for a promise of investment was a dubious character. I am sure some of them are quite genuine and have become upstanding Irish citizens.

One of the problems, however, is that the vetting system — such as it was — was apparently unable to distinguish between the desirable and the undesirable. The upshot is the horror stories we have all seen from time to time in the papers and, more importantly, which the rest of the world has seen as well. We should all be worried about this fact. The exploits of a few highly colourful characters have created a widespread impression abroad that Irish passports are easy to come by if you have enough cash to put up front. The damage that this does to our international reputation is incalculable.

This bad publicity happens despite some efforts by successive Irish Governments to keep the scheme as quiet as possible. Nobody was very happy with it from the start, especially the Civil Service. But still it continued, giving rise on the way to one or two highly publicised scandals that no doubt we will hear more about in the course of this debate. Eventually, in September 1996, the scheme was suspended pending a review of all the ramifications of the scheme. The review seems to be still going on. The general expectation is that there will be proposals for a more tightly regulated scheme that will be enshrined in legislation.

However, despite the fact that the scheme was meant to be suspended, some passports continue to be issued in return for the promise of investment. The circumstances appear to be that, in the run up to the last general election, some passports were issued because they carried the promise of job creation or job retention in some key constituencies. Whether this is true or not, the Cabinet of the time did overturn the suspension of the scheme and allowed a number of passports to be issued.

I want to be realistic about this, particularly as there are local elections coming up. Elections put tremendous pressures on politicians and they tend to reach for whatever means are available to them. Giving Ministers and Governments the power to issue Irish passports in this way is putting too strong a temptation in their way. In the short life of this scheme there have been questionable incidents involving two Taoisigh and a Tánaiste. That clearly shows this is a temptation that can go right to the top. Any legislation that regulated the sale of passports, however tightly, while still leaving it open as a last resort for decisions to be made at the discretion of individual Ministers or even the Government as a whole should be unacceptable. We can cast the net even wider than that, bypassing the political problem altogether.

The key issue here is Ireland's international standing. A reputation is something you either have or you have not. It is a question of absolutes. The outside world will perceive us as either selling passports or not. The outside world has no time to spare for a complicated concept like "Ireland does sell passports but it controls the sale very carefully." Even if true, it is not a believable stance. Therefore, we should legislate and legislate promptly to outlaw the sale of Irish nationality altogether.

I conclude by considering a possible objection to this forthright approach. Over the past number of years the IDA has done a wonderful job in attracting business to Ireland and I congratulate them for it. But the IDA will object to such a ban and say it may inhibit inward investment into Ireland. They are already saying that about the non-resident companies, even though they do not have a leg to stand on. We have to be able to say to the IDA in a forceful manner that we are not prepared to buy inward investment at any price.

Just as we are not prepared to compromise our environment in order to attract undesirable investment, we should be prepared to tell them that we are not prepared to compromise our nationality either. In any case, the number of jobs that could be created by selling passports is tiny in the context of the overall flow of inward investment.

The time has come for us to stop compromising our principles. In Ireland, of all places, we should be more proud of our nationality than this scheme suggests. We should reserve the privilege of Irish citizenship strictly for those who pursue the traditional naturalisation route. We should award citizenship solely on a proven record of commitment to this country, as demonstrated by a history of residence here.

In turning our backs definitively against this cowboy practice we will be making a choice. Do we want to be seen as a full mature member of the European Community, ready to live up to all the responsibilities that implies; or do we want to be seen as a fly-by-night State that is prepared to sell even the symbols of its sovereignty to anyone who turns up on its doorstep with a big cheque? I believe we have no choice in this debate and commend this motion to the House.

Mr. O'Toole

I congratulate Senator Quinn for moving this motion. Many people are concerned with this issue. I have never understood how this system works. How does the passport for jobs system work? Are people being persuaded by the IDA to invest in Ireland because they have been offered a passport? Have we reached the situation where we are now attempting to give the impression of a modern, mature democracy which has found its place in economic growth and development? Is this image being brought forward by handing out passports to people investing in this country? I believe we will be facilitating, by the continuation of the passports for sale regime, a bona fide, money laundering system for hot money from various parts of the world. I do not like the fact that this money is finding its way into the Irish economy and is untraceable. We should be walking away from such a situation as there is no longer any need for it. We should be dealing with the needs of today, the image we are trying to project and the future we are trying to give our young people.

Passports have to be a symbol of independence, nationhood, nationality and something about which we can pride ourselves. This cannot be the case if passports are being bought and sold, if passports are being made available to foreign nationals who have no commitment to the country, if passports are being made available to people who have not gone through a process of naturalisation or have not shown a commitment to being Irish citizens and all that that entails.

When I think of passports being bought and sold I conjure up an image of a B movie of the 1950s where people in shady circumstances are trading with each other and finding a sheaf of passports to use. What is the European position on all of this? How many European passports may one person hold? Is there any limit on the number of passports which an individual who is a citizen of the European Union can hold? Is there any limit on the number of other passports from outside the EU jurisdiction that such a person can hold? What does European citizenship mean when we provide Irish passports to people who have the money? What kind of people are we attracting with this scheme? Do we have to give a passport to the head of IBM? Do we have to give a passport to the head of blue chip companies who want to invest in this country? Did we give passports to the major computer firms located in this country? I think not.

This scheme is being made available to people who are less than appropriate for this type of involvement. What does it all mean? Does it mean that these people who were not born in Ireland, and whose parents and grandparents were not born here either, can get a passport if they have £1 million for investment in this country? When this question was previously discussed it was not clear that the commitments given by applicants for passports were honoured.

Senators and Deputies from all parties have expressed their misgivings about this scheme. We cannot prostitute our citizenship, our nationhood or our passports in an unnecessary attempt to attract investment. We have allowed our passports to become a flag of convenience for people who wish to establish international reputations for themselves and who find it convenient to wave an Irish passort. There are corners of the world where holders of Irish passports receive a welcome which would not otherwise be there for them.

A certain aura and magic attaches to Irish citizenship. If word goes out that this can be bought, the integrity of Irish citizenship will be diminished. An ordinary Irish citizen is required to jump through more hoops in order to receive a passport than a foreigner with a large amount of money. An Irish citizen must have forms signed by a member of the Garda and furnish proof of identity. This scheme makes a nonsense of equality in the eyes of the law. Citizenship is a birthright. One cannot put a monetary value on citizenship. It cannot be traded. Since the foundation of the State judges have stated that one cannot put a price on a constitutional right. Neither can we put a price on citizenship. This is what the passports for sale scheme seeks to do. It must be ended.

Mr. O'Donovan

I move amendment No. 1:

To delete all words after "Seanad Éireann" and substituted the following:

"(a) Welcomes the contribution made to the Irish economy by non-nationals who have invested in Ireland, many of whom were subsequently naturalised.

(b) Notes and welcomes the fact that, since his appointment, the Minister for Justice, Equality and Law Reform has suspended the operation of the scheme for naturalisation arising from investment pending a review which will be determined by Government shortly.

I concur with many of the views expressed by my colleagues across the floor. I am not privy to the Minister's mind nor to the deliberations at the Cabinet table but it is my understanding that this matter is under review and that a decision will be taken by the Government when that review has been completed. Each application for naturalisation will be examined individually. Applications for naturalisation must be fully scrutinised and I would not accept that money acquired by illegal activity, whether from drug trafficking or not, should be brought into this country.

