Tag Archives: PAC

Yesterday morning.

At a meeting of the Public Accounts Committee.

The Comptroller and Auditor General Seamus McCarthy spoke about the procurement and management of contracts for direct provision centres.

In his opening statement, he explained that €57million was spent on accommodation for asylum seekers in 2015. He then went on to criticise how direct provision management contracts were procured for the 28 commercially run centres across Ireland.

He also stated: “Contracts did not set performance measures and there was limited provision for penalties for under-performance by suppliers.”

The General Secretary of the Department of Justice Noel Waters was also present at PAC and, in his opening statement, said if direct provision had not been established in 2000, there “simply would not have been even the most basic shelter available” for people seeking asylum in Ireland.

He also said “there are no cheaper alternatives to direct provision”.

From Mr McCarthy’s opening statement:

At December 2015, there was a total of 35 direct provision centres in operation — seven State-owned centres, and 28 centres provided by 22 commercial suppliers. Almost 4,700 individuals were being accommodated in the centres at the year end. The Department also operates two emergency reception and orientation centres to cater for persons who already have refugee status.

“The total cost to the Department in 2015 of providing accommodation and related services to asylum seekers and refugees was €57 million. The level of accommodation required is demand-led and difficult to predict. It is influenced by the number of asylum seekers, their length of stay in direct provision and, because there is no obligation to avail of direct provision, the number who opt to do so.

“The report notes that in mid-2016, the average length of stay was 38 months with 450 residents, or 10% of the total, living in direct provision for more than seven years. 23% of residents or 950 people, continued to reside in direct provision even though their cases had been finalised. This included 667 people or 16% who had been granted a status permitting them to remain in Ireland; and 283 or 7% who were subject to deportation orders.

Two commercial companies were contracted to provide services such as catering, cleaning and maintenance at the seven State-owned centres. We found that competitive processes had been used to procure those services.

In contrast, the Department had not used competitive processes as set out in public procurement procedures to procure the 28 commercially-owned and run centres. Instead, it seeks ‘expressions of interest’, evaluates the responses and then agrees contract terms with selected providers.

“The Department’s view is that this equates to the ‘negotiated procedure’ provided for in EU procurement rules. However, use of that procedure is only permitted in certain limited circumstances that we could not see existed in relation to direct provision. The Department stated that it discussed the matter with the Office of Government Procurement but hadn’t identified a procurement method to replace the current procedure.

“The examination also found that effective management of contracts was made more difficult because not all contract deliverables had been expressed in a way that could be quantified or measured. This increased the risk that standards of accommodation and services would not meet asylum seekers’ needs or would be inconsistent between centres.

“In addition, contracts did not set performance measures and there was limited provision for penalties for under-performance by suppliers. The Department agreed to the report’s recommendation to review the standard contract, and the Accounting Officer will be able to update the Committee in that regard. Service delivery in the centres is monitored by physical inspections of premises, information clinics for residents of centres and review of complaints by residents.

“However, the findings from this monitoring are not collated and used to assess service delivery performance. The Department committed to introduce procedures to formally record such inspection findings and complaints, which should inform discussions with centre managers and owners. Even though there was a low level of complaints by residents, information from other sources suggests that there is a significant level of dissatisfaction among residents about the quality of the accommodation and/or services provided.

A revised complaints procedure introduced in 2015 provided for an appeal to an independent appeals officer where a person was not satisfied with how their complaint was dealt with. However, at the time of the examination, an independent appeals officer had yet to be appointed.

“The report recommended that the Department review the complaints process to identify reasons why residents may not be raising issues. The Department noted that the revised complaints procedure largely addressed this issue but undertook to examine ways to make the complaints process more open and transparent.

“Members may also be aware that, from early April this year, residents of direct provision can now bring a complaint to the Ombudsman, or to the Ombudsman for Children, if they are unhappy with how their original complaint was dealt with.”

