Fuel laundered by republican paramilitaries from an illegal diesel plant in Co Armagh was destined for loyalist communities, the Belfast Telegraph understands.
Earlier this week Customs officers raided a property on Kilnasaggart Road, Co Armagh, and discovered a plant that was capable of producing up to six-and-a-half millions litres of illicit fuel a year.
This plant is the largest one of its kind to have been found in Northern Ireland and was uncovered as a direct result of an earlier raid on an illegal cheap fuel site in a loyalist part of Belfast last year.
The discovery of the site has fuelled speculation that criminal elements within the republican community are supplying those who have a stronghold in loyalist areas.
Fuel from the site in Belfast had been brought in from the Republic via south Armagh, where it was laundered. It was selling around 36,000 litres of fuel every week, which was estimated to have cost the Government around £1m in lost tax revenue.
John Whiting, who is assistant director criminal investigation for HMRC in Northern Ireland, explained that the operation which led to the discovery of the illegal diesel plant on the border took around six months and came about as a result of the raid on the site in west Belfast in September 2008.
However, the two operations are not thought to be directly linked.
He said that from the information collected from the west Belfast raid, Customs officers began looking at other elements.
Eventually an operation was put in place which involved officers from the An Garda Siochana, the PSNI and Customs.
As a result of intelligence, gardai discovered a facility near the border in Co Louth that was storing green diesel, which is only available in the Republic.
They mounted surveillance which led to the discovery of the plant Kilnasaggart Road, near Jonesborough, which is on the border between Co Louth and Co Armagh.
Around 25,000 litres of illicit fuel, four large storage tanks and associated equipment were seized. Almost 1,000 litres of acid and a quantity of acid waste, the by-product from the laundering process, was also removed.
And while Tuesday’s discovery can be hailed as a success for Customs officers, Mr Whiting admits the bid to stop fuel laundering is sometimes an uphill battle.
He explained catching those responsible was very difficult because it was all about timing. Often the process to strip the fuel of its marker does not need to be supervised.
He said the operation which led to the raid this week was dangerous.
“The operation was very difficult in terms of its proximity to the border and because of the current security threat,” he said.
“This meant it was very difficult to conduct surveillance up in that area and identify the people who are operating the plant.
“When faced with that situation, do you continue on or do you hold back?
“But we continued on because we have got a responsibility to the public purse as well as the public — that is what really dictated this operation.”
And while no-one was arrested at the Co Armagh plant, Mr Whiting said some of the equipment they recovered could lead them to those responsible for the illegal operation.
“We gathered a number of items from the site and we will be conducting forensic examinations which may help to identify those individuals,” he said.
Analysis: Politics ignored when there’s a profit at stake
From the days of notorious UDA racketeer Jim Craig loyalist paramilitaries have enjoyed the financial benefits of links with the other side.
“If republicans could exploit the local economic system for financial gain and were prepared to share the tricks of the trade, then why shouldn’t loyalists?” was the thinking of people like Craig and his sidekicks. There was a price to pay, of course, if you were found out and the organisation hadn’t sanctioned your deal with the other side or didn’t approve your method of payment.
In Craig’s case the equivalent of cash upon delivery was crucial information that allowed the Provisionals to eliminate a number of leading loyalists in the 1980s including Lenny Murphy, the notorious leader of the Shankill Butchers gang.
When Craig ventured a little bit further in his risk-taking and allegedly provided the details which allowed the IRA to attach a bomb to the underside of UDA leader John McMichael’s car in December 1987, his fate was sealed. Undoubtedly some loyalists have maintained their links with like-minded criminals on the republican side, or even generated new connections when they were tempted by the lucrative pickings on offer — through drug dealing in particular — and more specialised operations like fuel laundering, which have now penetrated loyalist areas of Belfast.
Customs and Revenue officials are currently examining the books of a number of businessmen who have set up petrol retail outlets in these areas, usually by taking over existing established sites.
In one case there is no middleman, just a proprietor who has direct links with the fuel doctoring godfathers in south Armagh where he grew up.
In other cases a few middlemen in the loyalist community have been the conduit for the transfer of the doctored fuel and the exchange of cash to the providers along the border.
Unionist sources in south Armagh, who have monitored the operations of the fuel launderers, claim that there are a further three laundering plants similar to the one raided by Customs officials on Tuesday.
They allege that a businessman is the conduit for the unlikely links between loyalist paramilitaries and the republicans behind the extensive fuel laundering operation along the border.
It’s not possible because of legal reasons to name the individual identified as the alleged conduit, but sources describe him as a man who is of unionist background and a former member of the Orange Order.
And the motivation for the loyalist paramilitaries involved in the selling of the illegal fuel to motorists in the greater Belfast area is exactly the same as Jim Craig’s.