There are, however, parts of the country which would be disadvantaged by the abolition of the scheme. I would caution that all aspects of the question be looked at. I see huge potential for job creation and development in the mariculture and aquaculture industries throughout rural Ireland. If such an industry in the west of Ireland could be kick-started by a considerable foreign investment and if the source of the investment was properly scrutinised and controlled it might be a good thing. A fish processing factory in my own area requires an investment of £8 million. This factory would provide 200 jobs. We are told that European money is fast disappearing and there are parts of rural Ireland where the Celtic tiger has never been seen.

Despite the fact that tourism is our fastest growing industry and that it will soon supersede agriculture it still requires considerable investment in peripheral areas far from the Pale. My constituency, which runs from Cork city to Castletownbeare, does not have a single mile of national primary route. The late John L. O'Sullivan fought for this for many decades without success.

I have been involved for many years in a national monuments committee. Our budget from Cork County Council is less than £100,000 per annum. Throughout our county there are archaeological sites and buildings of historical and architectural interest which could be protected and restored. Hundreds of such projects in County Cork alone fight for a share of the paltry budget. Foreign investment could be channelled into these areas which have been neglected by successive Governments.

I urge caution. The Government proposes that the operation of the scheme in the period 1988-96 be examined. In a written answer to Deputy O'Keeffe in the other House, the Minister stated that from 1988 to 1994 an annual average of 250 applications for naturalisation were reported and logged in Iris Oifigiúil. Excluding the passports for sale scenarios, how many Irish passports have been issued to rich people from abroad? How many jobs, if any, were these people responsible for creating? If jobs were not created, why is that the case? The notion of issuing a person from China or Hong Kong who invests £2 million in Ireland with a passport and wishing them good luck makes Senator Quinn's case. That is not adequate or sufficient and I do not condone such behaviour.

There is merit in reconsidering the scheme and carefully reviewing how it has worked to date. As Senator Quinn stated, in 1988 the Celtic tiger had not yet been born. I accept his point but who can say whether the situation which prevailed in 1988 will not revisit us during the next ten years? Do we close off and totally abolish the scheme per se or do we appraise the matter and consider how many passports were issued, how many jobs were created and identify the areas of the country which benefited? No millionaires have settled in my area and created employment.

The scheme should be reconsidered. If it can be maintained in a strict fashion and if, in conjunction with the IDA which probably backed its initial introduction, it promotes the creation of jobs, the scheme should not be completely abolished. As already stated, the amendment to the motion indicates that the Government is reviewing the matter and the issue of seized passports has been put on ice. Consequently, we should wait until the report is made available by the Minister to the Cabinet.

Mr. Manning

I compliment Senator Quinn on proposing this motion. The case he made is persuasive, all the more so for the restrained way in which he put forward his views. It would have been easy for the Senator to court headlines by quoting some of the more lurid examples of what occurred under the provisions of this scheme. He chose instead to adhere to the level of principle and international best practice and his case was all the stronger for it.

Senator Quinn was honest enough to state that his views on this issue have changed diametrically in recent years. There is no doubt that the scheme was popular with business people when it first came to public notice which is the way it should have been. The scheme represented free money, interest free loans and investment without any strings attached. It was perceived as manna from heaven and welcomed, particularly by those with good ideas who could not find funding elsewhere, those with businesses going through sticky periods and those, as Senator O'Donovan stated, in areas where investment was needed.

I have no doubt that many honest people availed of the scheme over the years. I have no doubt that inward investment provided through the scheme came at a time when such investment was scarce. I do not doubt that jobs have been created and saved through the scheme, that shaky companies have been propped up and stabilised and that financial aid not otherwise available was made available during difficult periods. I accept that the scheme was conceived in good faith at a bleak time in the country's economic history. I also accept that it was in no way unique to Ireland because other countries sought to attract valuable capital investment, particularly from Arab and Pacific Rim countries and Hong Kong, which was facing an uncertain future.

Senator Quinn referred to the level of political pressure exerted when a scheme of this sort is in operation. Perhaps he has less experience of that than those of us who belong to political parties. All Members have experience of being lobbied by often desperate people whose only chance to save their businesses and jobs depended on the availability of finance through this scheme. Enormous pressure was exerted on Governments by Deputies, Senators and community groups. At times it was almost heartbreaking when one could see the consequences of an investment which would save real jobs for real people as against the consequences of that investment not being made available. From my experience and that of others, I have no doubt that the greater part of the pressure from Deputies and Senators in respect of passports came in the context of saving real jobs for real people.

That said, however, I believe there is no continuing justification for the scheme. I say this for two reasons. First, from a national point of view, it is demeaning. A passport is a badge of identity and nationhood, it is not a single transferable option or something to be bought or sold. It is something which demands loyalty and commitment from its holder and, most emphatically, it is not something which can become part of trade and barter. At this stage of our economic development, whatever reasons there may have been for this scheme in the past — Senator Quinn outlined these earlier — are no more. In our present economic prosperity and state of development, we should and must be able to stand on our own and we should have no need for schemes of this nature.

The second reason I oppose this scheme involves its history. Between 1988 and 1994, the scheme was virtually a State secret and was operated personally by the Taoisigh of the day, Mr. Charles Haughey and Deputy Albert Reynolds. We know of some of the things that happened during that period. That we know is no thanks to those who operated the scheme. It was not one of the secrets they chose to share with us. In those days, the scheme was the antithesis of openness and transparency. It led to justified public suspicion which was accentuated by the obvious lack of accountability. Apart from short and obscure notices in Iris Oifigiúil, there was no mechanism to inform the public of what was happening. There was no way of assuring the public that the people being granted the privilege of an Irish passport and all that goes with it were honest. There was no guarantee that these people did not have criminal or unsavoury connections, that there was a rigorous vetting of applications or that, in the process of granting passports, bribes were not offered or received.

The operation of the scheme may have been as pure as the driven snow but, if it was, why the secrecy? Why hide what went on? There is no doubt that in the minds of most ordinary people a cloud of suspicion hangs over the scheme. There is also no doubt that the widespread publicity which the abuses and excesses of the scheme have attracted worldwide have done our reputation for fiscal probity considerable harm.

Since 1994, the circumstances in which the scheme operates have been changed and tightened up. The level of scrutiny of schemes and applicants has been placed on a formal and multidepartmental basis. The level of scrutiny and vetting is now much more intense and the number of applications granted has decreased dramatically. However, no amount of tinkering with the scheme will make it acceptable because it is fundamentally and intrinsically unsound. The scheme is open to misunderstanding, misrepresentation and corruption. There is something about it of the huckster prepared to sell a birthright for a doubtful gain. I want to see the end of this scheme.

I do not believe, as Senator O'Donovan suggested — although in my opinion he shares the concerns of Members on this side of the House — that a better, safer form of the scheme is possible. The Government has had enough time to consider the scheme and reach a conclusion. As I understand it, Senator Dardis's party had serious doubts about the scheme when in Opposition. What I am saying now, he could have said from this side of the House a year ago. I will be interested to hear if he shares the views I have expressed.

We have gone too far to tinker around with the scheme. The principle of the scheme is unsound and, as Senator Quinn said rightly, we cannot afford to be viewed internationally as less than 100 per cent honest in the way in which we conduct our financial business. The scheme is a source of scandal for many. It demeans public life and is beyond redemption.

Mr. Dardis

The fundamental question posed is the price of citizenship, the right to vote and to carry a passport. What price would the founding fathers of the State have paid? In many cases they paid with their lives to ensure that we have the right of citizenship and our own sovereignty. In such circumstances, is it appropriate that anybody should be able to inject a large sum of money into the economy and be granted a passport and citizenship as a result? My party's view is that such a facility should not be afforded.

