Chairman of NAMA Frank Daly and Finance Minister Michael Noonan
You may recall the sale of Nama’s property loan portfolio in Northern Ireland – the biggest loss on a Nama loan sale for Irish taxpayers.
The sale is now the subject of investigation by the National Crime Agency in the UK and the Securities and Exchange Commission in the US.
You may also recall how Stormont’s Committee for Finance and Personnel carried out a ‘fact-finding’ review of the sale for eight months.
Publication of an 18-page report on the progress of this review was embargoed until just after midnight this morning.
It criticised Nama and Finance Minister Michael Noonan – specifically for Nama refusing to give oral evidence to the committee; for Minister Noonan not encouraging Nama to give the same; and for Minister Noonan not stopping the sale of the Northern Ireland portfolio once he became aware that bidders PIMCO were due to send a sum of money to Northern Ireland Nama advisor, Frank Cushnahan.
From the report…
For its part, DFP [Department of Finance and Personnel] provided initial oral evidence and papers on 23 July 2015, but subsequently delayed providing further evidence until 9 October 2015, after it had concluded an internal file review and engaged with the NCA.
NAMA, on the other hand, while agreeing to answer questions in writing, refused to give oral evidence. The reason cited by NAMA is that the appropriate forum to which it should account for its activities is the Oireachtas and to committees established by the Oireachtas.
While the Committee does not dispute this point, it believes greater co-operation from NAMA would have assisted it in fully understanding the DFP-NAMA relationship since 2009.
As with the oral and written evidence received from the other stakeholders, including the documents received from the Republic of Ireland’s (RoI) Department of Finance and NAMA, the Committee placed the DFP papers in the public domain, except for seventeen documents relating to individual borrowers.
In this latter case, DFP cited data protection and commercial sensitivity concerns for its request that the documents were not to be released. The Committee, however, took legal advice on this matter and continues to pursue the issue with DFP.
In addition to the aforementioned evidence gathering exercise, the Committee accepted an invite from the Dáil Public Accounts Committee (PAC) to make a formal address on the progress of the review. This invitation was made in light of the respective committee inquiries into the Project Eagle sale.
During the address on 1 October 2015, the Chairperson also took the opportunity to point out that there was an increased onus on NAMA to appear before the Committee, even simply out of courtesy and respect for the institutions in Northern Ireland.
The Committee notes with regret the decision of the NAMA Board not to suspend the Project Eagle sales process once PIMCO had disclosed to the Agency in March 2014 that PIMCO’s proposed fee arrangement with the Brown Rudnick international law firm included also the payment of fees to Tughans, a Belfast law firm, and to a former external member of NAMA NIAC. From the evidence to date, the Committee considers this development to be a core area of concern within the entire sale and purchase process. The need for further information and clarification in this regard underlines the case for NAMA attending an oral hearing of the Committee.
Whilst it is does not fall to this Committee to pursue, given the seriousness of the revelation by PIMCO, it is unclear why the Irish Government’s Minister for Finance, Michael Noonan, did not intervene at this point, by exercising his general powers of direction over NAMA to suspend the sales process until matters were investigated fully. The Committee also notes that Minister Noonan did not inform the Northern Ireland Executive of this development. In addition, the Committee regrets that Minister Noonan did not encourage NAMA to attend an oral hearing of the Committee.
The Committee established that NAMA ‘…had no knowledge of meetings between Mr Cushnahan and prospective purchasers of NAMA-secured assets in Northern Ireland…’ including whilst he was on the NAMA NIAC. This is deeply concerning to the Committee.
The Committee also noted from the BBC (NI) Spotlight programme that the other former external member of the NAMA NIAC, Mr Brian Rowntree, stated that the NIAC members had access to information which was of a ‘commercially sensitive nature’ and which offered ‘commercial opportunity’ and would have been of some value to a bidder for Project Eagle.
This is of particular significance as it appears to contradict the position adopted by NAMA to date. For example, in written evidence to the Committee on 27 November 2015, NAMA stated that the external members of the NAMA NIAC ‘never had access to confidential information’. Furthermore, in evidence to the Dáil PAC on 9 July 2015, the NAMA Chairman, Mr Frank Daly, stated that the external members of the NAMA NIAC ‘did not gain any confidential information or any useful insider information from being a member of that advisory committee’.
Therefore, given these seemingly contradictory positions, the Committee recommends that a full examination is made of what precisely was discussed at the NAMA NIAC meetings and what information was shared with the NIAC members.
The Committee found the refusal of NAMA to attend an oral evidence session particularly unhelpful. NAMA needed to be more open and accessible given the importance of the Project Eagle portfolio to the Northern Ireland economy. The Committee does not accept NAMA’s rationale for not attending an oral hearing of the Committee, especially given that Agency representatives have previously held many meetings with Ministers and officials in Northern Ireland.
Read the report in full here
Previously: Spotlight Falls On Noonan