Tag Archives: Project Eagle

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Yesterday.

During Leaders’ Questions, Sinn Féin leader Gerry Adams raised Project Eagle and the Government’s refusal to launch a Commission of Investigation into the sale of Nama’s northern Ireland loan book, known as Project Eagle.

Mr Adams came after the British National Crime Agency arrested two men as part of its investigation into the sale.

The two men were arrested in Co Down on suspicion of fraud offences and have since been released on bail pending further inquiries.

From yesterday’s debate…

Gerry Adams: “I understand the British National Crime Agency has arrested two people today as part of its investigation into NAMA’s Northern loan book, known as Project Eagle. For years now Sinn Féin and others have raised concerns about the sale of NAMA’s loan books, including the sale and purchase process for its Northern loan book. The Taoiseach and the former Tánaiste, Deputy Joan Burton, have accused the Opposition of conflating the matter. Deputy Joan Burton described it as just a “Northern tale”. I put it to the Taoiseach that it is actually a national scandal and a disgrace.”

“The sale and purchase process for NAMA’s Northern loan book has been the subject of serious allegations. It has been alleged that, as part of a cosy cartel that was in operation, insider trading took place, that payments were made to a golden circle and that illegal fixer fees were paid. This was brought to the attention of NAMA by a potential US bidder, Pimco. NAMA previously claimed that its Northern advisory committee was not privy to confidential information on the sale, but it has since been disclosed that the committee discussed potential purchasers on at least two occasions before the loan book was sold at a huge loss to Irish taxpayers.”

“There are investigations in the North by the National Crime Agency, NCA, the law society and revenue. There was an Assembly inquiry which found the Government’s approach very unhelpful. There are also investigations in the USA by the Securities and Exchange Commission, the FBI and other authorities. However, there is no investigation here. In this State, the Minister for Finance, the Government and NAMA have closed ranks.”

“The chairman of NAMA, Mr. Frank Daly, said he briefed the Minister in full, including on the scandal of a fixer fee of £15 million sterling, which is totally irregular and illegal. Despite this, the Minister failed to suspend the Project Eagle sale process or to inform the office of the First Minister or Deputy First Minister. The Assembly inquiry noted this failure with regret. This is a public interest matter, which must be fully investigated.”

Seán Ó Fearghaíl: “Get to the question please, Deputy.”

Adams: “Tá mé beagnach críochnaithe anois, a Cheann Comhairle. It must be fully investigated to get to the bottom of allegations of wrongdoing and cosy cartels which have cost the citizens of this State millions of euro. Does the Taoiseach not believe it is time for the Minister for Finance to make a full statement on all of these matters to the Dáil?”

Enda Kenny: “The Minister has made a full statement already and there has been quite a deal of discussion at the various Oireachtas committees on the question on NAMA. NAMA personnel at the highest level have responded and given much time on different occasions to discuss these matters.”

“If two people have been arrested, they have been arrested on suspicion of particular charges and I expect that the court system in the jurisdiction in which they were arrested will follow through on arresting them in the first instance. Obviously, it is not for me to comment on the court system of a different jurisdiction. If they have been arrested, I assume that it is for good reason in respect of activities that would be outside the law. I trust that this will see itself through that process and be judged before the courts.”

Peadar Tóibín: “Assumptions.”

Adams: “The Minister for Finance has not made a full statement to the Dáil. It is not just Sinn Féin which has these issues. Others have raised these issues consistently and in a very detailed way. It is impossible to get information from any of the Ministers on issues as serious as this one. The Taoiseach refused to establish a commission of investigation. NAMA is an arm of the State. It is dealing with the people’s money. NAMA is not accountable but it should be. It should command public trust and confidence in the business of securing the best possible value for Irish taxpayers and I, for one, have no confidence that it has done this.”

“I have seen this happen to the Taoiseach in that every so often an issue comes up but for all of his cleverness and skills as a politician, he is like a rabbit caught in headlights. This is a huge issue. There needs to be transparency, confidence and accountability. Why not depoliticise it? Why not simply open it up to those of us in the Oireachtas?”

“The people have suffered grievously because of the kinds of activities involved in selling off what were the people’s assets. Given the mounting public concern across the island, will the Taoiseach now commit to establishing a commission of investigation into the sale of Project Eagle?”

Kenny: “No, I will not. There has not been any allegation of wrongdoing against NAMA.”

Tóibín: “Incompetence.”

Kenny: “The Deputy informs me that two people have been arrested. I assume they have been arrested for good reason. Representatives of NAMA have appeared before the Committee of Public Accounts and have given very lengthy statements. They have been crystal clear and that from their perspective, there is no allegation of wrongdoing against NAMA. NAMA has done nothing wrong. It has been completely in compliance with the law and the conditions it was set up under. Coming in and asking for another commission of investigation about this is not the way forward. There is no allegation of wrongdoing against NAMA and at the highest level—–”

Tóibín: “There is an allegation of incompetence.”