There is another issue at the heart of this matter. Do we apply one standard to a person fleeing from persecution who arrives seeking asylum or as a refugee who is granted the right to stay? Should they get a passport without going through the due process and without having to fulfil the residency requirements? On the other hand, do we turn a blind eye when a lot of money is involved? At a time when much inward investment was required one could understand the background to and the reasoning behind the scheme's introduction. However, it is a bad scheme and it should be ended.

As I understand it the Government is conducting a review of the scheme and I hope that review will be concluded rapidly, that we will be made aware of the results and that the scheme will be ended. There is a category of persons in a somewhat anomalous position. Some people may have applied for citizenship or a passport but because of the suspension of the scheme those applications have not been processed. They should be adjudicated upon, one way or the other, before the scheme is ended. The people involved applied on the understanding that the scheme was in place and they would be able to avail of it. We await the review and hope it will end the practice.

I do not believe legislation would be required to end the scheme. It should simply be brought to an end. There is no legislative basis for the present scheme as I understand it, although I am open to correction on that point and I am sure the Minister will clarify the matter. I accept Senator Quinn's points about the responsibilities which EU membership imposes on us and the citizenship of the EU which is additional to Irish citizenship.

The other fundamental point at issue is why the applicants under this scheme need the passports. What is it that makes a US citizen, for example, want an Irish passport? I do not understand the reasoning for it. It has been suggested that if they were travelling in the Middle East they would not want to produce an American passport in certain countries and that an Irish passport would be more acceptable. If that is the case it is a strong reason they should not be granted a passport. If an Irish passport has that credibility in certain states, which I believe it has, it is a precious commodity and must be protected in the interests of the wider society of legitimate Irish citizens carrying Irish passports.

Senator Manning referred to vetting. I wonder if in the past the vetting was as rigorous as it might have been in the context of large sums of money being involved. It is easy to fill in the forms. We have heard of cases in which it is alleged that people bought homes in which they never lived but which were just a means of complying with the technicalities of the scheme. Some did not even do that and that there was not the degree of control or vetting there should have been.

It is easy to dangle the carrot, so to speak, and to defend doing so on the basis of the jobs created by the money brought into the country. However, that is not a good enough reason for the scheme. Senator Manning is right to say that there were community activities and industries on a knife edge and the money was badly needed. In such circumstances it was surely the State's obligation to provide funds under schemes exercised by it, rather than getting money under this scheme. Thankfully, because of our economic buoyancy, we have resources to intervene to help such companies. That is how it should be done rather than by the sale of passports. It is as if there were a pot of gold at the end of the rainbow and it did not matter how we got to it as long as we did so.

It would appear that there was a degree of secrecy involved. I am sure there were commercial confidentialities involved. However, there should have been transparency, if only to the extent of publishing widely the names of those who had made applications. This might have alerted someone in the police, for example, who might have known if something was wrong. For example, the scheme might have been a means of routing money into the country, paying a commission on it and routing it out again on an illegal basis. Such activity would undermine our international financial reputation.

I hope the scheme will end. I am prepared to wait for the review to be conducted. In the meantime the applications which are outstanding, in some cases for a considerable time, should be adjudicated upon.

Mr. Coghlan

This motion is about the need to maintain Ireland's standing in the international community and it calls on the Government to introduce legislation to outlaw the issue of passports as a quid pro quo for investment in Irish enterprises. This practice does not help to maintain our international standing. There have been many articles about apparent abuses of this scheme and, more recently, there have been articles about the Irish registered non-resident companies which are also damaging.

This is a dubious practice. It should not be necessary to legislate to end it because the right to a passport is the right of every Irish citizen. It is first mentioned in the Ministers and Secretaries Act, 1924, where part of the business of the then Department of External Affairs is stated to include the granting of passports and visas. In the normal course passports are not issued to nonIrish citizens. Therefore, citizenship is a precondition to obtaining a passport. There is something basically wrong with selling citizenship. Apart from being wrong, it is not needed in a practical sense because the so-called Celtic tiger is bounding, leaping and roaring ahead and there is no need to compromise with regard to citizenship. As Senator Manning and others said, a passport is a badge of identity, a symbol of nationality. We do not have to allow people in overnight without being naturalised and provide them with Irish passports. Equally, we should not allow citizens of other states to adopt a flag of convenience as it suits them simply because they are in a position to buy it under this so-called investment for naturalisation scheme.

There have been abuses and excesses, and big names within and without the State have been involved. The scheme has been brought into disrepute and it has damaged the country. For example, on 4 September 1992Iris Oifigiúil listed 11 Saudi Arabian and Pakistani nationals who were granted certificates of naturalisation on 8 December 1990. All gave an address in County Meath and apparently no one has lived there since 1990. The awarding of a passport is supposed to be directly linked under the scheme to specific job creation projects. The supposed project in this case was linked, according to the IDA, to investment in an equestrian centre. When did the IDA become involved in the horse business? Yet, four years later Meath County Council was in a position to confirm no application has been made to it for such a development.

Each application for naturalisation must be accompanied by character references from three Irish citizens. In this instance, the Department of Justice, when asked afterwards to provide the names of those who proposed the 11 individuals or the group in question for naturalisation, either collectively or individually, refused to supply the information. It was also asked how much investment was made and where and when it was made. Again it refused to supply the information. Two of the 11 people to whom Irish citizenship was granted together with the National Commercial Bank of Saudi Arabia were sued by the liquidators of the Bank of Credit and Commerce International in regard to its collapse. This was a huge banking scam and scandal involving two principals who were accorded Irish citizenship on foot of references from three Irish citizens, who presumably testified to the effect that they had an intimate acquaintance with the applicants and could vouch for their good characters. However, the Department of Justice, Equality and Law Reform still refuses to divulge the who, when and where surrounding the applications.

An applicant apparently is required to provide on the application form particulars of any proceedings, civil or criminal, taken against him or her in courts of law in this State or elsewhere. Was this information supplied and, if so, was it accurate? The normal procedure for the issuance of certificates of naturalisation is that they are signed by an appropriate official at Secretary level in the Department, yet in these cases the certificates were signed by the then Minister for Justice. The granting of these passports was made in highly unusual circumstances and apparently in breach of statutory regulations.

A number of questions remain unanswered. Why was such an extra special interest taken in these passport applications? Who oversaw the details and arrangements leading to the granting of those passports? Who were the three people who provided character references in the case of each of the applicants? Given the manifest wealth of the individuals in question and the apparent hands on involvement in the issuance of the passports, what level of investment were the individuals to make in return for them? Was the investment to be a global figure for all, or was each to make an individual investment? Was there ultimately any figure invested in a project? If so, what was the figure and with what was the project concerned? Did the individuals whose names were listed in Iris Oifigiúil ever visit the country or live here and, if they did, how long did they stay?

These are legitimate questions which should be answered. The refusal to answer them not only shows a brazen defiance, but a contempt of the legitimate right to know proper procedures were in place and if they were followed. It also leads to a justifiable suspicion that something serious was amiss. The questions will not go away. At what stage did responsibility for the issuance of the passports transfer to the then Taoiseach and who was the official in his Department with responsibility for the issue?

In the past, former Deputy Michael McDowell, was scathing in his criticism of the scheme and enunciated eloquently on the matter. How does the Tánaiste stand on the issue? A number of other passports were issued at various times involving big names in this State. We have seen by virtue of self-evident abuses that it was a foolish exercise for us ever to be involved and it has proved rather demeaning. How can we sell a constitutional right?

Mr. L. Fitzgerald

I wish to share my time with Senator Walsh.

Acting Chairman (Mr. Cregan)

Is that agreed? Agreed.

