CHARLES HAUGHEY and his foreign affairs minister, Brian Lenihan, were given a detailed proposal on how a series of Arab investors were willing to fund an ‘Irish-Arab Bank’ that could have funded the building of roads, schools and hospitals.

Papers released into the public domain under the ’30 year rule’ include a document compiled by then-senator Noel Mulcahy – one of Jack Lynch’s eleven nominees to the Seanad – and David Boyd Barrett, adoptive father of People Before Profit councillor Richard, detailing how the two had canvassed a series of Arab investors in London who were willing to fund a bank to assist in national operations.

The two had prepared an outline proposal for the establishment of the bank, which had been adopted by the Arab League in London who were recruiting the Arabian peninsula’s oil billionaires in order to supply startup funding for the proposed institution.

The plan outlined that the potential funding of government expenditure was a prospect the potential investors found appealing. It read:

A type of investment which would have attractions for the owners of Arab funds would be to be able to lend funds direct to Government. The difficulties of this is that the government are attempting to reduce their borrowing level, but at the same time they do need the funds.

The result is that the necessary desirable capital projects are deferred. Most of those projects are in the infrastructural area, such as roads, waterworks, hospitals, local authority housing [and] schools.

Comprehensive

The plan had even anticipated the likely issue of government borrowing limits, outlining a procedure where projects would be financed and constructed by a private corporation which could then lease – or ultimately sell – the project to the relevant government department.

Arabic investors would have had a two-thirds stake in the bank, with Irish institutions retaining a 26% stake and three private Irish investors keeping an 8% holding.

In keeping with the market rates of the time, the bank was likely to pay out 14% interest on any long-term loans or deposits.

The absence of any further correspondence in the files released, however, suggest that the plan was not given any subsequent consideration by Haughey or Brian Lenihan Sr – father of current finance minister Brian – who had been sent full copies of the proposal.

The National Archives file referenced in this story is 2010/53/812.