From the Secretary General at the Department of Justice Noel Waters’ opening statement:

From 2000 to date some 60,000 people have been accommodated in direct provision. Equally they have been provided with full access to the State’s medical and education services. The system is not perfect by any means and we are continually seeking to improve it.”

“The reality is that had the State not adopted the direct provision system, there simply would not have been even the most basic shelter available for this group of people who arrived and continue to arrive to our country.”

“At the start of this year there were 4,465 persons living in this accommodation. However, I am glad to say – and this is a significant change – that, of those, 72% have been there for three years or less since the date of their application. This compares to 36% who were there for 3 years or less when the data was compiled for the Working Group on Direct Provision and related matters in 2015.”

“To put it another way, there has been a complete reversal in the length of stay figures since the Working Group examined the matter.”

“Full board accommodation in keeping with the policy of nationwide dispersal is offered to
residents while their application for protection is being processed. It is important to note that not every person who seeks international protection in Ireland choses to accept the offer of full board accommodation and many choose to live with family or friends in communities across the country, as they are entitled to do.”

“But if this system was not in place, already vulnerable people who have sought protection in the State would join the lengthy waiting lists for social housing or enter the private rental market with little hope of finding affordable and secure accommodation.”

“That is the very situation that obtained which gave rise to the direct provision system being put in place in the first place. The offer of State-provided accommodation is a guarantee that every person who walks into the International Protection Office today will, tonight, have a bed, full board and access to medical care.”

“Moreover, their children will have access to our first and second level education system on
the same basis as anyone else.”

“Of course no system is without room for improvement and our challenge is to continually
enhance and develop the entire system so that the best possible set of facilities and services can be provided to those in our care.”

“…There are no cheaper alternatives to direct provision – we have explored the options in this respect; in fact they are much more expensive – and in any event given the critical shortage of housing in the State they are not realistic.”

The PAC meeting can be watched back here

Previously: 17 Years Ago Today

Heard It Before

They Don’t Care

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Garda Commissioner Nóirín O’Sullivan with two mounted gardaí this morning outside Farmleigh House as she met school students who have made projects related to policing matters for the BT Young Scientist competition

You may recall how, in March, the Public Accounts Committee (PAC) received a 44-page Garda Internal Audit Section (GIAS) report on serious financial irregularities at the Garda College in Templemore.

It also received a further 13-page interim audit report in relation to how the recommendations of the GIAS report were being implemented. This was carried out by the head of internal audit Niall Kelly.

Readers will recall how the GIAS report was the subject of an article by John Mooney, of The Sunday Times, on January 22.

Yesterday, Garda Commissioner Nóirín O’Sullivan’s appeared before the PAC to field questions on these reports.

Further to this…

Conor Lally in today’s Irish Times reports:

At the PAC meeting, which lasted more than five hours, the Commissioner said that in July 2015, she was having a cup of tea in a room in the Templemore college when [director of Garda human resources, John] Barrett informed her there were problems.

The meeting was brief and it was the first time she knew of any concerns in relation to spending at the Garda training college, she said.

However, Mr Barrett then contradicted her evidence. He said the meeting lasted for more than two hours.

He produced notes which he said he had taken at the time he met her and in which he had recorded the start and finish time of the meeting, as well as who was present, the issues discussed and the order in which people had walked into the room.

Nóirín O’Sullivan in new crisis over Garda college finances (Conor Lally, The Irish Times)

In addition, RTÉ reported yesterday evening:

The head of An Garda Síochána’s internal audit system has told an Oireachtas committee he believes he was “duped” when he was told that action would be taken in relation to financial irregularities at the Garda College in Templemore.

Speaking before the Public Accounts Committee, Niall Kelly said there was a different culture in the force and he said he got caught in “circling the wagons” as late as 2015.

Mr Kelly said in his view certain laws were broken; procurement legislation was breached but these issues need to be further investigated.

Head of garda audit system says he was ‘duped’ over Templemore (RTE)

More to follow.