Adams: “There was a fixer fee of £15 million.”

Simon Harris: “Not by NAMA.”

Kenny: “Representatives of NAMA have appeared before the Committee of Public Accounts and have given their statements and answered questions at length on all of these issues, and more than once.”

Transcript via Kildarestreet.com

Meanwhile…

Hmmm.

Previously: Spotlight Falls On Noonan

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A response from chairman of Nama Frank Daly to the Northern Ireland Finance and Personnel Committee this evening.

It follows the publication of the Stormont committee’s report on the sale of Northern Ireland’s property loan portfolio, Project Eagle – which was critical of Nama and Finance Minister Michael Noonan.

Previously: Contradictions And Refusals

Spotlight Falls On Noonan

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A statement from Belfast property developer Gareth Graham.

Mr Graham has settled his court action against US company Cerberus, the firm which eventually bought Nama’s Northern Ireland property loan portfolio, Project Eagle – which had a par value of €5.7billion – for €1.6billion.

Hmmm.

Action against US company Cerberus settled by businessman (Irish Times)

Previously: Contradictions And Refusals

Spotlight Falls On Noonan

Pic Mark Tighe

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From top: Taoiseach Enda Kenny, Michael Noonan and Northern Ireland First Minister Peter Robinson; Minutes of a meeting between Mr Robinson and Mr Noonan in which they discuss the sale of Northern Ireland’s Nama portfolio; and a clip of a secretly recorded meeting involving Frank Cushnahan – both on BBC Northern Ireland’s Spotlight last night

You may recall how Independent TD Mick Wallace, on several occasions in the Dáil last year, raised concerns about the sale of Nama’s Northern Ireland property portfolio, Project Eagle, in 2014.

On the first occasion, in July 2015, his microphone was turned off.

On another, in October 2015, after making yet another call for a Commission of Investigation into the Project Eagle sale, Mr Wallace told Taoiseach Enda Kenny:

“The Irish people have not been served well by Nama. It stinks to high heaven and you are involved in the cover-up because you refuse to do anything about it.”

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.

Further to this.

Last night, BBC Northern Ireland’s Spotlight programme, presented by Mandy McAuley, outlined the sequence of events which led to the portfolio eventually being sold to US private equity firm, Cerebus Capital.

Contributors to the programme included Sunday Business Post journalist Elaine Byrne and Independent Alliance TD and Sunday Independent journalist Shane Ross.

Ms McAuley first explained how former banker Frank Cushnahan is an “incredibly well-connected” Belfast businessman who, nine years ago, left his position as an advisor to the Northern Ireland Housing Executive to become chairman of east Belfast firm Red Sky – a company that worked for the Housing Executive.

She explained that Mr Cushnahan convinced the Housing Executive to forgive most of Red Sky’s debts so that its debts went from £250,000 to £20,000.

His behaviour was later criticised by a Stormont investigation which found his actions to be “totally unethical and could and should have been avoided”.

Two years later, in 2009, £4.5billion of Nama’s debt was owed by developers in Northern Ireland and politicians feared there would be a fire sale of property, prompting property rises to drop – a fear Northern Ireland’s Finance Minister Sammy Wilson told BBC’s Spotlight in 2011.

These fears, Ms McAuley explained, prompted the establishment of Nama’s Northern Ireland Advisory Committee.

And who did Sammy Wilson choose to sit on that committee?

Frank Cushnahan – who, Ms McAuley reported, held clinics for developers in Nama, where he would tell developers “how to survive” Nama.

Continue reading →

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https://www.youtube.com/watch?v=tSVFYnCUugM

You may recall previous claims made by Independent TD Mick Wallace in the Dáil about the sale of Nama’s northern Ireland portfolio, Project Eagle.

During Leaders’ Questions in the Dáil today, Mr Wallace made further claims, alleging that Nama gave him an ‘untrue’ answer in relation to a question he asked about Nama’s former head of asset recovery, Ronnie Hanna.

In addition, Mr Wallace said:

“Ronnie Hanna was part of a cabal to seek payment for affecting the biggest property deal in the history of the State.”

The Irish Times has since reported a Nama spokesman saying:

“Deputy Wallace has today falsely accused Nama of giving untrue answers to his questions. He is wrong to do so.”

Meanwhile, in response to his claims, Tánaiste Joan Burton told the Dáil:

As somebody who was involved in the building trade, I know from some of the public records and the media that he suffered. This does not mean that because he feels a very strong personal sense of grievance, which I understand, that his claims of wrongdoing against NAMA stand up.

From the Dáil proceedings…

Mick Wallace: “I have been co-operating with An Garda Síochána on a number of issues relating to NAMA and it has been back to me regarding some of these issues. As the Tánaiste is aware, I have asked many questions in the Chamber about NAMA but I have not got many answers. In fact I have got none. I have put some of the questions and others to NAMA directly and I have got answers from it, some satisfactory and some not. One of the questions I asked about Project Eagle was whether Ronnie Hanna, along with Frank Cushnahan or David Watters, ever met any US investment fund personnel. NAMA’s reply was “No”, that Mr. Hanna had no such meetings with these individuals. We now know that Ronnie Hanna, head of asset recovery in NAMA, did meet at least one of the US investment funds. NAMA’s answer to my question is not true.”