Mr. L. Fitzgerald

I support the amendment but I have reservations about the operation of the scheme. The perception abroad in regard to it tends to underline that the investment based naturalisation scheme is being hogged by international shysters and shady businessmen to launder their ill gotten gains among an unsuspecting Irish business community. Given recent controversies and the difficulties experienced in making the scheme more effective, less controversial and more transparent, the view has gained currency that successive Governments in a clandestine manner — Senator Manning probably does not agree — conspired to promote the continuation of the scheme at serious risk to the integrity and international status of the Irish passport.

While I reject these allegations and assertions, there are fundamental difficulties with the operation of the scheme. Obviously, the Minister agrees because he saw fit to suspend its operation pending a review. One of the main difficulties in regard to the operation of the scheme is an effort to strike a balance in a pragmatic way between the need to encourage inward investment on the one hand, and, on the other, to ensure the operation of the scheme in promoting such funding does not in any way damage our reputation internationally and the status of the Irish passport. It is extremely difficult to strike such a balance, but nevertheless to advocate, as the motion does, that the scheme be scrapped and outlawed is not founded on a great degree of pragmatism and, as politicians, we must be pragmatic.

However, that is not to take away from the merits of many of the views expressed by Senator Quinn, Senator O'Toole and Senator Manning about the need to uphold at all times the highest integrity with regard to our passport in the international arena. Our passport has a good status and is held in high regard internationally, which is one of the primary reasons for the high level of interest among foreign entrepreneurs in investing in Ireland — they are anxious to avail of an Irish passport. In the past the process was too simple. As Senator Manning said, we do not have much information about the operation of this scheme, which seems to be the position internationally also.

We are not alone in operating such schemes — the Canadians operate one which is highly successful. I do not have the full history of the scheme, but some years ago Canada identified a problem with inward investment and this scheme was extremely successful in attracting investment from abroad.

We must strike the pragmatic balance referred to at the outset. The scheme can continue but significant reforms must be made. One way in which public confidence can be won and maintained is by making the scheme more transparent. It cannot be reduced to the point where one discloses details of the applicants because an individual has the right to privacy until his or her application is processed by a Government Department.

Mr. Norris

Why?

Mr. L. Fitzgerald

That right applies across the board. However, an annual report should of necessity, be laid before the Dáil on an ongoing basis, outlining the operation of the scheme. This report should ensure on the basis of published criteria that the scheme as it operates is beyond reproach. If that pragmatic balance can be in struck I am in favour of its continuation.

Mr. Walsh

Táim in aghaidh an rún agus aontaím leis an leasú. I agree with much of what Senator Fitzgerald said. A number of speakers said the present system is open to abuse, that an element of bribery and corruption is attached to it as a result of maladministration and that people of ill-repute have availed of it. Such problems must be corrected because the efficacy of our financial system and the reputation of our country is at issue. Passports must be protected and valued and the administration of the scheme should reflect that.

However, there is another side to the coin. We do not have sufficient information to evaluate everyone who participated but I am aware of companies fortunate enough to have availed of finance as a result of the passport scheme, some of which could have gone into liquidation with the loss of a considerable number of jobs. The challenge to us is to devise a system which eradicates the failures of the present scheme but preserves what is of value. The economic climate is good at present but we do not have to cast our minds back too far, only a decade, to find different economic conditions where inward investment was critical to generate economic activity and address unemployment.

The Minister's approach is to suspend the operation of the present scheme pending analysis and review. I hope that from this will emerge a new, streamlined scheme which will ensure that bona fide investments will be preserved and that only people of good repute will qualify. It is essential that we do not become too self-righteous; there is a danger that we react to the latest headline and throw out the baby with the bathwater, so I urge caution.

Mr. Norris

I will first refer to the remarks of the Fianna Fáil flying column, Senator Fitzgerald.

Mr. Dardis

The Senator is out of order.

Mr. Norris

I know I am but I cannot help it, it is part of my constitution. I have an Irish passport and do not have to apply for one, so I am all right.

Mr. Dardis

Senator Fitzgerald is not here to defend himself.

Mr. Norris

Shame on Senator Dardis for drawing attention to his absence. I referred to him as the flying column but the Senator has revealed him in all his political nakedness. Senator Fitzgerald said that no information should be divulged about these people in advance of being granted passports. Why not? What about freedom of information? Why should we not know? I understand the argument for concealing someone's identity when he or she is accused of a crime but has anyone suggested that the possession of or the desire to possess an Irish passport is itself criminal? No one here would want to sustain that argument. If they are bona fide applicants why should we not know who they are and why they want an Irish passport? I want to know why people of such eminence want our passport.

I am glad to see the opening of a division on the other side of the House. I honour Senator Dardis for his honest examination of the subject, although I regret he took one of the points I intended to make. However, I will elaborate on it because he has isolated the principal moral dilemma. Some of these people are pretty unsavoury but one thing they all have in common is enormous amounts of cash and a belief that they can purchase an Irish identity, or at least an Irish passport, for this money. They are handled with great deference, courtesy and considerable rapidity. We also know of a large number of people who undoubtedly have cast iron cases for asylum — I have half a dozen on file. They are members of prominent families in, for example, north African countries. They are professional, highly skilled people, many of whose relatives have been butchered because of their political opposition and there is no doubt that they will be killed if they return home. But they continue to wait for a determination on their asylum.

At the same time, we cavalierly dole out passports to people like Mr. Kozeny, who caught the attention of no less a newspaper than the Sunday World. The paper's story is headlined “Pirate of Prague buys Irish passport” and appears in the issue of 15 February. The Sunday World probably followed up a story about this man in The Guardian, which shows he is of considerable interest to both Irish and British newspapers. He recently bought a house formerly owned by Sir Andrew Lloyd Webber, calmly paying £12.5 million for it. He is an obscure person who cashed in on the distress of his country, the Czech Republic. He is an asset stripper who made £300 million and spends it with vulgar ostentation. He recently went to the La Givroche restaurant in Mayfair, where he started off with a £560 bottle of Krug champagne, followed with lobster mousse, accompanied by a white Burgundy costing £1,400, then a bottle of Romanée Conti costing £5,000, a Chateau Haut-Brion costing £2,100, and a Chateau d'Yquem costing £1,070, at which point he was obviously going downmarket. He spent £13,000 on one meal. He is perfectly entitled to do that, but this is money he obtained from pensioners by means of dubious advertisements in Czech newspapers. He got hold of the miserable little bit of investment that was allowed after the deregulation in Czechoslovakia, £25 for each certificate and this man hoovered them all up and then managed to get away with the proceeds. He is afraid to go back. Apparently he makes little hit and run expeditions to Prague and conducts business meetings on the tarmac at Prague airport. He has been accused of using insider information to make these enormous amounts of money. He is currently speculating in those other distressed countries, Russia and China. This is someone to whom we are quite happy to give citizenship.

It was noted in The Guardian that three years ago he traded his Czech nationality for an Irish passport and bought a house in Ireland. Are we proud of that? Is that the kind of person we want? What has he done in this country? The Government side have no idea of the schemes he has been involved in. I have not heard of any of them. I have heard generalised vague talk about some businesses being supported by my colleague from Wexford but he did not specify them. Businesses were saved because of a last minute £1 million intervention. They will not last long. Why does the Government not intervene? Why are we waiting for these fly-by-night speculators to come in and prop up Irish jobs? If those jobs are capable of sustained development then the Government should prop them up. There is a stink about the whole thing.

