Thomas "Slab" Murphy has been arrested and convicted on tax evasion

The arrest and conviction on tax evasion charges of Thomas “Slab” Murphy, 66, from Hackball’s Cross, County Louth on the border with South Armagh has precipitated yet another crisis in the peace process.

The nine-count tax evasion conviction came in a non-jury court and was handed down by three judges of the Special Criminal Court.

The original raid on his premises, which sprawls on both sides of the border, was conducted by 400 armed soldiers and Irish police in 2006, Numerous documents and a massive amount of cash – close to a million dollars – was seized.

It had long been speculated that Murphy carried on a huge and very lucrative smuggling business, illegally moving fuel and animals across the border in order to take advantage of the price differentials between north and south.

Sinn Fein reaction was swift.

Gerry Adams stated that Murphy was a “good Republican” and added that the case should never have been tried in a non-jury court, the Special Criminal Court, and he was deeply upset that court was used for a case which was about a failure to make tax returns.

Deputy First Minister Martin McGuinness commented, "Tom Murphy, over the course of the last number of years, last number of decades, has been absolutely invaluable to building support for the peace process in south Armagh." So I think the work that was done by Tom Murphy in that area was good work and that makes him, in my opinion, a good republican."

McGuinness told RTÉ that a "very unhelpful narrative" had developed around the case and blamed it on Sinn Fein opponents in the lead-up to the Irish election.

Murphy is a key figure because, according to most insiders, he was also IRA chief of staff since about 1997 shortly after an attempt to take over the IRA and end the peace process by a militant faction led by Michael McKevitt had failed.

Having Murphy's backing for the process was huge. He was the leader in South Armagh, traditionally the most militant of all IRA units and indeed the one that allegedly plotted the bombing of Canary Wharf in 1996 after repeated British inaction on the peace.

Murphy steadied the ship and assured the IRA's commitment to the peace initiative from then on.

Little wonder then that Adams and McGuinness are deeply concerned about this week's events. Many of Murphy’s associates believed he had the two governments' guarantee that he would be left alone, but that has not proven the case.

He will be sentenced in mid-February, likely in the heat of an Irish general election. Sinn Fein is right to be worried about the consequences of his conviction. It raises red flags once again about a process that had endured its share of them in recent years.