Perhaps the most far-reaching revelation from the Moriarty tribunal so far is Charles Haughey's offer to Allied Irish Banks in October 1979 that he could secure a £10 million deposit from a Middle Eastern bank. From evidence given on Tuesday, it seems this money was to come from the Iraqi Rafidain bank. AIB did not accept Charles Haughey's proposal.
But if Haughey was really in a position to act on behalf of Rafidain, then things are much worse than we thought. For it then follows that the man who was soon to become taoiseach had a secret relationship with a sinister foreign government.
Rafidain is a commercial bank wholly owned by the Republic of Iraq. The Central Bank of Iraq controls all its transactions. And the Central Bank of Iraq is, like all State institutions in Iraq, entirely controlled by Saddam Hussein. Under a Stalinist regime like that in Iraq, there is no effec tive difference between a state bank like Rafidain and the state itself. If the tribunal's information is correct, therefore, what Charles Haughey was proposing to do just three months before he became taoiseach was to engage in a secret financial transaction on behalf of the Iraqi government.
We knew already that Charles Haughey was favourably disposed towards the Baghdad regime. He visited Baghdad more than once in his capacity as Minister for Health in the late 1970s, at a time when an Aer Lingus subsidiary, PARC, was taking over the running of the state-owned Ibn-al-Bitar hospital in the city. Haughey had, according to his successor, Albert Reynolds, "developed a very good relationship with the health authorities in Iraq".
In September 1989, in a letter to Saddam Hussein, Charles Haughey recalled his trips to Baghdad: "During my memorable visits to your country, I saw at first hand what was being achieved and decided that Ireland should seek a closer relationship with Iraq and develop mutually beneficial economic ties. The establishment of a resident embassy in Baghdad in 1986 was an expression of this desire." He was, he told Saddam, "very pleased" that "some Irish economic interests have been able to contribute to what Iraq has achieved in the economic and social fields under your leadership and guidance".
We know, too, that Charles Haughey took an extraordinarily close interest in routine commercial dealings between the Iraqi regime and some Irish companies. In 1987, for example, Larry Goodman was in Baghdad negotiating what turned out to be his biggest contract. He heard that another Irish beef company, Agra, was trying to get a visa to go to Baghdad.
Mr Goodman objected strongly to the Irish ambassador, Patrick McCabe, who, according to his sworn evidence to the beef tribunal, "felt myself obliged to take seriously what Mr Goodman had to say" because "he had indicated that he was willing to put the institution which I worked for in a possibly difficult situation".
Mr Goodman's concerns were therefore almost immediately communicated back to Dublin with a request from the Ambassador for written instructions, and a warning of "the risk that would be involved to the Department (of Foreign Affairs) if Mr Goodman learned of the assistance we offered to other companies and was angered at the risk of possible upset for his business".
This risk was taken so seriously in Iveagh House that a memorandum for the secretary of the Department of Foreign Affairs was drawn up, and John Swift, the assistant secretary in charge of the foreign earnings division, discussed the matter directly with Brian Lenihan, then Minister for Foreign Affairs and Tanaiste.
Not only, however, did the second most senior political leader in the country become involved, but it was also considered by officials to be of interest to the Taoiseach, Charles Haughey. A note marked "highly confidential" and "Baghdad - NB not recommended for use in Cabinet. For direct conversation with Taoiseach, if considered suitable" was also given by Swift to Lenihan.
As to why a routine visa application should be brought to the attention of Charles Haughey, John Swift explained that "It was my understanding that the Taoiseach had a particular interest in the matters relating to economic relations with Iraq in the broader sense . . . I know that because the matter came up more than once that he had a particular interest in Iraq since the time, as Minister for Health, that he had visited Iraq."
It now appears that Charles Haughey's "particular interest in Iraq" may have included some degree of influence over the disposition of funds from the Rafidain Bank. And it is worth considering what the Rafidain Bank was up to at the time of Mr Haughey's alleged offer to AIB and during his subsequent period as Taoiseach.
We know that from the late 1970s, Rafidain's overlord, the Central Bank of Iraq, was putting in place an extraordinarily complex system for defrauding western governments and financial institutions. Particularly after the start of the Iran-Iraq war in 1980, the Iraqis used western banks to fund some of their huge expenditure on arms.
Essentially the scam had three parts: (1) Get western governments to issue credits for the exports of foodstuffs; (2) use these credits to fund loans; and (3) use the loans to pay for weapons. Ireland, under Haughey, was one of the countries accidentally caught up in this web of deceit, providing guarantees for massive beef exports by Goodman International and Hibernia Meats.
We know all of this from the US Congressional investigation into the so-called Iraqgate scandal in the early 1990s. That investigation revealed that the Iraqis had gained control of major banks in Italy and the US and used them as conduits for billions of dollars of "loans" to Iraq which were never repayed. Among those indicted in the affair was the Rafidain Bank.
In this context, the notion that Charles Haughey may have had some secret dealings with Rafidain is deeply disturbing. However appalling it is that the Taoiseach was under financial obligation to Irish businessmen, the thought that he may have been trying to buy off his personal debts with money from the Iraqi regime is worse. It goes to the heart of what it means to be an independent State. The implications for sovereignty, for the conduct of an independent foreign policy and for Ireland's international reputation are obvious.
Just consider, for example, the position of Mr McCabe, Ireland's ambassador in Baghdad in the 1980s. He spent much of his time, as he told the beef tribunal, meeting officials of Rafidain Bank trying to get them to pay money owed to Irish firms. Yet, if the tribunal's information about Charles Haughey's connections with Rafidain is correct, those officials may well have known secrets about the workings of power in Ireland of which the ambassador, representing the State, was completely unaware.
We can only hope that the tribunal's information turns out to be wrong, or that it finds some innocent explanation. For whatever pleasure there may be in the fact that Charles Haughey is being exposed at last, the possibility that he may have given a thug like Saddam Hussein a hold over Ireland is cause for nothing but shame.