The names of companies, public bodies and charities that received €1.25 billion through the State’s “golden visa” scheme for millionaire immigrants will remain hidden in State files, after a Freedom of Information (FoI) appeal showed the Government “does not hold” a record of the actual beneficiaries.
The lack of even a basic list comes despite serious concern being expressed for years within and outside the Department of Justice about weak controls and financial and reputational risks before Ministers abruptly closed the Immigrant Investor Programme (IIP) in early 2023.
After warnings that the provision of anti-money laundering checks was challenging, this now raises questions about how the scheme was monitored.
The IIP was set up during the financial crisis in 2012 to direct money into the then investment-starved Irish economy, opening residency in the State to non-Europeans with “at least €2 million” in personal wealth. They were required to put €1 million into an Irish business or to make a €500,000 philanthropic gift.
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Money changed hands for a benefit only the Government could grant – the right to live in Ireland – but the State has never disclosed who received Irish visas or where investments and endowments from applicants went.
The beneficiaries included property groups Bartra and Fitzwilliam, Trinity College Dublin, University College Cork and housing charities iCare and the Peter McVerry Trust, but their involvement was never set out by the department.
The Cabinet shut the IIP with only one day’s notice in February 2023 after a surge in applications from China stirred anxiety about due diligence checks becoming “extremely difficult”. Ministers also questioned the suitability of wealthy people with “no significant links” to the State apart from the visa scheme providing money for cultural, social and economic use.
[ Golden visa shutdown followed Justice warning about potentially ‘unlawful’ practices ]
All but 41 of the 1,316 applications in 2022 were from people based in China, following a surge after speculation that the IIP might shut. Chinese applications that year came in at a rate close to 25 each week.
New information has come to light showing a glaring absence of official information on the actual beneficiaries of investments and endowments that flowed from such applications.
The dearth of records was revealed when The Irish Times made an appeal to the Office of the Information Commissioner, challenging the department’s refusal to provide FoI access to the names of IIP beneficiaries. The office reviews FoI decisions by public bodies. The appeal cited the public interest in transparency on “interplay between the State, business and wealthy people” seeking Irish residency.
In a December ruling, some 25 months after the original FoI request, the commissioner said the department “was justified in refusing” access to investment and endowment beneficiary names “on the basis that the records sought do not exist”.
The ruling went on to uphold, on privacy grounds, the department’s refusal to disclose the names of visa recipients who handed over the money: “Having carefully considered the matter, I am not satisfied the public interest would, on balance, outweigh the privacy rights of the individuals.”
At the same time, the department was directed to decide afresh on FoI access to official submissions to accountants EY when it reviewed the IIP in 2020. It was also directed to partially release September 2022 advice to Minister for Justice Helen McEntee that recognised the need to guard against “potentially unprofessional, unethical, inappropriate or unlawful practices” in the IIP.
Such concerns persisted three years after a 2019 internal audit by the department showed weak controls, finding the legality of funds in 18 sample applications could not be verified. That report called for stronger controls on “applicants’ background and criminal history”.
EY’s 2020 report also warned of risks in controls, saying private providers of due diligence checks “may come under pressure to provide favourable reports”. EY also said Irish officials reviewed a UK intelligence and security report which made findings about a “more robust approach to the approval process of such visas”.
Almost two years after the scheme was closed to new applications, the Information Commissioner’s ruling shows the department still has no formal list of the actual beneficiaries of IIP investments and endowments.
“While the records released in part to date may well contain details of some beneficiaries, they simply cannot be regarded as lists of the actual investment/endowment beneficiaries under the IIP scheme since the start of 2020 and ‘the amount of money raised in each case’ as some of the purported beneficiaries were not, in fact beneficiaries,” said the ruling.
After incorrect and outdated IIP data was found in certain files, the department said it would need to examine “hundreds and ‘potentially’ thousands of records in hardcopy or electronic format, held on multiple systems” to create a record of the groups that received money in the scheme.
The department’s position was that it had information on projects actually funded in the scheme. Still, this was not all held on its case management system and would require “manual intervention” to create the records sought in the FoI request.
Such records would need to be cross-checked to ascertain each application status – whether it was completed, withdrawn, pending or delayed – and what funds were received.
“During its initial processing of the request, the Department provided the applicant with two lists of purported granted applications, including the investment type and monetary amount in each case. It redacted all entries under the heading ‘Business Name’, ie the projects or companies that had received funding through the IIP scheme,” the ruling said.
“However, the submissions made by various third parties included in the lists suggested that they should not have been included on the lists as they had not received funding during the period in question for a variety of reasons, including that they had been approved but had not yet received funding; that they had received funding but changed their minds and returned the investment; that they hadn’t received funding as the investor had successfully taken up an IIP scheme elsewhere; or that they hadn’t participated in the scheme at all.”
[ Concerns for years in Department of Justice over immigrant investor programmeOpens in new window ]
Responding to the commissioner, the department said the lists were compiled by extracting database details from approved investor application forms.
“It said that any changes to the projects being invested in or any withdrawals from the scheme by applicants and/or beneficiaries would not necessarily be notified to the Department and that the records reflected projects that were approved by the evaluation committee, but did not necessarily represent the recipients of investor funding,” said the ruling.
“It said it maintains an electronic database of immigration applications to the IIP scheme on its case management system (AISIP), but that this was centred on the individual applicants for immigration purposes, rather than on the investments.
“It said the database is based on data input from initial application forms and includes information on the immigrant investors’ nominated investment projects. It said that investors who did not complete their investment, or other projects which subsequently withdrew from the investment process, were still captured in the records provided to this Office. It said it continues to update AISIP as individual investor applications and projects progress through the process.”
The department was in the process of verifying information on investment beneficiaries but this was going to take “some time”.
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