Even when there is investment, we all know perfectly well that it is attracted by politicians. It is as perks for their international playboy friends and they direct the investment into their own constituencies for personal electoral advantage. They are not that worried about the welfare of the country. James Joyce had it right when he said there were people who would not only sell their country for fourpence, but they would get down on their bended knee and they would thank the almighty Christ that they had a country to sell. That is exactly what is happening in this passports for sale scheme. At least the various Governments who have indulged in it have commanded a reasonably appropriate price of £1 million, which is a good deal better than when they were flogging them out of the basement of the Irish Embassy in London for £10. That is the difference between the gentleman amateur and the professional. The various Governments have been professional sellers of their own birthright.

Senator Dardis asked the question why do people want these passports. This is a good question to ask, particularly if they are so almighty wealthy. What is in it for them? Presumably they have already citizenship of some other country. I was not aware of Americans but I was aware of people from the Middle East and behind the Iron Curtain looking for Irish passports. If they already have a passport and an identity why do they want it? I suppose they want it for the respectability conferred on them by Irish citizenship. I believe being an Irish citizen is something to be proud of. Why should we give it to these people without the most scrupulous examination and why should it be bought? This is tantamount to simony. It is an attempt to project a specific material equivalence for things that should not have a monetary value. It is like selling something spiritual in which you believe. It is bad to be involved in that. They also want it because it is good for travelling. I travel a good deal and I am very grateful to have an Irish passport.

Mr. Dardis

The Senator is not out of the country often enough.

Mr. Norris

As a taxpayer I would like to thank the Senator for his generosity in affording me such extensive opportunities for travel. I note that even on the occasions when the Senator managed to swizzle me out of a trip to New York and his photograph got into the newspaper, it was captioned it "Senator David Norris meeting the head of the United Nations". I thank the Senator for his kindness.

Mr. Dardis

I did not realise the wounds went so far back. Senator.

Mr. Norris

They do. I am very easily wounded. Can the Senator not tell that I am in a state of extraordinary distress?

Acting Chairman

The Senator's time is up.

Mr. Norris

It was wasted by him.

Acting Chairman

With all respect, it was wasted by both Senators.

Mr. Norris

There was a certain mutuality in the waste. I strongly support Senator Quinn's motion and now that the Minister is here I hope we will get some information about those schemes which can be claimed and demonstrated to be to the benefit of the people.

Minister for Justice, Equality and Law Reform (Mr. O'Donoghue)

I thank Senators Quinn and O'Toole for tabling this motion and giving the House an opportunity to discuss this topic which has been the subject of considerable debate and controversy over the years. For reasons which I will refer to in the course of my speech I cannot commend the motion to the House. Instead a Government amendment will be moved which reflects more appropriately the experience we have had with this scheme and the present situation regarding it. It would be useful if I give the background to the scheme and let Senators know of developments to date.

Section 16 of the Irish Nationality and Citizenship Act, 1956, as inserted by section 5 of the lrish Nationality and Citizenship Act, 1986, provides that the Minister for Justice can waive the usual conditions for naturalisation provided the applicant has "Irish associations". It is under this provision that applications for citizenship in exchange for investment are approved. The provision has, since the 1980s, been interpreted as meaning that investments made in this context by non-nationals can be regarded, for the purposes of the section, as establishing "Irish associations".

The concept of granting citizenship to persons making investments in the State was raised initially in the 1980s. The thinking was that it would assist in attracting foreign industrialists to set up large manufacturing concerns by offering Irish nationality to key personnel resident here. This would assist them in travelling on business in Europe where they would otherwise be subject to visa requirements. The first applications were approved in April 1989.

A practice commenced of sending applicants a Statement of Intent setting out how, in return for investments, the Minister would exercise the discretionary powers in section 16 of the Act. Essentially, this required applicants to acquire a residence in the State, to have been resident in the State for two years and to spend a reasonable amount time here over the two years — 60 days. Also they must have satisfied the Minister, on the advice of a Minister of the Government, that a viable manufacturing, international services or other acceptable wealth and job creating project with substantial investment by the applicant had been established here. Finally, they must have complied with the statutory requirements relating to good character, apart from the five year residence requirement, in relation to the grant of citizenship.

The level of investments was to be in the order of £500,000 per person. This Statement of Intent clearly required applicants to reside in the State prior to the grant of naturalisation.

The practice of issuing the Statement of Intent and requiring residency here prior to naturalisation was not followed in all cases. Until April 1994, Ministers operated on the basis that investments of the order of £500,000 together with an intention to reside here for a reasonable period, evidenced by the purchase of a residence, were required before naturalisation was granted. In 1995, the practice of seeking £1 million in investment was adopted, though this varied from case to case and while many applicants were required to invest £1 million others were naturalised on the basis of an investment of £500,000.

In the period 1992-4, there was an expansion in the demand for citizenship for investment and the Government decided in April 1994 to set up an advisory group consisting of representatives of the Departments of Justice, Foreign Affairs, Finance and Enterprise and Employment, and Forbairt. Essentially, the group was given the task of assessing the investment proposals of individual applicants and making a recommendation to the Minister on foot of that assessment as to whether the normal pre-conditions for naturalisation should be waived. The terms of reference of the advisory group were agreed by the Government in July 1994, the main provisions of which are that a substantial residence must be purchased and retained in ownership for a period of at least five years with an undertaking to reside in the State for a minimum of 60 days in the two years following naturalisation; the level of investment must involve a net contribution of at least £1 million per applicant; if the investment was in the form of a loan, it should be for at least seven years' duration and subject to a certain maximum interest rate; as ordinarily naturalisation would be for life, the duration of the investment should be for a significant period, at the very least five years; and a police certificate of character must be provided by authorities in the country of origin and, if required, from the police in any country where the applicant has resided or carried on business or maintained substantial investments, together with express permission to the authorities here to inquire behind it. Other requirements in the terms of reference related to procedures for verifying the investment and conditions associated with the related naturalisation.

It has been the practice of Ministers to accept applications for naturalisation of spouses and minor children of investors once an interval has elapsed following the investor's naturalisation. In addition, the Government also decided in 1994 that the scheme should be put on a statutory basis and that priority should be given to the preparation of the necessary legislation. In the meantime, the Minister for Justice was to continue to make decisions on investment based naturalisation applications acting on the recommendations of the advisory group which would operate on the basis of its terms of reference.

In September 1996, the then Government decided that no new applications should be accepted under the scheme pending the introduction of specific legislation but the processing of existing applications could continue. At a later stage, the Government decided that, of the 69 instances in which the Department had been aware of interest in securing naturalisation by way of investment, 19 were to be regarded as cases in which commitments had been made and should be finalised, while the remaining 50 in which no binding commitments had been made should be left over until the new legislation was in place. The Government subsequently added a small number of additional applications to the 19 I have mentioned. Some of these cases and some of the 19 have been finalised. Others are at various stages of processing.

Last September, the Government asked me to do a thorough review of the scheme and, as I have indicated in the past, I will not be processing the applications which are on hand any further nor will I be entertaining any new applications until the Government decides what course of action to take based on the review I have undertaken. This is referred to in the proposed Government amendment to this motion. I have naturalised only two people under the scheme and these cases were ones which had been accepted for processing by the previous Government.

Overall, 143 persons, 48 of whom are spouses and minor children of investors, have been naturalised on foot of the scheme, with investment in excess of £90 million made in return. It is difficult to say precisely how many jobs have been created or preserved as a result but it is safe to say that the figure is in thousands.

As Senators will appreciate, there are difficulties associated with regulation of a scheme of this kind. For example, it is difficult to check character references of persons who have never lived here or to verify if residence commitments are being honoured. The scheme has been operated by Ministers of different political allegiances. I receive correspondence from politicians of different parties seeking to have the scheme used in particular situations. I also receive significant correspondence from business people who see the scheme as a useful vehicle through which they can obtain the investment necessary to develop their enterprises or to prevent their contraction or closure.