Previously: Free At 2.30pm?

‘I Knew Full Well It Hadn’t Been Discussed At PAC Because I’m A Member Of PAC’

Sam Boal/Rollingnews.ie

UPDATE:

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This lunchtime.

Garda Commissioner Nóirín O’Sullivan held a press conference, in light of yesterday’s PAC meeting.

At the meeting, differences emerged between her and the director of human resources John Barrett’s account of when and how he raised concerns with her about the Garda College. She said he raised his concerns in a brief meeting over a cup of tea while he said it was a two-hour meeting, in which he took notes.

There were also questions over whether she told the Department of Justice, as she was required to do and had been given legal advice to do so, and over head of An Garda Síochána’s internal audit Niall Kelly claiming that he felt he was “duped” when he was told action would be taken when financial irregularities were found and that he faced the “circling of wagons” regarding the same.

On RTÉ’s News At One, Paul Reynolds reported on the press conference with a clip from Ms O’Sullivan saying:

“Well, you know, regardless of how long the meeting took place on the Garda College, I think the issues and facts speak for themselves. Mr Barrett, absolutely as line manager in the college, when he became aware of issues, which raised alarms for him, he raised them with his line manager. His line manager raised those issues with myself and the two deputy commissioners on the 27th of July. On the 28th of July, there was  a group formalised which the CAO had been working on and that group met thereafter.”

The important thing here is there is always full transparency around this issues. So on the 28th of  July, the date after that meeting, this group was formalised and it was put into place. There were representatives from the Department of Justice on that group. The objective was to make sure that a) that the matters were dealt with, that there was full transparency in relation to the matters dealt with and that we understood fully what the complexities of the issues were. And, again, we have to remember, this is something that is going on for over 30 years.

“The funding model in the college dates back 30 years. There were several reports as we have heard into the way these matters needed to be regularised. The important thing is, in July 2015, when I, as accounting officer, found out about these issues, we immediately took steps to begin to address it. Those steps have led to revised administrative structures in the Garda College. Assurances from the line managers there, including the chief administrative officer and the head of internal audit, that what happened then cannot happen now.”

“And we will make sure that that continues to be robustly put in place and we make sure that the assurances that we all need, that the practices which we are totally unacceptable and cannot happen again.”

Listen back in full here

Pic: Rollingnews.ie

UPDATE:

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Yikes.

Sam Boal/Rollingnews

kerins

Former Rehab boss Angela Kerins

Further to yesterday’s post on the award of 75% of costs to losing party Angela Kerins in her case against the Public Accounts Committee, Broadsheet commenter Harry Molloy asked me to come back to readers when the full written judgment had been published. It is now available here.

The justification for the award of costs is set out by the Court at paragraphs 26-33 and appears to be as follows:-

(i) The PAC has an important function. Questions concerning the proper discharge of its function and the conduct of its members and the legal safeguards (if any) available to witness who appear before it are matters of public importance, involving questions of freedom of speech in Parliament, the separation of powers and the extent to which the court may intervene in the affairs of the Legislature.

(ii) Ms Kerins attended before the PAC in a voluntary capacity and much of what was put to her and said about her was damaging to her reputation personally and professionally. By bringing her action, Ms Kerins cast a light on the position of persons who volunteer to appear before the PAC. The institution of proceedings on her part was a proportionate reaction on her part to what had occurred and as such and the fact that she had a personal interest in the outcome of the application should not preclude her obtaining her costs.

The implication from the ruling was that Ms Kerins had not been well treated by the PAC and therefore it was justifiable for her to seek to clarify the law in relation to the position of witnesses appearing before it.

There is also an implication that she performed a public service in alerting potential witnesses to the risks of appearing before the PAC.

Although within the (very wide) parameters of the discretion laid down by previous case law, the ruling does break new ground in that it sanctions an award of costs to an unsuccessful litigant with a personal interest in proceedings on a matter of public interest where that litigant acted proportionately in bringing the proceedings.

