Officials from Dublin City Council were aware and recommended that protection money be paid to two violent criminals so that council houses could be built in west Dublin in 2016 and 2017, the High Court has been told.
The court heard that three building firms working for the city council paid between €1,200 and €1,500 a week to Derek 'Dee Dee' O'Driscoll from Croftwood Grove and "his enforcer" David Reilly from nearby Croftwood Park to prevent the sites and construction staff from being attacked.
Over €250,000 in the men's bank accounts has been declared the proceeds of crime and confiscated by the Criminal Assets Bureau, along with a mobile home and a horsebox.
A CAB officer told the court that council officials told the builders that the two men were "providing security" and "making sure there were no problems" at the sites.
Dublin City Council said it was investigating the matter.
O'Driscoll is a notorious Dublin criminal with 20 previous convictions, including for bribing a garda, violent disorder and perverting the course of justice.
The 46-year-old first came to prominence 22 years ago when he was convicted of animal cruelty after he was caught keeping a jaguar and a serval - an African wild cat - in his garage.
His friend and "enforcer" Reilly has 59 previous convictions for a variety of offences.
CAB told the High Court that both men are part of a criminal organisation involved in serious crime and the supply of heroin, cocaine and cannabis in Ballyfermot and west Dublin.
It said O'Driscoll is the leader of the drugs gang.
The High Court also heard details of an extortion racket they were involved in and how much money they were making.
Three construction companies building houses for Dublin City Council and Co-Operative Housing Ireland had their sites and staff attacked.
Diggers were set on fire with the drivers still in them and one driver was hit with bricks as he fled the cab.
A CAB officer also outlined how two officials from Dublin City Council were not only aware of the attacks, but also recommended to the builders that they hire O'Driscoll and Reilly.
One official told one builder that the two criminals were employed to carry out fencing and ensure there were no problems or any anti-social behaviour on the sites.
That builder was told to pay €1,500 plus VAT every week.
The other council official introduced Reilly to another builder as 'David' and told him 'David' would be providing security for €1,200 a week to be paid in cash and that the money could be reclaimed from the council.
The attacks stopped once the two criminals were hired and put on the payroll.
O'Driscoll and Reilly’s lifestyles included flights abroad, luxury holidays, high end cars and properties, which CAB said were financed by extortion, drug dealing and tax offences.
Reilly got married in 2011 in Ibiza.
The men's accounts showed various lodgements from the building companies, including sums of over €35,000, €39,000 and €85,000.
In total, CAB seized over €250,000 along with a mobile home in Courtown and a horsebox, which the High Court declared to be the proceeds of crime.
O'Driscoll and Reilly tried to claim they were legitimately involved in fence maintenance, but Ms Justice Carmel Stewart rejected that because she said if they were they would have had tools, equipment and VAT records.
The judge said she believed O'Driscoll was a drug dealer in Ballyfermot and the wider Dublin area and that both he and Reilly were involved in serious criminality.
The building companies, she said, "had to do something to protect their sites and machinery" and "had no choice but to pay this money in order to acquire protection, safety and security to continue the legitimate work they had been contracted to do".
Senior Counsel for the State Benedict Ó Floinn said the court might ask "what is going on in this city that Dublin City Council and building companies would see it as appropriate that individuals such as (O'Driscoll and Reilly) should be paid simply so that housing can be built in the areas that need it most".
Dublin City Council said last night it could not answer that question and was investigating the matter.