“PIMCO pulled out of the Project Eagle deal because its compliance department would not agree to the success fee. Cerberus replaced it and paid the success fee. What would PIMCO have got for this fee? What did Cerberus get for the fee? It got insider information and the ability to affect the deal. An executive of NAMA, Ronnie Hanna, was part of a cabal to seek payment for affecting the biggest property deal in the history of the State. The three individuals, Ronnie Hanna, David Watters and Frank Cushnahan, had information above and beyond what was available in the data room. David Watters had reviewed the business plan for many of the debtors.

An Leas-Cheann Comhairle Michael Kitt: “The Deputy is naming many names…”

Peter Mathews: “We need them.”

Kitt: “… and it is a long-standing convention that accusations should not be made against people outside of the House.”

Wallace: “These are all in the public domain.”

Robert Dowds: “Go before the Committee of Public Accounts on this.”

Wallace: “Frank Cushnahan was looking after the political side in the North and Ronnie Hanna was looking after matters inside NAMA in Dublin. We are not talking about Belfast; this is Dublin. This is at the heart of NAMA in Dublin, and this is on the Tánaiste’s watch. The Taoiseach assured us that NAMA had dealt comprehensively with all matters put to it at the Committee of Public Accounts, but what is this worth now? We need an independent commission of inquiry. I realise that Fine Gael certainly does not want one, but the Tánaiste is the leader of the Labour Party and she should ensure there is an independent commission of inquiry.”

Tánaiste Joan Burton: “With regard to Project Eagle, I am advised the loan sale was executed in a proper manner, and despite all the different charges the Deputy has made, and charges against named individuals who are not in a position to comment or defend their good name in the House…”

Bernard Durkan: “Hear, hear.”

Burton: “…but the Deputy has named them nonetheless, I am told the facts are there are no claims of wrongdoing against NAMA. However, the Deputy clearly has issues with regard to the people he has named.”

“Clearly, at the base or back of his particular complaints is probably his own unfortunate experience, to which he has referred on many occasions. Understandably, he has a very strong vested interest in, and probably even stronger feelings about, what happened in the context of the collapse in the values of properties when the economy and property valuations collapsed. A portfolio worth almost €6 billion, like many people’s personal domestic houses, lost 60%, 70%, 80% or 90% of its value. If the Deputy is saying this loss of value can be attributed entirely to NAMA, and not to the actual impact of one of the most devastating property crashes in the world, then I want to acknowledge he has suffered.”

Mathews: “It was a banking crash that led to a property crash.”

Burton: “As somebody who was involved in the building trade, I know from some of the public records and the media that he suffered. This does not mean that because he feels a very strong personal sense of grievance, which I understand, that his claims of wrongdoing against NAMA stand up. I said to him before on this that NAMA is answerable to the Committee of Public Accounts. I strongly advise the Deputy to take the issues he has raised here, if they are additional to the issues he has already raised, to the Committee of Public Accounts and seek to have them examined there. He knows as well, because we discussed it on a previous occasion, that in the North the Comptroller and Auditor General there is conducting a value for money review into the Northern Ireland sale, and I strongly recommend that the Deputy seeks to get the findings of this report and what it will have to say.

Mary Lou McDonald: “That report is happening here and not in the North.”

Kitt: “Under Standing Order 59 there is a mechanism whereby a Deputy can give prior notice to the Ceann Comhairle concerning matters in the nature of being defamatory and Deputy Wallace should avail of this. I ask him not to name people who are outside the House.”

Wallace: “Any allegations I have made against NAMA have zero to do with my business. I never had interaction with NAMA through my business. I did not go into NAMA. The Tánaiste seems to be deliberately failing to interpret what I have said. I have given her some new information and I have outlined how I was told untruths by NAMA when it was questioned. The Tánaiste does not seem to have a problem with this. This is shocking.”

Pearse Doherty: “Hear, hear.”

Wallace: “It has nothing to do with me; it has to do with the people. NAMA has failed to serve them properly. There are serious question marks. An executive of NAMA, Ronnie Hanna, in Dublin, deliberately interfered in the process. Does the Tánaiste not have a problem with this? Is she just going to let this flow on and not look for a proper independent commission of investigation into this? Is this possible? I find it hard to credit.”

Eric J. Byrne: “Say it before the Committee of Public Accounts.”

Dowds: “Go before the Committee of Public Accounts on this.”

Wallace: “I will put a number of questions to the Tánaiste, and she should get answers to them from NAMA. It might tell her the truth. What date and time and to whom was the Fortress bid submitted? What date and time and to whom was the Cerberus bid submitted? Were the bidders advised that the bids were to be the best and final bids? Were they advised that the reserve was £1.24 billion? When and by whom was Fortress advised that its bid was not successful? Did Fortress offer in writing or verbally to increase its bid? Mr. Hanna resigned six months to the day after the Cerberus deal went through. Why?”