I cannot accept the motion in the names of Senators Quinn and O'Toole at a stage when the Government has yet to take decisions on a review which has been made of the scheme. To accept the motion in the form in which it has been tabled would be premature to say the least. I prefer to await the Government's consideration of this matter without attempting to prejudge the outcome.

If the Government decides, in due course, that the scheme is not to be operated in future, I would still see no need for legislation to implement such a decision. Instead, I would be confident that the Minister holding office would abide by that decision. In common with my colleagues in Government, I am answerable to the Dáil for the discharge of my duties and I am also available in this House to participate in all business relating to my area of responsibility.

The Government amendment calls on the House to welcome the contribution made to the economy by non-nationals who have invested in Ireland, many of whom were subsequently naturalised. This refers to the practice of granting permission to remain in the State to persons who wish to establish a business, subject to certain conditions. Such people are making an important contribution to our community which should not go unacknowledged.

The motion refers to the need to maintain Ireland's standing in the international community. Naturally I share this objective. It is often said that Ireland is one of the few countries to operate a scheme of this nature and that other European or North American states do not have any counterpart to it. Ireland is one of the few states to openly operate such a scheme. I have never considered that Ireland's international reputation has been harmed by the scheme.

In conclusion, a Chathaoirligh, I commend the motion to the House subject to the amendment proposed on behalf of the Government.

Ms Cox

I support the amendment. When the Minister took office, he acknowledged that this scheme needed to be reviewed. He suspended all applications and is reviewing the scheme. I welcome this as it is indicative of his approach to his brief.

The scheme was introduced by Deputy John Bruton when he was Minister of Industry and Commerce. The idea of giving passports to people prepared to make substantial investment in the country was mooted when he was on a trade mission to Hong Kong. A number of highly successful business people invested in Canada and were subsequently rewarded with Canadian passports.

I wonder about the populist purity of the Fine Gael and Opposition parties. Are they making a political point? It is not fair to spurn significant opportunities for investment in the country and I do not know any Senator or Deputy who would reject investment which might save jobs in their constituencies.

Senator Norris said the scheme seems to be cloaked in secrecy. I know from running a business that if one has difficulties, the last thing one wants to do is make them public. If someone is dependent on credit lines from suppliers and they hear that person is relying on outside investment to pay bills, they may withdraw their line of credit and competitors can use it to their advantage. I understand why companies who may have benefited from outside investment are reluctant to plaster this information all over the newspapers. The individuals concerned may not, for the same reason, want their private affairs publicised prior to the event. We need to respect a certain level of privacy.

A scheme must be operated and managed properly and be above reproach. As Senator Norris said, anyone involved in any dealings with this country is entitled to respect and a certain level of privacy. There is a need to make the system more transparent so that people do not think we are giving passports to people of ill repute. We must be realistic. If people with the necessary bona fides are prepared to give something to this country, perhaps we should consider giving them something in return. It is not a question of selling passports but of acknowledging the contribution made by certain people to this country. Nobody wants to see passports being given out on a quid pro quo basis in return for investments. I believe substantial evidence of investment and commitment to the Irish economy and people should be available.

If the scheme is to continue it must be improved and its value must be assessed. The Minister is doing that in his review. The Government has a responsibility to the country and if there is a possibility of attracting major investment to Ireland which would help to secure jobs here, perhaps we should take it. We are all happy in the current boom period but there have been times when we needed investment and it was not always easy to secure. If, in order to secure investment, we must operate a system which would acknowledge the contribution of foreign investors in a transparent and open manner, I do not see anything wrong with that. A similar scheme is in operation in many other countries. It is certainly operating in the US. Although it may not be publicised, there are certain situations where, if sufficient money is invested and a sufficient contribution made to the economy, it is possible to apply for a US passport.

Everybody is entitled to be treated respectfully whether they are foreign or not or whether they are applying for a passport or not. Senator Norris stated that there are people holding Irish passports of whom we would not be overly proud. We are not always able to be proud of everyone who holds an Irish passport; sometimes Irish citizens do many things about which we might not be too happy. The fact that we might not be proud of everything people do is not a sufficiently good reason to throw the baby out with the bath water.

There is no doubt that the scheme must be reviewed and a decision may be made not to continue with the it. However, the scheme must be reviewed in a transparent manner and the Minister should come back to the Dáil and Seanad and outline proposals in this area. The Minister stated that 143 people, 48 of whom were spouses and minors, were awarded passports. That is not a huge figure so I am not sure that all of the concern about this issue is justified at this stage.

The difficulties of the scheme have been acknowledged and while I realise it is policy for the Opposition to oppose Government initiatives, it is necessary to examine the scheme in a constructive manner. It is possible that the scheme could be operated and properly managed and that we could ensure it was above reproach. It may be of benefit to our country, economy, citizens and children who may be seeking jobs in the future. For those reasons I do not believe it is appropriate at this stage to support the original motion. I do, however, support the amendment and acknowledge the contributions made by foreign nationals to this country.

Mr. Connor

I welcome the opportunity to contribute to this debate and I am glad the Minister has come into the House to provide some background on the Government's present position in this area. It was interesting that he provided a detailed background of the events which led to the major changes brought about in 1994. However, he failed to provide details of the events which led up to that.

Senator Cox introduced a lot of politics into the debate this evening and was the first Member to approach the issue from a very political standpoint. One is tempted to respond in like manner. I agree that the principle behind this scheme, when it was established in 1986 by the then Minister for Industry and Commerce, Deputy John Bruton, was a good one. However, lest the House forgets, the scheme's reputation was sullied by the revelations in 1994 that the then Minister for Industry and Commerce, Deputy Albert Reynolds, in the interregnum between the changes of Government in December 1992 was responsible for signing naturalisation papers for a certain Mr. Masri.

Mr. Masri invested in none other than former Deputy Reynold's pet food company at Edgeworthstown in County Longford. I am very surprised at the attitude of the Progressive Democrats here this evening as the issue was initially exposed in the Dáil by former Deputy Michael McDowell in April 1994. I recall Deputy McDowell putting some very leading questions to the then Taoiseach, Deputy Reynolds. Deputy Reynolds' response to him was that the Dáil was not a court of law and as such he was not obliged to answer the questions. Former Deputy McDowell responded that the Dáil was certainly not a court of law but that if it were, the jury would not have to retire to make its judgment. That summed up the case. That was the first revelation responsible for giving this scheme a bad reputation.

On 11 September 1997, Deputy Jim Higgins, contributing to the debate on the setting up of the Moriarty tribunal, referred to the granting of 11 passports to Saudi Arabian and Pakistani nationals in 1990. All of the procedures then in place for the granting of passports were set aside in the case of these 11 people. The normal procedure was that at the very least the Assistant Secretary of the Department of Justice, Equality and Law Reform would sign the order for the granting of a passport. In these cases, however, it appears the order was signed by the then Minister for Justice, former Deputy Raphael P. Burke. Former Deputy Burke has never fully explained his interest in that matter. I realise he is no longer a Member of this House but he was a Minister for Foreign Affairs in this Government. There were also rumours, which were not denied, that the passports were personally delivered by then Taoiseach, former Deputy Charles J. Haughey, to the 11 people at the Shelbourne Hotel. I quote from Deputy Jim Higgin's contribution to the debate on 11 September last year:

Two of the 11 people to whom Irish citizenship was granted were involved in the biggest banking scandal in history. Sultan Khalid S Bin Mahfooz and Haroon Rashid Kahlon, together with the National Commercial Bank of Saudi Arabia, were sued by liquidators of the Bank of Credit and Commerce International in relation to the BCCI collapse. In July 1992, both men faced charges in the United States that they conspired to steal more than $300 million from the BCCI depositors. These charges were dropped in late 1993 following a plea bargaining settlement for $225 million. Haroon Khaloon pleaded guilty to the charge that he failed to register as a broker for which it was agreed by the US authorities that he would not be jailed.