It will be interesting to see what implications this ruling will have for Denis O’Brien’s costs in his recent unsuccessful application for parliamentary privilege. Will the richest man in Ireland be entitled to his costs on a losing case on the basis that he acted ‘proportionately’?

And, more pressingly, what does proportionately even mean?

*stirs coffee*

Yesterday: Compo Claim Madness

Rollingnews

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The Public Accounts Committee is launching its report on the sale of Project Eagle.

Now.

The chair of PAC, Fianna Fail TD Seán Fleming said:

“The committee considers that it was not appropriate for Nama, as the contracting body, to meet with Cerberus representatives the day before the Project Eagle bid closing date. It could have given the perception that Cerberus was benefiting from preferential treatment.

“Also. The committee considers that it was not procedurally appropriate for the Minister for Finance [Michael Noonan] to meet with senior Cerberus representatives on the day before the Project Eagle bid closing date. This could have given the perception that Cerberus was benefiting from preferential treatment.”

Facebook live link here

Read the report here

Previously: ‘Not Appropriate’

Eagles, Vultures and Turkeys

UPDATE:

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From top: Daniel McConnell, of the Irish Examiner; Hugh O’Connell, of The Sunday Business Post, and Josepha Madigan, Fine Gael TD and member of PAC

You may recall how, on Sunday, February 12, in The Sunday Business Post, Hugh O’Connell and Jack Horgan-Jones reported on a draft working paper by the Public Accounts Committee into Nama’s sale of Project Eagle.

They reported:

The paper said it was “not appropriate” for the Department of Finance to meet with the ultimately successful bidder, Cerberus, in the days before the closing date for Project Eagle bids. It similarly states that it was “not appropriate” for Noonan or Nama to meet with Cerberus the day before the Project Eagle bid closing date – and that this could be perceived as “special treatment”.

This morning.

PAC’s report no longer states the Department of Finance and the Minister for Finance Michael Noonan’s behaviour was ‘not appropriate’. Instead, their behaviour was ‘not procedurally appropriate’.

Why was it changed?

From the press conference…

David Davin Power (RTE): “You found that Michael Noonan meeting Cerberus wasn’t ‘procedurally appropriate’ and I know there was a contention about that on the committee. Fine Gael members voting against it. But Michael Noonan says that he never had an adequate opportunity to respond to what was ultimately an adverse finding against him and that he’s been unfairly treated, effectively, by the committee.”

Sean Fleming: “Well, he said that, based on the original working document that said it was ‘inappropriate’ but the wording in the report published today refers to the procedures that allowed that meeting to happen. It was procedurally inappropriate. So it’s not quite the same as what was in the original report. And that word is there for a reason. Because this committee is precluded from finding specific fault against an individual person. And we’re looking at the process of that meeting, not specifically the person who attended. I would [inaudible] the distinction between the finding in relation to Nama, where we say it was inappropriate, because we were finding that the body, the corporate body of Nama, rather than that one person, acted inappropriately. But we can’t use that particular word due to legal restrictions, in relation to one individual.”

Davin Power: “But why did you seek to use that word if it was legally suspect in the first place…”

Fleming: “The committee never sought to seek that. There was a working document prepared after some 30,000 sheets of paper presented to the committee and after 11 public hearings. The committee never used that particular wording. The only wording that the committee settled on is the wording in the report.”

Davin Power: “Could you ask one of the Fine Gael members [of PAC] to respond to that point? Are you happy…[inaudible].”

Fleming: “Peter [Burke], if you’re happy?”

Peter Burke: “Thank you very much. First of all, I think to use the words ‘procedurally inappropriate’ is not fair. I would point out that the Minister did attend the PAC meeting, even though he’s not legally required to do so. He spent five hours under intense questioning. He brought forward all information and answers and answered everything very clear and concise and to see a situation whereby he was actually denied natural justice because the response that’s in the report is to a media leak which appeared on the Sunday Business Post. So, in other words, he never got due process or was questioned on the content of this assertion.