Arthur Spring: “Does Deputy Wallace know the answers to any of those questions?”

Burton: “I appreciate the Deputy’s concern in the matter, and if he has had no contact with NAMA, I accept that, but I certainly have seen in the public media and I am aware that he was a very fine developer and builder who lost out, as so many others did, in the course of the property collapse in Ireland.”

Clare Daly: “What has that got to do with it?”

Mathews: “That has nothing do with it. How dare the Tánaiste say that? The Tánaiste should withdraw that remark as it has nothing to do with Deputy Wallace’s question.”

Burton: “The Deputy has set out on Leaders’ Questions a series of very detailed questions relating to a specific institution – NAMA – that is answerable to the Committee of Public Accounts. The Deputy is, I suppose, using a trick deployed by lawyers. He is asking a question and he is very confident he knows the answer to it but I have had no notice of it.”

Nama accuses Mick Wallace of making false allegations on Project Eagle (Irish Times)

Previously: Project Eagle And The €3.5 Billion Haircut

‘Cerberus Told Me I Was Going To Get Sorted’


Transcript: Oireachtas.ie

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https://www.youtube.com/watch?v=UfbJW6s97-0

Independent TD Mick Wallace

Independent TD Mick Wallace once again raised the sale of Project Eagle by Nama during Leaders’ Questions in the Dáil earlier.

And, once again, he called for a Commission of Investigation into the sale.

Mick Wallace: “If they needed any more proof of the need for a commission of inquiry into the workings of NAMA, Members got it at the meeting of the Committee of Public Accounts last Thursday. Deputy McDonald challenged NAMA about redactions in its responses to questions from the Northern Ireland inquiry and in particular, details of Frank Cushnahan’s conflict of interest declaration to the agency. NAMA’s representatives told the Deputy they could not give them to her and were not even obliged to so do. Answers will not be forthcoming without a commission of inquiry. There have been a great number of questions but there have been absolutely no answers and I still am not convinced the Government wants the answers. Members still do not know why NAMA allowed the Project Eagle process to continue despite the involvement of Tughans and Brown Rudnick, which had been involved in the Pimco deal. Members still do not understand how NAMA could possibly tolerate the idea of selling Project Arrow to Cerberus, which is under criminal investigation in America and Britain. How in God’s name can this be the case…”

Peter Mathews: “Hear, hear.”

Wallace: “…apart from the fact it makes no sense to sell Project Arrow in any event, given that 50% of it is residential and the country faces a housing crisis? It has a par value of more than €6 billion and yet NAMA looks to sell it for less than €1 billion. This simply does not make sense and the process should be stopped. If Cerberus is found guilty, what happens with Project Eagle? Will it be null and void? Will the entire process be undone? When Pimco’s potential criminal violation was found, did NAMA seek US legal advice? When NAMA found out, did it approach the Garda under section 19 of the Criminal Justice Act?”

Ceann Comhairle Seán Barrett: “A question please, thank you.”

Wallace: “If it did, when did NAMA so do? Did Lazard express views regarding the continued involvement of Brown Rudnick and Tughans or was it satisfied in this regard? Does the Taoiseach have a problem with the fact that Lazard, which ran the process for NAMA, also was involved with the bank that gave the money to Cerberus to buy it? Does the Taoiseach have a problem with that?”

Finian McGrath: “No problems.”

Enda Kenny: “I already have answered questions on this matter in the House, as has the Minister for Finance. The Deputy is aware two investigations are under way in this regard. He is aware of the interest from the United States. The Deputy has made or has been given information that he has brought to the House and he has gone to the Garda, on which I commend him. However, Deputy Wallace also is aware NAMA is responsible, through the Committee of Public Accounts to this House and the Oireachtas. I understand the Deputy has declined to give witness evidence to the aforementioned committee but he should do so. He has information or has been given information: somebody is supplying him with information, which is fair enough. He has used some of that in giving it to the authorities. However, he is making highly specific allegations here and I suggest he should accept an invitation from the Committee of Public Accounts to appear as a witness and give his evidence to the body through which NAMA is accountable to the Oireachtas and have justified the claims he has made or otherwise. I cannot speculate on a court hearing or hearings that are taking place in regard to Cerberus or any other company as to what the outcome of that might be.”

Later

Kenny: “I suggest to Deputy Wallace that while we can continue this kind of dialogue here on a weekly basis, he has been given or supplied with information and evidence…”

Mathews: “Which the Deputy has given to the Taoiseach.”

Kenny: “I suggest he take that information himself…as a witness before the Committee of Public Accounts…where NAMA can reply to the Deputy in the committee… That is what Deputy Wallace should do… Deputy Wallace can deal with the Chairman, Deputy McGuinness, and ascertain whether his allegations or evidence stands up…That is what Deputy Wallace should do… and the Deputy might well serve the national interest in a major way because whoever is giving him his piece of information, he should then test them as to whether they stand up.”

