ALAN MURRAY
and JIM CUSACK
GARDAI and the PSNI are conducting parallel investigations into IRA money laundering, focusing on the acquisition of hundreds of millions of euro-worth of property in Ireland, Britain, Eastern Europe, the Mediterranean and even the Caribbean.

The IRA's financial empire was described earlier this year by the International Monitoring Commission as a "strategic asset" which is being used to fund Sinn Fein's expansion programme in the Republic.

And both garda and PSNI sources said they were surprised last week at the joint announcement by the Northern Secretary and the Minister for Justice that there was no longer any "organisational" involvement in crime, and that the IRA was adhering to its commitments of July last year when it said it would "cease all activities".

Apart from the major investigations by the PSNI's Assets Recovery Agency and the gardai's Criminal Assets Bureau, both gardai and police in the North continue to detect the involvement of known IRA figures in crime, from extortion to fuel and cigarette smuggling, which are still taking place on a massive scale.

The IRA, whether in an organisational or personal capacity, is also involved in the intimidation of witnesses in the investigations into the murders of Robert McCartney in Belfast and Joseph Rafferty in Dublin.

While Sinn Fein also refuses to recognise the police service, co-operation with policing in republican areas of the North is still potentially hazardous for members of the public.

Last Thursday week, the PSNI carried out one of its biggest raids on an illegal diesel "washing" operation in the IRA stronghold of Cullyhanna in south Armagh.

About 21,000 litres of illegal fuel and seven tonnes of toxic acid waste were recovered from the plant, which was being used to produce around 210,000 litres of biodiesel-kerosene mix for sale from petrol stations in the North.

Sources in the North say that the IRA-run fuel operations have reached new levels of sophistication. The operation in Cullyhanna, which may be one of dozens, would be capable of generating profits of over €6m a year.

The IRA's fuel-washing operations along the border continue to create major environmental problems. The toxic acid waste, produced by "washing" the dye out of the commercial kerosene, is highly poisonous as well as corrosive. It can burn through concrete. It is usually stored in acid-proof containers,then put on stolen trailers and dumped on country roads around the border. It is costing local authorities millions every year to ship the waste to Germany for disposal.

The PSNI is conducting major investigations into criminal activities orchestrated by the IRA despite assurances on Tuesday from the Minister for Justice and Northern Ireland Secretary that the IRA is no longer centrally involved in crime. A probe into the IRA's criminal financial empire is being conducted by the PSNI's Economic Crime Bureau with particular emphasis on the acquisition of property in Northern Ireland from proceeds of terrorist crime.

The major investigation is separate from the ongoing enquiry into the Northern Bank robbery in December 2004 in which £26.5m was taken from the bank's Belfast cash centre.

The separate PSNI enquiry into the IRA's cash is understood to be probing the roleof former Sinn Fein vice-

ANALYSIS:

president Phil Flynn in a financial network. The source of loans to buy businesses in Northern Ireland, including the purchase of pubs in the party's heartland of West Belfast, is being examined. Detectives are probing the manner in which pubs and other establishments were acquired over the past 10 years.

Flynn, whose home and offices were raided as part of an investigation by the CAB, was given £173,000 in compensation by the Bank of Scotland for "loss of office" when he resigned from the bank in February 2005.

The assertion by Michael McDowell and Peter Hain that the IRA was no longer centrally involved in directing crime and that perhaps senior individuals connected with the organisation were directing criminal gangs in a personal capacity only, has been greeted with scepticism in security quarters.

"If that's the case, why are there such big investigations being conducted on both sides of the border," one senior security source said. "The probes are not about one individual; they're about several figures linked to the IRA who have 'borrowed' money up here through a financial network controlled by the organisation. Does anyone seriously think that having 'loaned' the money that the IRA will say to them, we're out of crime now, forget about that loan."

The PSNI probe is regarded as extremely sensitive and involves not just a possible trail to Phil Flynn, but to another 'Mr Big' unknown to the public whose name has continued to crop up in investigations in the North.

"We're not talking about a couple of properties or businesses, we're talking about a very large property portfolio which certain individuals have spent years building up and is controlled by the IRA."

The North Belfast MP Nigel Dodds said it was unbelievable for the Northern Ireland Secretary and Michael McDowell to suggest that the IRA was no longer centrally involved in crime activity.

"It appears Peter Hain is suggesting we accept that the IRA illegally obtained all these funds, created all these businesses but we should now let them get on with managing them and reinvesting the profits. It's absolute nonsense," he said.

In the Republic, the Criminal Assets Bureau has two teams working full-time on investigations into IRA money laundering, mainly through the investment of illegally acquired funds into properties and businesses.

Gardai have identified property developments valued at around €15 million in Bulgaria, a hotel complex in St Lucia and a quarry in the Midlands, as well as a major property portfolio in the north of England.

The Criminal Assets Bureau, assisted by police in Bulgaria, also discovered that it was intended to buy a small bank in that country with the intention of channeling funds from the IRA.

One of the CAB teams is dedicated full-time to investigating a business empire ranging from pubs, hotels, taxi firms, amusement arcades, security companies, building firms and development land in the Leinster area with a value of at least €100 million.

The money that started up this empire came from a major illegal gambling machine syndicate operated by the IRA during the 1980s. Cash from this syndicate passed through bank accounts in the Isle of Man which have been identified by CAB.

Two key figures, both with extensive experience in the banking world, are believed to have drawn up and set in place the "strategic" assets originally used to finance the IRA but now to finance Sinn Fein, which is regarded as the wealthiest political party in Europe.

Many of the businesses have also allowed individuals connected with these operations to become personally wealthy but gardai and the PSNI believe that funds from the operations are still being siphoned into accounts for end use by Sinn Fein.

Responding to the ministerial declarations of the IRA's alleged clean bill of health, the DUP's Nigel Dodds described them as "fantasy".