“And, to point out, Section 9 of the Nama Act is very clear. That it is independent in its functions in terms of its role with the minister and previous people have brought this up, including our chairman when the act was [inaudible] in the Dáil in 2009, in terms of to keep it outside of the realm of politics, I mean that was very, very important. And to suggest that it’s procedurally inappropriate, one has to ask: what is the procedure? And there is none. If the minister has clear legal separation and there is a former US secretary of the treasury coming over to Ireland to discuss, from banking to insurance to asset management, I think it would be unwise for any minister not to meet him.”

Later

Burke: “… the commercial activities of Nama are driven by the board. The minister has no role in this. And even, as a process, it was mentioned that the minister should have called off the sale, but at that time, he’d no legal power to do so. And there’s departmental legal advice, which was mentioned at the committee here, in relation to that.”

Daniel McConnell (Irish Examiner): “But are you not playing politics with it now? Are Fine Gael not playing politics with the PAC, for the first time in its history, in 94 years, you caused a vote at the PAC, purely to protect the standing of Michael Noonan?

Burke: “No, Danny, that’s not correct. If we look at this, in a fair and balanced fashion. If a minister, who is not legally obliged to attend the PAC, does so of his own free will, in the interest of fairness, in the interest of transparency, on foot of that, that he is denied the right to due process, to respond to a charge that was put to him, that he was never asked one single question on, I think that’s an incredible part of this report. That the minister was denied that right to respond to an assertion that he was never…”

McConnell: “So, who put it in the report initially then? Because this is important. Who put the initial finding of ‘inappropriate’ in the report? Was it a civil servant?”

Burke: “Here is a draft document

McConnell: “So a civil servant…

Burke: “…which was leaked to the Sunday Business Post…”

McConnell: “So it was a civil servant  who put it in, is that what you’re saying?”

Burke: “It was a draft document, I can’t answer that….”

Fleming: “I will answer that, and I will call on David Cullnane [Sinn Fein] next. I, as chairman of the Public Accounts Committee, supervised directly, personally..”

McConnell: “So it was your, that was your, that was your language?

Talk over each other

Fleming: “…reporting in the first instance. What I do want to clarify, people mightn’t have go to it. We put a specific appendix in the report, on page 86, on the issue. We record fully and faithfully everything in respect of the minister’s response. First of all, in that, when we came to that issue of whether or not, at our meeting, and it’s all documented there [inaudible] we had three or four meetings, and Peter and his [Fine Gael] colleagues proposed wording to say, rather than it was ‘not procedurally correct’, to put the wording it was ‘not advisable’. So the board members were satisfied that the report should say it was ‘not advisable’ of the minister. That was voted down and the other wording was put forward.”

“But I just want to respond, before I call on David Cullinane, it was fortuitous in a way that there was a leak because that did give the minister to respond and the content of the letter received by the minister was examined closely by the parliamentary legal office in this house. And [inaudible] essentially responded to any allegations that we were about to make. Even though his letter came in before we concluded. And I do want to say, this is the transcript, the 82-page transcript of the meeting, of the Public Accounts Committee on Thursday, the 6th of October 2016. And I have to say that that meeting, the minister and the people on his side were the only people aware in the room, at that time of the meeting with Cerberus. No member of the committee was aware that a meeting ever happened. And the minister gave no indication whatever of that meeting. To suggest we didn’t ask him something about which we knew nothing about is unusual. He had four and a half hours at the meeting when we invited him in to talk about the sale of Project Eagle. And he spent four and a half hours discussing it and made no reference to that meeting. And there is the transcript if people want to check it.”

Later

Hugh O’Connell (Sunday Business Post): “Do you think you may have dropped the ball, as a committee, in not asking him if he had met Cerberus? And secondly, when you did become aware of it, why didn’t you ask him about the meeting via correspondence?”