Clare Daly: “Is the Taoiseach going to allow Project Arrow?”

Barrett: “Deputy Wallace.”

Wallace: “I have been to the Garda and to the National Crime Agency. I have come into the House and put stuff before the Taoiseach who is ignoring it. What is he going to do about it? He is the leader of this country and he is ignoring serious questions and serious problems I am raising. Why does the Taoiseach not wish to do something about it?

Barrett: “Will the Deputy put his supplementary question? Thank you.”

Wallace: “At this stage, there is a strong belief that Cerberus was earmarked to get this project hail, rain or snow; that the whole thing was fixed up in order that it would get it. NAMA is involved in that and the agency cannot distance itself. The sales process is not much better then the purchase process.

Barrett: “Sorry, please put your question, thank you.”

Mick Wallace: “Are you satisfied that there was no collaboration with Cerebeus by a Nama insider, based in Dublin? Because I’m not. And you, if you want the answer, don’t bother your barney asking Nama for the answer because they’re not going to give it to you, no more than they’re not giving answers to the PAC. The PAC members themselves admitted last week that they do not have the authority or power to hold Nama to account. A Commission of Inquiry is the only way that you are going to get the answers we need. The Irish people have not been served well by Nama. It stinks to high heaven and you are involved in the cover-up because you refuse to do anything about it.”

Later

Enda Kenny: “You make the point that the Cerebus was earmarked for this project. You make the point that this was all fixed up, you make the point that somebody based here in Dublin was got at. Now, I think Deputy Wallace, these are pretty serious allegations. You make the point, ah yes, Taoiseach I’m involved in some kind of cover-up here and this is a situation that can only be resolved by a Commission of Investigation. Now, you’ve been to the guards, you’ve been to other authorities, I suggest to you now that you elaborate on the information you’ve given here and the allegation that you make in front of the chairman of the Public Accounts Committee.”

Meanwhile…

Full transcript to follow.

Oireachtas.ie

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Blogger Jamie Bryson speaking at Northern Ireland Finance Committee this morning

And in the Dáil this morning during Leaders’ Questions…

Micheál Martin: “I want to raise with the Taoiseach the sale of NAMA’s Northern Ireland loan book, known as Project Eagle. This is the largest sale in which NAMA has engaged to date. We know from correspondence to the Minister, Deputy Noonan, at the time that even though misgivings were raised by one of the bidders – Pimco, which made NAMA aware of fee arrangements with third parties including NAMA’s adviser on the Northern Ireland advisory committee – the Minister did not suggest to NAMA that the whole thing should be stopped in light of the stench that was emerging at that early stage. Of course, we know about the fee arrangements between the solicitors’ firms – Brown Rudnick and Tughans – and third parties. Deputy Wallace has alluded to this in the Dáil. Again, no attempt was made stop the deal. People ticked the boxes and said they got assurances when Cerberus came in, despite the fact that they used the same solicitors’ firms and the same fee arrangements to which NAMA had been alerted by Pimco. When I raised this issue with the Taoiseach in July of this year, I outlined all of my concerns. There are fundamental issues here because it involves the taxpayer. According to a report in this morning’s The Irish News:

One of the bidders for Nama’s northern debt portfolio expressed concern in a letter to the Taoiseach’s office over the business practices of third parties leading up to the £1.2bn sale. Fortress Investment Group, [apparently] one of the final three potential buyers alongside US rivals Pimco and Cerberus Capital Management, is understood to have sent the letter to the Department of the Taoiseach in February 2014.

An Ceann Comhairle Seán Barrett: “A question, please.”

Martin: “It seems that this letter “complained about business practices leading up to the sale of Nama’s loan book, dubbed Project Eagle”. Can the Taoiseach confirm that such a letter was sent to him and his Department? If so, can he confirm the contents of that letter and will he make arrangements to publish that letter? The Minister, Deputy Noonan, did not alert the Dáil at any stage about this entire saga until it was raised by a Deputy in the House. It is important for the Taoiseach to indicate whether he received such a letter. What happened in relation to any correspondence he received? What is his current position in relation to the ongoing investigations into Project Eagle?”

Enda Kenny: “This is a matter of very considerable concern. Obviously, questions about it have been raised and answered here previously. I think the Deputy said that a letter was sent to the office of the Taoiseach in February 2014. Is that his information?”

Martin: “That is what is being said.”

Kenny: “Yes. I do not know, but I will have it checked immediately. If such a letter was received, I will see what happened in respect of it being replied to or where that was sent to, I will have the letter published and I will come back to Deputy Martin as soon as possible. As I stand here, I cannot recall receiving a letter in February 2014. If the Deputy says it was sent to the office of the Taoiseach, I am sure there is a record. I will have it checked and I will respond to the Deputy as soon as I can.”

