"Why did he turn over to the Brits? And did he really, fully go over? Or did he remain a double agent for the British and the IRA? We just don't know," said Brian Feeney, a Belfast author of a history of the Sinn Fein-IRA movement.
Donaldson, who was shot to death Tuesday at age 55, joined the Provisional IRA in 1970, the year the new group began its violent campaign to wrest Northern Ireland from the United Kingdom. Soon he was convicted for a bomb plot. He shared a cell block with IRA icon Bobby Sands, who led a 1981 hunger strike in which 10 inmates died.
"I'm sure nobody who joined the republican movement as a young man, and was friends with Bobby Sands, could dream of ending up like this," said Francie Brolly, a Sinn Fein councilman and one-time Donaldson friend. "He might have dreamed of being a hero, of being shot by the British army, of having a grave which his family and friends could visit with pride."
Prison also meant brainstorming alongside future Sinn Fein leader Gerry Adams and other IRA activists.
Adams became president of Sinn Fein in 1983 and began steering the movement toward conventional politics. Donaldson's assignment outside prison was to be a key intelligence officer abroad for both the IRA and Sinn Fein.
Around that time, Donaldson was recruited by agents from Britain's MI5 spy agency and the Special Branch intelligence arm of the Northern Ireland police. Donaldson subsequently said he did it "after compromising myself during a vulnerable time in my life," but offered no specific reason.
Analysts suggest Donaldson may have been wooed, or coerced, into the spying game because of his reputation as a womanizer — a dangerous appetite, because British intelligence agencies have used female agents and informants to strike up relationships with IRA men.
Throughout the 1980s and early 1990s, Donaldson traveled as a go-between for the IRA and its overseas friends: Irish American militants, Basque separatists, the PLO and other Middle Eastern terror groups.
Feeney said, in retrospect, it should have set off Sinn Fein-IRA alarm bells that Donaldson moved so freely despite his criminal record.
He said Donaldson's British handlers were trying to promote moderation and politics in Sinn Fein-IRA circles, and appear to have found a strategic asset in Donaldson.
Donaldson, Feeney said, coordinated Adams' first visit to the United States, and helped marginalize activists who didn't support the peace process and the leadership of Adams and Sinn Fein deputy leader Martin McGuinness.
After Northern Ireland's 1998 peace deal, Sinn Fein gained a place in a power-sharing government — and Donaldson became Sinn Fein's chief of administration, able to intercept documents of interest to both sides.
In October 2002, police charged him, his son-in-law and a British civil servant with stealing thousands of documents of use to the IRA and Sinn Fein: from home addresses of prison officers to transcripts of telephone chats between British Prime Minister Tony Blair and President Bush. Power-sharing collapsed and Sinn Fein was blamed.
But in December, British prosecutors dropped all spying charges, citing "national interest." Sinn Fein interrogated Donaldson and extracted his confession. Adams said Donaldson had cooperated with his British handlers to fabricate the spying operation; within hours, Donaldson appeared on TV to agree he had formed the center of a British conspiracy.
But some analysts say Donaldson was reading a Sinn Fein-authorized script designed to play down the party's embarrassment over its failure to identify him as a traitor sooner. They say detectives investigating the IRA spy ring did not learn Donaldson was on the payroll of Special Branch and MI5 until after his arrest.
"To say, as Sinn Fein does, there was a British conspiracy to bring down power-sharing doesn't square with the facts as I understand them," said security expert Chris Ryder.
Ryder said he was confident Donaldson had not told his Special Branch or MI5 contacts he was pilfering documents. Special Branch, which normally conceals the identify of its informants from other police units, revealed the truth only when other detectives arrested Donaldson, Ryder said.
So was Donaldson an IRA intelligence agent, a British spy, or both?
"This is going to be an enduring mystery," Ryder said. "The answer died with Denis Donaldson."