Fleming: “The answer to that is we didn’t drop the ball because we weren’t aware the game had happened. Right? No member of the PAC were aware, at the time, that that meeting…”

Josepha Madigan: “Sorry, that’s incorrect. It was subject to FOI, the minutes were actually given in correspondence on the 4th of November…the 8th of November [2015] to the committee, so they were fully aware of…”

O’Connell: “So, why then, did you not write to Michael Noonan and ask him: why did you have this meeting? And what was the purpose of this meeting?”

David Cullinane: “There was a note that was given to the committee under the Department of Finance that set out the official notes taken by officials, in terms of that meeting. And those notes clearly show that Project Eagle was raised and it was raised in the context of Cerberus raised and they were told that it would be best dealt with at a meeting later that day with Nama which we believe that was also inappropriate. So, there was reference to Project Eagle in that meeting. And…”

O’Connell: “Why didn’t you ask him then? Why didn’t the committee call him back in?”

Alan Farrell: “That’s entirely inaccurate…it is entirely inaccurate….you’ve got your dates mixed up, David.”

Previously: Spotlight Falls On Noonan (March 1, 2016)

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Former CEO of Rehab Angela Kerins outside the High Court last July

Further to former CEO of Rehab Angela Kerins losing her High Court action against the Public Accounts Committee in January…

RTE reports:

Former CEO of the Rehab group Angela Kerins has asked the High Court not to award costs against her for her failed legal challenge to the Dáil’s Public Accounts Committee.

Lawyers for Ms Kerins told the three-judge divisional High Court the case was an “exceptional one”.

…This morning, lawyers for Ms Kerins began submissions in her application regarding costs of the action.

Senior Counsel John Rogers said he would be asking the court to depart from the norm where the losing party bears the costs of the action.

Kerins asks court not to award costs against her (RTE)

Previously: Check Your Privilege

Rollingnews

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Minister for Finance Michael Noonan

Yesterday.

In the Sunday Business Post.

Further to the newspaper’s report last week that the Minister for Finance Michael Noonan, the Department of Finance and Nama have been heavily criticised in a draft report by the Public Accounts Committee – in relation to Nama’s sale of its Northern Ireland loan book, known as Project Eagle…

And that, specifically, it was “not appropriate” for Noonan or Nama to meet with Cerberus the day before the Project Eagle bid closing date…

Jack Horgan-Jones and Hugh O’Connell reported:

Noonan has rebutted the finding, contained in the committee’s draft working paper and published by this newspaper last week, that it was “not appropriate” for him to meet with the US fund prior to its €1.6 billion purchase of Nama’s Northern portfolio. The draft said this could be perceived as “special treatment”.

…In a letter to the committee last week, Noonan expressed “great concern” over the draft findings, saying they were “extremely damaging” to him. He maintains that the meetings were not inappropriate and that he was never given a right of reply.

But committee members are doubling down this weekend. “Everybody agrees the fact that he met them is a problem. Everybody understands. Nobody can say it was a good idea to meet Cerberus on the day of the bids,” a PAC source said.

“The point of that whole meeting, the potential impression that meeting gave, will remain in [the report] . . . The essence of that meeting happening at that time and the impression of that meeting and having such access at that critical time will be in the final report.”

Another committee source said that while the language around the finding may change, it is extremely unlikely to be removed altogether.

Fine Gael TDs on the committee have indicated they will attempt to block any report which states that Noonan did not act appropriately.

PAC stands firm over criticism of Noonan-Cerberus meeting (Jack Horgan-Jones, Hugh O’Connell, The Sunday Business Post)

Rollingnews

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Minister for Finance Michael Noonan

In case you missed it.

At the weekend…

Hugh O’Connell and Jack Horgan-Jones, in the Sunday Business Post, reported:

Michael Noonan, the Department of Finance and Nama have all been heavily criticised in a damning secret report prepared for TDs investigating the sale of Project Eagle.

