The small Mediterranean island nation of Cyprus has given citizenship and passports to more than 3,000 foreigners who agreed to invest at least $2 million in the country -- a "golden passport" that allowed the holders to travel visa-free throughout the European Union.
But this week Cyprus announced that it is ending the initiative after an undercover investigation by journalists appeared to show two lawmakers helping to arrange a passport for a fictitious businessman, despite being told he had a criminal record.
One of those lawmakers, Demetris Syllouris, the president of Parliament and the country's second most powerful official, resigned on Thursday. The other, Christakis Giovanis, resigned on Tuesday, and both men have denied any wrongdoing.
Cyprus was only one of several European countries that turned to offering what became widely known as "golden passports" to attract investments after their economies were crippled in the global economic downturn that began in 2008. In the last seven years, Cyprus has raised over 6 billion euros through the program -- about $7 billion dollars.
But some of the passport programs are now seen as gateways for crime and corruption, and a threat to the integrity of the European Union, since such passports grant the right to travel to the union's 27 member countries. The European Commission, the executive arm of the European Union, has said that programs in Bulgaria, Cyprus and Malta are at particular risk for corruption.
The Commission is considering possible legal action against Cyprus over the matter, said Christian Wigand, a Commission spokesman.
He said that European officials had "watched in disbelief" as the undercover investigation, produced by Al Jazeera and made public on Monday, purported to show high-level Cypriot officials willing to trade European citizenship for financial gain.
"European values are not for sale," said Mr. Wigand, repeating a statement made by the Commission's president, Ursula von der Leyen, in her State of the Union address last month.
The passport program bars anyone with a criminal record from applying. But Mr. Syllouris and Mr. Giovanis, were filmed saying that they would help obtain a passport for a wealthy Chinese businessman -- who, they were told, had fled China after being sentenced to seven years in prison on charges of bribery and money laundering.
"If there is a problem, we are not going to stop," Mr. Syllouris said in the footage aired by Al Jazeera. "You will have full support from Cyprus."
Another associate is shown in the video saying it was possible to use a fake name on the passport.
Cyprus's attorney general, George Savvidis, said the authorities would conduct an investigation to determine whether any criminal acts were involved.
Both lawmakers rejected the allegations of corruption, saying that they had actually been gathering evidence to relay to the authorities that fight money laundering. Mr. Giovanis also said that the situation was staged, and that he was entrapped into making the statements. Al Jazeera reporters posed as associates of the businessman.