Martin: “I would appreciate it if the Taoiseach would do that. It appears that his office was asked to do so yesterday, but it did not respond to the questions that were put to it regarding this correspondence.”

Transcript via Oireachtas.ie

Hearing hears blogger claim of Robinson NAMA payment (RTE)

Previously: Project Eagle And The €3.5million Haircut

Pic: BBC Newsline

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Lawyer Ian Coulter

You’ll recall how Ian Coulter was the former managing partner at Tughans Solicitors in Belfast – which was involved in the sale of Project Eagle, Nama’s Northern Irish loan book – until he resigned in January of this year.

Late last night he released a statement for the first time since Mick Wallace told the Dáil, on July 2, that a routine audit of Tughans, “showed up where 7million in Sterling ended up in an Isle of Man…It was reportedly earmarked for a Northern Ireland politician or party.”

Last night, Mr Coulter said:

The concept of a Northern Ireland Nama deal was developed and significant work leading up to this deal was done by other business people in Northern Ireland, before any involvement of Cerberus (or any bidder). None of these other parties were from Tughans and none were politicans or relatives of politicians.

Through Tughans I was formally engaged to provide the required local counsel to Brown Rudnick. This was a commercial arrangement with Brown Rudnick, for which fees were discussed and agreed. No politician, nor any relative of any politician in Northern Ireland, was ever to receive any monies in any way as part of this deal. This was never discussed, assumed nor expected.

The deal itself was a straightforward one between a buyer (Cerberus) and a seller. Nama received what it has publicly confirmed is the full and disclosed value. No monies from Nama went towards any fees paid to Tughans. The money which has been called into question was part of the total legal and consultancy fees agreed as payable by Cerberus to Brown Rudnick. Cerberus did not engage or pay Tughans directly. Cerberus has acted completely professionally and properly at all times in relation to this matter.

The fees payable were paid into a Tughans company account supervised by the firm’s Finance team. In September 2014, a portion of the fees was retained by Tughans and I instructed Tughans’ finance director to transfer the remaining portion into an external account which was controlled only by me. Not a penny of this money was touched.

The reason for the transfer is a complex, commercially – and legally – sensitive issue and has been explained to my former partners at Tughans. It will be explained to the appropriate authorities and those entitled to that information as part of my continuing co-operation with any investigation.

The money which was transferred to an external account was not “discovered” or “retrieved” by the Law Society or Tughans during an audit, as some reports have incorrectly stated.

In fact, I transferred the money back to Tughans in early December 2014 and I brought this to their attention. From late November until early January, discussions took place to try to resolve the matter. In January 2015 these discussions broke down and I decided to resign from Tughans.

Terms and conditions for my resignation were agreed between me and Tughans. I have not received any personal financial benefit for my work on this transaction. Neither I nor any third party has received any part of the 7.5 million fees.

Meanwhile…also last night:

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Lawyer denies NAMA money went to politician (RTE)

Nama deal: Ian Coulter says no politician or their relatives were due to receive money from sale (BBC)

Previously: Project Eagle And The €3.5billion Haircut

‘What Did They Get The €5million For?’

Pic: BBC

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Indeed.

During Leader’s Questions on Tuesday, led by Richard Bruton, top, Mr Bruton insisted several times – in an exchange with Fianna Fáil leader Mícheál Martin – that there is a member of the Comptroller and Auditor General office ’embedded’ in NAMA.

Micheál Martin: “I am sure the Minister, Deputy Bruton, will agree at this stage there has been enormous concern about the sale of NAMA’s Northern Ireland loan book to Cerberus Capital Management. This was raised in the Dáil last week by Deputy Mick Wallace, who raised serious concerns and made serious allegations. We know BBC Northern Ireland has carried out an extensive investigation in a programme yet to be aired, but some of its people have already spoken about it. Many statements have been publicly made by key stakeholders involved, and various leading politicians have denied any involvement whatsoever. I am minded of the remarks made by the Minister, Deputy Michael Noonan, to the Joint Oireachtas Committee on Finance, Public Expenditure and Reform in April 2014. He asked the agency to conduct a review with a view to accelerating the sale of its loan book and bundling properties together. He stated: “I have asked [NAMA] if they have any suggestions on how we could work that and would it be possible to use it as a brake on the market.” By this, he was asking what would be the consequences at the end of 2015 of taking the residual NAMA book and doing what IBRC did to its residual book in selling it off in a six-month period. One might now argue that one of the consequences was the kind of deal done with Project Eagle, where the entire Northern Ireland property portfolio of NAMA was put into one bundle and sold at a loss of around €200 million to NAMA and a discount of approximately 72%. We now know that, essentially, £7 million ended up in an Isle of Man bank account. That is not contested. We know the money was in an account controlled by a former managing partner of Belfast law firm Tughans, which acted indirectly for Cerberus, the US investment firm that bought the loan book. We know Pimco, another large US firm, withdrew from a tender process for the same loan book, citing concerns about an unsolicited approach from a number of individuals.”

Ceann Comhairle: “A question, please.”