Nama’s controversial €1.6 billion sale of its Northern Ireland loan book three years ago is the subject of a number of damaging conclusions in a draft working paper to be discussed by TDs on the Public Accounts Committee (PAC).

It ultimately concludes that Nama’s sales strategy could be described as “flawed” and it has been “unable to demonstrate” that it got value for the Irish state.

The paper said it was “not appropriate” for the Department of Finance to meet with the ultimately successful bidder, Cerberus, in the days before the closing date for Project Eagle bids. It similarly states that it was “not appropriate” for Noonan or Nama to meet with Cerberus the day before the Project Eagle bid closing date – and that this could be perceived as “special treatment”.

The Public Accounts Committee will meet in private at 5pm tomorrow and then in public at 10am on Thursday.

Report: Noonan acted inappropriately – Nama sale flawed (Sunday Business Post)

Nama failed in corporate governance of Project Eagle, says draft PAC paper (Sunday Business Post)

Previously: Spotlight Falls On Noonan

Rollingnews

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Patrick Long, of Lazard and Co Ltd and Mary Lou McDonald, deputy leader of Sinn Féin

This morning.

At a meeting of the Oireachtas Public Accounts Committee.

Patrick Long, of Lazard’s – Nama’s loan sales advisor on the sale of Project Eagle – is answering questions in relation to the Project Eagle sale.

From the meeting…

Watch proceedings live here

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John Collison, deputy head of asset recovery at Nama at time of Project Eagle sale

Today.

Nama officials are appearing before the Public Accounts Committee to discuss the sale of Project Eagle in light of the Comptroller and Auditor General’s report into the sale.

Those appearing include John Collison, deputy head of asset recovery at Nama at the time of the sale; Michael Moriarty, now the current head of asset recover at Nama; Alan Stewart, senior divisional solicitor; and Donal Rooney, former chief financial officer at Nama.

Meanwhile…

*popcorn*

Today’s proceedings can be watched live here

Previously: 

Nama’s Project Eagle Anomaly

‘You Give Limited Information To Get The Answer That You Want’

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Nama’s chief executive Brendan McDonagh and a letter from Michael George, managing director of Fortress Capital, to Andrew McDowell, Taoiseach Enda Kenny’s former economic adviser, at 3.04pm on February 13, 2014

Further to the appearance of Nama officials – including chairman Frank Daly, chief executive Brendan McDonagh and audit committee chair and member of Nama’s Northern Ireland Advisory Committee Brian McInery – before the Public Accounts Committee yesterday…

US investment fund Fortress was the only underbidder in Nama’s eventual sale of Northern Ireland loan portfolio, otherwise known as Project Eagle, to Cerberus.

You mayrecall the following sequence of events, as outlined in the Comptroller and Auditor General’s report on the sale:

Nama approved a proposal to sell Project Eagle at a minimum price of £1.3bn over two meetings on December 12, 2013 and January 8, 2014.

On January 8, 2014, Lazard and Company Ltd were appointed as the loan sale advisor for Project Eagle.

On February 13, 2014, it was reported in the press that Pimco had approached Nama, back in 2013, to buy the whole Northern Ireland portfolio and, a day later, selected bidders were allowed to access information on the loans in a data room.

On March 12, 2014, Pimco withdrew from the loan sale process – after informing Nama of a  £15million success fee arrangement involving a member of Nama’s Northern Ireland Advisory Committee, Frank Cushnahan, London law firm Brown Rudnick and Belfast-based Tughans solicitors.

On April 3, 2014, Nama approved the sale of Project Eagle to Cerberus who also used the services of Brown Rudnick and Tughans solicitors.

You may also recall reports that Fortresss had to make a representation to the Department of the Taoiseach on February 13, 2014, before it was invited into the bidding process some five weeks after it had begun and Nama’s denial of the same.

During yesterday’s PAC meeting, Fine Gael TD Noel Rock had the following exchange with Brendan McDonagh.