The normal procedures for the issuing of naturalisation papers to these people would have been that they would have been signed by the Assistant Secretary of the Department at the very least. Instead, they were signed by the then Minister for Justice, who never explained why he stepped outside normal procedures and signed them. Files relating to this matter are still in the Department of Justice, Equality and Law Reform and I put it to the Minister that he should answer the questions his predecessor failed to answer. The Minister must know the explanation and I ask him to inform the House of what he knows.

An Cathaoirleach

The Minister has already spoken in this debate and will not have the opportunity to speak again.

Mr. Connor

I would gladly give the Minister the one remaining minute of my time to allow him to address this issue.

An Cathaoirleach

That is not appropriate.

Mr. Connor

This scheme was a good one but its reputation has been sullied and destroyed by the actions I outlined here this evening. Some of them, no doubt, may be dealt with by the tribunals of inquiry which are currently proceeding. It is a great pity, however, that the scheme has been destroyed, not necessarily by the foreign nationals whose investment we have been trying to attract — and, God knows, we need more investment — but by the very Governments and Ministers who have been operating it. That is the unacceptable scandal which has motivated the wording of Senator Quinn's motion and with which I reluctantly agree. I basically agree with the scheme, but because it has been so badly abused we now see that the only way forward is to abolish it completely.

Mr. Chambers

As regards some of the issues that have been raised in relation to passports, it is easy to see things in hindsight. The proposal before the House is being looked at against a background of dressing something up in order to say that the scheme when introduced was undertaken in the best interests of the people and the State. Recently I read an article written by the Leader of the Opposition, Deputy John Bruton. While I do not wish to misquote him, the article stated that in the region of 69 to 71 per cent of money belonging to wealthy people is contained in offshore accounts throughout the world. The magnitude of that, in itself, indicates the overall difficulties of dealing with the ownership and management of finances.

I am conscious that questionable things have occurred in Government in the past, but Senator Connor's party has been in Government and has held the Justice portfolio. At the time the previous Fine Gael Minister had an opportunity to examine what had been undertaken by Governments in the past. This House is not the place to raise that issue vis-a -vis the importance of the overall proposal. We can certainly question the judgment of many past Ministers. I agree mistakes have been made which were not in the best interest of the people, but some positive decisions were taken also.

On my way to attend the Seanad I can see some of the work achieved by that money, for example, in the number of people employed in the meat canning factory in Edgeworthstown, as well as the number of cars there. It is easy for politicians to express opinions on matters when they were not at the receiving end of decisions that were made at the time and which may have been considered to have been in people's best interests. It is said that a week is a long time in politics, and so is a week in financial circles.

When we talk about cancelling the scheme, we must look at the overall picture from a positive perspective. I agree that the Government should re-examine the scheme on the basis of a careful assessment. Decisions should be made in the best interests of both the people and the country. It is something we should retain. If one is to shoot the messenger as a result of this passports proposal, one will kill off an attractive opportunity which can do well if it is handled properly. In the light of the proposal, the Government should review it and, with the development agencies, use it for the benefit of the people and the country generally.

It appears that a substantial number of people regard Irish citizenship as an important thing to have. It runs deeper than the financial implications involved. There is a certain feeling towards Irish nationality and the quality of having an Irish passport that is not sought to the same extent in other countries, for whatever reason. Perhaps it is because of our great international presence as expressed through our culture, people and nationality. The way we are regarded abroad is an important aspect in attracting people who want to make a genuine national contribution. We are in the throes of business and political life. Many of the decisions concerning Irish passports were taken on the basis of recommendations from State development agencies such as the IDA. It is difficult for Ministers to make decisions without the full support of State agencies who are at the coal face of development in attracting industrial investment.

The Government should review the scheme and it should be carefully monitored in future. If mistakes were made and things were badly handled, we should, nonetheless, avoid damaging ourselves internationally through public criticism. If we have to legislate against ourselves for the decisions we made, we will have gone too far in taking on the responsibility that Government and Ministers are entitled to bear in the best interests of the people.

Mr. B. Ryan

There is a particular appropriateness about this motion being moved by Senator Quinn. Who in this House is better qualified to speak about the needs of business and the way business should operate? There is a lesson in what he had to say, although it is not often that I would say this about business people. The ethical tone running through what Senator Quinn said is an important statement that perhaps our State agencies should also recognise. The ethical tone concerns where money comes from, the conditions attached to investment, the source of those investments and the individuals through which they are channelled.

A variety of issues can arise and the one Senator Quinn adverted to is the perception of this country abroad. We are fortunate in having a booming economy, at least in overall terms. We are also fortunate that because our booming economy is creating a favourable image of us, a number of the unsavoury episodes about this country that have surfaced in recent years — of which the sale of passports, although people do not like to use this phrase, is one — have not really damaged the country to the degree they would have if we were not seen to be the most successful economy in the OECD. Because we are successful all the other things are being forgiven, but they are there and we need to look at them.

I thought we worked in a market economy, which is based on the appraisal of business opportunities by individuals who then make a judgment as to where they can get a decent return on their money. We are not talking about people making investments in social infrastructure such as education, but in business out of which it is assumed they will make money. We would want to get away from this perception of the international investor as a global version of the Society of St. Vincent de Paul, handing out munificence to those countries which are particularly deserving of it; they are people who want to make money. That is fair enough as it is the nature of business in the market economy, but they are not coming here to do us a favour; they are coming here because they make, in the parlance of economics, a judgment that their marginal utility is best advanced by investing in Irish companies in return for an Irish passport.

I think a fundamental question which would have to be asked is: why do they want an Irish passport? It is not because they are living here because one must remember that the substantial period of time which they are required to spend here after they are given an Irish passport is at least 60 days in the two years subsequent to the issuing of an Irish passport to them. Let us put that in context. On that basis I am entitled to be a Kerryman because I spend 30 days a year in the kingdom of Kerry and I have done so for the past 14 years. That is not a substantial part of my time. Perhaps it is one of the best parts of every year, but it is not substantial.

Talking about substantial periods of time, the Government amendment is, to be even generous to it, disingenuous. We are not talking here about foreign nationals who come here, settle down, set up a business, get permission to stay because they are setting up a business and then, in the fullness of time, apply for naturalisation. Such people have been going through a normal process of naturalisation for years and we all know about them. They are people who have set up small businesses which have become larger businesses. Ultimately, they apply for naturalisation as they intend to stay here for the rest of their lives. This is the giving away of our passports as a sort of flag of convenience for international playboys in some cases so that they can have a passport which is more convenient for their lifestyle than the passport which they would have otherwise.

There is no condition in this which states that these people must be involved in Ireland. If these people have as much money as they appear to have, the purchase or lack of purchase of a substantial residence will be of no great concern to them. It is yet another thing into which they can put their money and, with Irish capital gains tax as it is at present, they would probably be as well off to put it into Irish property as anywhere else. Therefore, the residency requirement is trivial. It means a short holiday of one month here for two years and there are no further conditions.