Martin: “It notified NAMA about the unsolicited attention and, as part of its due diligence process, pulled out because of concerns that it had. NAMA has confirmed that Pimco’s compliance staff discovered that its proposed fee arrangement with US law firm Brown Rudnick also included the payment of fees to Tughans and a former external member of NAMA’s Northern Ireland advisory committee. This is in the public domain and I am not naming any names. Tughans has now stated that a former partner diverted the professional fees into an account without the knowledge of other partners. Suffice it to say that this is very serious and profound stuff that goes to the very heart of whether a proper deal was done on behalf of the taxpayer. I acknowledge that we have had many different commissions of investigation established but, given the gravity of what has been alleged and what we already know publicly or NAMA has confirmed, a commission of investigation is urgently required to investigate this entire episode involving the sale of the Northern Ireland loan book to the company concerned. Has the Government made a decision to set up such a commission of investigation?”

Richard Bruton: “I thank the Deputy for his question. First, it is important to say that NAMA has a very clear public mandate to deliver best value and in that role it is very actively overseen by the Oireachtas. There is an embedded member of the Comptroller and Auditor General’s office working with NAMA, it conducts regular audits and representatives come to the Committee of Public Accounts on a quarterly basis with information. I understand NAMA representatives will be before the Committee of Public Accounts this Thursday, and there will be an opportunity for members of that important committee of the House to question those representatives on the way NAMA manages its affairs.”

“The issues raised and which are a cause of public concern regarding the destination of a fee are an entirely different matter. It is important to understand the way in which NAMA dealt with this. When it heard there was interest in the loan book, NAMA insisted there would be a competitive process and one of the companies involved, as the Deputy knows, was Pimco. It indicated that its compliance staff had uncovered a proposed fee arrangement and when this came to the attention of NAMA, it decided that if Pimco did not withdraw from the sale, NAMA could not permit it to remain in the sales process. On foot of that, Pimco withdrew from the sale. NAMA also sought assurances, I understand, in respect of the successful bidder in this project that there was no such arrangement in place. It received such assurances.”

“NAMA has discharged its business in a very thorough way. The issues raised by the Deputy in respect of the decisions made by the NAMA board on whether to sell loans individually or in a bundle are a legitimate matter for questioning at the Committee of Public Accounts. The representative of the Comptroller and Auditor General would have been across that decision at all stages and would have been involved with the auditing of the decision as it was made. This information on how the business was conducted is available to the Comptroller and Auditor General and it would be available to the Committee of Public Accounts. NAMA’s representatives will be before the committee on Thursday.”

Martin: “That is not a satisfactory answer in any shape or form. This is not about a routine appearance before the Committee of Public Accounts and it is not the subject of a routine audit. The timeline is very important. The fee arrangement mentioned by the Minister necessitated the withdrawal of Pimco was brought to the attention of NAMA by Pimco, by the way. No auditor or anybody else discovered that. Representatives of Pimco went to NAMA and indicated that its compliance personnel were very concerned about the unsolicited approaches, the nature of those approaches and the fee arrangements. Within a month, NAMA sold the package to another major investment company, Cerberus, apparently with a similar fee arrangement process in place and with the diversion of up to £7 million into an Isle of Man bank account.”

“It is glaringly obvious that this demands a very serious, independent and objective inquiry, with compellability, into the specifics of this issue. Very serious allegations have been made about what transpired and there are many unanswered questions. This is entirely unsatisfactory. This concerns the largest property sale ever on the island of Ireland, with 850 properties being bundled together and many intermediaries involved. A person was allegedly operating in a discrete office within the Tughans building and people who served on the Northern Ireland advisory committee of NAMA were involved with this issue. That is very serious and I do not buy the line that NAMA just accepted assurances, with that being the end of the matter. It is not the end of the matter. Just as with previous occasions, the Government has been slow to come to the mark on issues like this. I put it to the Minister that the Government must review its response to the issue and establish a commission of investigation to get to the truth.”

Bruton: “It is important to point out to the Deputy that the fee arrangement to which he refers did not involve NAMA in any way.”

Martin: “I did not say it did. Nobody is saying that.”

Bruton: “These fee arrangements were on the side of the buyer and not the seller of the loans. NAMA was not involved in any way and no payment was made by NAMA in any respect of these fees. That was not the case.”

Martin: “Do not look to answer questions that were not asked.”

Bruton: “The issue of how NAMA conducted its business is very clear. That has been overseen and supervised by the Committee of Public Accounts and the Comptroller and Auditor General has somebody embedded in NAMA. NAMA’s board is appointed by the Oireachtas to get best value and to have this level of Oireachtas oversight. We have a unique level of Oireachtas oversight with respect to this body and the opportunities are there for Members to raise issues at the Committee of Public Accounts, where they have the support of the Comptroller and Auditor General, an expert in forensic accounting advice who is the auditor to NAMA and who will have gone through these issues. Thursday’s meeting offers an opportunity to deal with the NAMA involvement. There are clearly other issues regarding fees paid on the other side of the trade and they are of public concern. I understand the Northern Ireland Assembly is investigating those, as is the Law Society, with respect to the solicitor involved. There are investigations of those matters under way.”