Noel Rock: “When were Pimco initially informed there was going to be a sales competition?”

Brendan McDonagh: “Pimco were told, I think, post the board meeting in January 2014. We’ve always maintained to Pimco, that there was never going to be an exclusive off-market sale directly to them.”

Rock: “Okay. All right. Do we have the minutes for that board meeting?”

McDonagh: “Yes.”

Rock: “And it says that in it? Okay. Fortress, it was said earlier on, I don’t know if it was yourself of Frank said it, that there was no email to Enda Kenny from Fortress seeking…”

McDonagh:None. No. There was reporting effectively that Fortress had, it was reported in the media that Fortress had to email the Department of the Taoiseach, the official Department of the Taoiseach to get access to the thing. That’s actually completely untrue. I know the managing director, senior managing director of Fortress. I met him a number of times I think in 2009 and we stayed in touch over various things. He emailed me on the 13th of February 2014. My email is available to the, there’s nothing in it. Basically saying, ‘Brendan, how’s it going?’ Talked about the rugby match at the weekend and said, ‘I just heard through one of my colleagues that the Northern Ireland portfolio may be on the market, it’s something I’d be interested in’. I forwarded the email to my colleague and said, ‘please let this guy, get Lazards to contact him because, you know, I met this guy, and I had no issue with him. I would know Fortress in my previous life. And it was, Fortress were brought, they were contacted by Lazards, I think that evening on the 13th of February. They were sent an NDA,  an non-disclosure agreement and they were sent the NDA on the 14th of February and then they didn’t return their signed NDA, because you can’t get access to the data room until you supply the NDA, they didn’t return their signed NDA until the 26th of February, I don’t know why it took them 12 days to sign it. Maybe they had to go through their own internal compliance or whatever it was but they were invited into the process, on the evening of the 13th of February, but certainly on the 14th of February when they were sent the NDA.”

Rock: “I’m familiar with your emails. I’ve seen a copy of those. On the same day though, they did email the Department of the Taoiseach. Why do you think they would have done?”

McDonagh: “There was no, I don’t know what email the Department of the Taoiseach, I haven’t actually personally seen that email…”

Rock: “I’ll forward it to the secretary so you can be provided with a copy.”

McDonagh: “But I saw the media report but I was a bit surprised by that because I had got an email from the senior managing director of Fortress on the 13th of February myself and I arranged for Lazards to get in contact.”

Rock: “Okay, all right. Thank you. In, I think it was yourself Brendan, in a previous appearance before the PAC, I’m just going to quote this here if you don’t mind: ‘We appointed Lazard, then Lazard approached the nine biggest funds in the world, the guys who would have fire power and capital to be able to buy a portfolio like this. Then you listed the nine firms, including Fortress that you said had been approached. But it obviously seems, based on the discussion of the email with the Department of Taoiseach and indeed to yourself, that it wasn’t the case that they were approached; they, in fact, had to approach you. Do you accept this quote is now inaccurate, in effect?”

McDonagh: “No, I don’t think so. I don’t think that’s inaccurate, deputy, because Fortress were one of the people which were considered to be approached by Lazard anyway so, as I said, there’s a league table in terms of, you know, people, division one, division two, division three, so as people drop out, we were pushing Lazard to get more people into the process.”

Rock: “Right. So. So, like, I’m finding this hard to understand. Did Lazard approach Fortress? Or not? If so, why did they [Fortress] need to approach you?

McDonagh: “Well, all I can say to you, deputy, is as follows: On the 13th of February, I got an email from the senior managing director of Fortress, I got one of my colleagues to contact Lazard to say, ‘contact these guys in Fortress, find out if they’re interested or interested or not’. I don’t know personally when Lazard were going to contact Fortress or not, but I do know what happened on the 13th and 14th of February.”

Rock: “Okay.”

Letter via Mick Wallace

Related: Fortress had to apply for ‘late’ Nama sale bid (Mark Tighe, Sunday Times)