What do we get in return? We get a maximum of £90 million in return for which the good name of the country is drawn through the mud increasingly. The procedure by which people get Irish passports is perceived by ordinary people to be at least potentially rotten. There is a feeling abroad that this is yet another scheme under which the ruling elite look after themselves by handing out things which are essentially the property of the State and behave as if they were their own personal property. It is just not worth it anymore.

The amendment does not address the issue. It is yet again an attempt to postpone a decision. The honest answer to all of this and what we need to do is end the scheme once and for all, as Senator Quinn suggests, and return to a situation where if people want to set up businesses, let them come here, live here, build up the business and then of course they will be welcome to be naturalised as Irish people, having made their contribution and demonstrated their intention to stay.

An Cathaoirleach

I call Senator Rory Kiely. The Senator has five minutes and then I must call Senator Quinn to reply.

Mr. R. Kiely

I support the amendment to the motion.

I listened to previous Senators refer to the inadequacies of the scheme — Senator Brendan Ryan stated that maximum to be derived from an investment was £90 million — and I might have reservations about it, but I would measure the benefits not in terms of money but in terms of jobs. The jobs which this scheme saved and procured are more important than money, and that is why I support the amendment to the motion which notes and welcomes the fact that, since his appointment, the Minister for Justice, Equality and Law Reform has suspended the operation of the scheme for naturalisation arising from investment pending a review which will be determined by Government shortly. We should wait for the result of that review before we make any half-baked decisions such as that demanded by the motion of Senators Feargal Quinn, Joe O'Toole, David Norris and Brendan Ryan.

I had reservations about the scheme until about four or five years ago. I listened to the Fine Gael Senators tonight, but at that time they were more enthusiastic in securing passports for foreign investors to save a company in my area. That company employed 100 people. It would have gone into liquidation but for an investment by a foreigner as a result of the issue of an Irish passport. I was involved in making presentations at the time and the company succeeded in getting the investor a passport. It was widely welcomed, especially in the local newspaper, by Deputy Finucane, the Fine Gael Deputy for Limerick West. I know other members of Fine Gael who used this scheme to ensure other businesses were kept going. The scheme definitely saved jobs. What would have happened to the 100 people employed in the company to which I referred? Deputy Finucane, other Members of the Oireachtas in that area and I made representations to ensure that the investment would be provided for the company under the scheme.

It was suggested that Deputy Albert Reynolds got passports for investors in a company in which his son had interests, but he did not sanction these investments for that company because he was never Minister for Justice and, therefore, could not do so.

It was also acknowledged by the previous Minister for Justice, Deputy Owen, some time ago that former Deputy Ray Burke had not administered the scheme incorrectly. Senator Connor requested this evening that the Minister open the files on the matter. What about the previous Minister who was in office for two years? She had an opportunity to open the files relating to the cases in which he thinks there may have been wrongdoing and she did not do so.

In addition, the previous Minister for Justice, Deputy Owen, granted passports to the Masri family the day before she left office. I am sure all these things were done in the best interests of Ireland. She knew she was doing the right thing.

If we come along at this stage and outlaw the issuing of Irish passports to investors, it might be damaging to future investment which would ensure the continued success of Irish industry. I had reservations about the scheme at one stage, but I changed my mind when I saw how useful it was in ensuring an industry in my area was saved. The scheme needs reform. I suggest that we await the findings of the review committee set up by the Minister for Justice, Equality and Law Reform and make a judgment on them.

Mr. Quinn

Thank you, a Chathaoirligh, for the opportunity to conclude the debate. I welcome the Minister for Justice, Equality and Law Reform to the House.

It was a very good debate and I welcome what I heard. Senator Chambers stated that it is easy to talk about things in hindsight. I am the very one who would acknowledge that I am talking in hindsight. I would not have spoken in this way five years ago. I now believe it was an error and something we should address.

What concerns me is the thought of walking through immigration control in a European airport and seeing a sign saying "European passports to the right" with a sign underneath saying "Irish passports to the left". I tabled the motion because I am concerned we are in danger of damaging a priceless asset — our reputation. I am looking back at the matter with hindsight and with concern.

Passports are being offered for sale. There were five advertisements for passports in The Economist last week, some of which I imagine were European passports. My son showed me on the Internet the website of a company called Burlington Foundation Company which offers EU passports for sale, which I fear might be Irish passports.

This a question of principle versus expediency. We had expediency in the past but it is now a matter of principle. It is not a question of tinkering with the scheme and seeing how we can improve it. Senator Ryan and others have said very clearly that we must not damage our traditional route for naturalisation, which is to look at someone's history and behaviour and examine whether they are worthy of gaining the priceless asset of citizenship. We can then say we are happy to accede to the request of someone who invested and worked in Ireland and played a part as a citizen. However, that is a long way from putting a price on a passport and deciding on certain rules for citizenship. The traditional route of examining how people have lived and behaved in Ireland should not be damaged. I have a serious problem with what the Minister said tonight. I am disappointed he has not understood the principle of the points we have made. The Minister has been reviewing the situation for nine months and the previous Government also looked at it for nine months, 18 months in total. The Minister said he will shortly have the answers to that review. I suggest he puts the advisers conducting this review around a table tomorrow afternoon and gives them 25 minutes to make a decision on whether we should take the route of expediency or principle.

This is a matter of principle and not one of finding the best deal. The Minister must stand his ground and say we should not tinker with the scheme because we cannot risk our nation's reputation any longer. Senator Manning used the word "demeaning". That is a very mild word to describe the danger we are likely to do to the priceless asset of our nation's reputation. Nothing should damage that reputation.

The steps suggested by the Minister do not go nearly far enough. I will keep a very close eye for one month on what the Minister comes up with to solve this question of principle. We should consider a Private Member's Bill, if necessary, to put into operation the suggestion in the motion.

I thank the Minister for his attention and for discussing the matter. I am disappointed he has not listened carefully enough to the very strong case which is being made by the nation as a whole. I speak on the matter with hindsight as I have changed my mind over the past five years. I now believe we must never demean ourselves or do anything which will damage the reputation of the priceless asset of our sovereignty and nationality.

Amendment put.

The Seanad divided: Tá, 26; Níl, 17.

Tá

• Bohan, Eddie.
• Bonner, Enda.
• Callanan, Peter.
• Cassidy, Donie.
• Chambers, Frank.
• Cox, Margaret.
• Dardis, John.
• Farrell, Willie.
• Finneran, Michael.
• Fitzgerald, Liam.
• Fitzgerald, Tom.
• Fitzpatrick, Dermot.
• Gibbons, Jim.
• Keogh, Helen.
• Kiely, Dan.
• Kiely, Rory.
• Lanigan, Mick.
• Leonard, Ann.
• Lydon, Don.
• Mooney, Paschal.
• Moylan, Pat.
• O'Brien, Francis.
• O'Donovan, Denis.
• Ó Murchú, Labhrás.
• Quill, Mairín.
• Walsh, Jim.

Níl

• Caffrey, Ernie.
• Coghlan, Paul.
• Connor, John.
• Coogan, Fintan.
• Cregan, Denis (Dino).
• Doyle, Avril.
• Doyle, Joe.
• Hayes, Tom.
• Manning, Maurice.
• McDonagh, Jarlath.
• Norris, David.
• O'Dowd, Fergus.
• O'Toole, Joe.
• Quinn, Feargal.
• Ridge, Thére se.
• Ryan, Brendan.
• Taylor-Quinn, Madeleine.

Tellers: Tá, Senators T. Fitzgerald and Keogh; Níl, Senators Quinn and B. Ryan.

Question declared carried.

An Cathaoirleach

When is it proposed to sit again?

Mr. Cassidy

At 10.30 a.m. tomorrow.