Hmmm.

Anyone?

Transcript via Oireachtas.ie

Earlier: ‘What Did They Get The €5m For?’

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From top: Nama chairman Frank Daly, Nama CEO and Independent TD Shane Ross in the Public Accounts Committee this morning

Nama executives went before the Public Accounts Committee this morning in light of the Northern Ireland portfolio/Project Eagle sale to Cerberus.

You’ll recall how, prior to Cerberus’ purchase, global asset management firm Pimco has claimed it was approached on an unsolicited basis by third parties with a proposal relating to the potential purchase of the Northern Ireland portfolio from Nama.

During the proceedings, Nama told the committee members that Pimco told it about a £15m fee arrangement with £5m earmarked for Frank Cushnahan, a former member of Nama’s Northern Ireland advisory committee.

From the proceedings:

Frank Daly: “I am very firm in my conviction that Mr [Frank] Cushnahan, or Mr [Brian] Rowntree indeed, did not glean any confidential information, or any useful insider information from being a member of that committee…”

Shane Ross: “What did they get €5million for?”

Daly: “I’m not going to speculate on that. But you could ask I mean, what were they paying him €5million for, you’d have to ask Pimco. You would have to ask elsewhere about that.”

Ross: “Kind of mind boggling though isn’t it that they’d go ask a guy to act for them and pay him an acquisition fee of €5million, if it’s just an ordinary Joe Soap off the street who didn’t know anything about the portfolio. He had an office as well?”

Daly: “I don’t disagree with your theory but all I can say to you is that from his work with Nama on the Northern Ireland advisory committee, he did not gain any inside knowledge of the portfolio. But remember, right, we’re talking about Northern Ireland and we’re talking about a relatively small business community where there is an awful lot of information out there about debtors, developers, properties, who’s in Nama, who’s not in Nama. It didn’t come from Nama. But it is there.”

Ross: “He had an office in Tughans, didn’t he, Mr Cushnahan?”

Daly: “Well he had, as I understand it, he had the use of an office in Tughans.”

Ross: “Did that worry you?”

Daly: “No it didn’t. If we knew then what we know now, a lot of things would worry us but at that time it didn’t worry us, no.”

Ross: “But you knew he had an office in Tughans at the time the bidding was going on?”

Daly: “At the time the bidding was going on?”

Ross: “Yeah.”

Daly: “Yes, he had the use of an office, that’s what Tughans have said.”

Ross: “Did that not set alarm bells ringing?”

Daly: “There was nothing at that stage, deputy, about any fee payment or any involvement, alleged involvement by Frank Cushnahan in this process. He was gone, he was gone from the Northern Ireland Advisory Committee in November 2013. We first heard, first heard, of any suggestion about his involvement with Pimco in March 2014. He was about 3, 4, 5 months gone.”

Ross: “That was during the bidding process though. The bidding process was under way when you heard about it.”

Daly: “Oh yes, that’s why we threw Pimco out, or sorry, got Pimco to withdraw.”

Ross: “But, and I’m not saying that you acted dishonourably, I’m just saying that that was just another factor that should have made you say this whole thing is flawed, This whole process is flawed. There is something wrong at every turn and there’s something suspicious going on and at that stage I would have thought that you might have been worried about the price you were getting at the end because there was so much going on in the undergrowth and in the background that you didn’t know about.
Let me just ask this question: there was millions sloshing around, there was 15million, one guy getting 5 million; there were all sorts of potential conflicts of interest happening here; there were political sensitivities and you ploughed ahead, ploughed ahead and said, ‘OK, we’ll take the Cerebrus bid’.”

Daly: “We didn’t plough ahead, we went ahead. After consideration, saying, ‘are we still getting  the best price that’s obtainable for this portfolio? Is there still competitive tension? There were still two bidders in there – seven of them had dropped out.
There wasn’t huge interest, by the way, in this portfolio, I must say, you know, and in the nine who came into the process, I think almost any company that would have had the scale to deal with this and the financial backing to actually deliver on it was invited in. Most of them backed out. This was not something that a whole lot of people were interested in.”

Brendan McDonagh: “And also to add to that, deputy, we were very clear at the start, we said to people, to Lazards don’t even think of bidding, or don’t even think of wasting your money bidding on this portfolio. We have a minimum reserve price of 1.3billion [Sterling] because we know the costs of due diligence that firms are going to send on it and we don’t want people wasting their money on a portfolio that they’re not going to pay up for so, at the start of the process in January, 1.3billion, at the need of the process, in April, we achieved 1.3billion sterling. So there was no question that we didn’t get the price that we valued the portfolio at.”

Meanwhile…

Follow the proceedings live here

Follow a live blog by Irish News on the proceedings here

Previously: Project Eagle And The €3.5Billion Haircut