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Ireland's political and cultural magazine
1 0 June 2017
N
OW THAT the long-awaited Commis-
sion of Investigation into the sale of
Project Eagle has been conceded it
remains to be seen which players will
actually be on the pitch when the
inquiry is finally convened. As predicted by Vil-
lage several months ago, there was no chance
that Enda Kenny or Michael Noonan would still
be in power by the time any inquiry into the con
-
troversial deal came around. Indeed it might be
considered a success on their part that the deci
-
sion to hold an inquiry was delayed until they
had a foot out the door of government.
The flip-flopping by Fianna Fáil on the issue
also contributed to the government’s foot-drag-
ging and it was only the resounding criticism of
NAMA’s handling of the €1.24bn sale of its
Northern Ireland loan portfolio by the Commit-
tee of Public Accounts (PAC) that made a judicial
inquiry inevitable.
Former High Court judge, John Cooke, will
have his hands full when it comes to ensuring
that the investigation does not run well past its
current deadline of late 2018 to deliver its report
given the number of modules that have been
demanded by various parties and independents
who contributed to recent Dáil debates on the
subject. While the Fine Gael members are deter-
mined to restrict the inquiry to the Project Eagle
disposal by NAMA to Cerberus, which the Comp-
troller and Auditor General (C&AG) criticised for
leaving the public purse short some €220m,
opposition parties including Sinn Féin and inde-
pendents, most notably Mick Wallace, want a
much more wide-ranging investigation.
The PAC, which spent weeks last year
interrogating the C&AG’s ‘value for money’ analy-
sis, had much narrower terms of reference than
those now demanded given the extent of the rev-
elations that have emerged in the North about
some of those who were seeking to make huge
sums of money from the Project Eagle sale. A
number of BBC Spotlight programmes, in particu-
lar, shone a light on the activities of Frank
Cushnahan, the former member of the Northern
Ireland Advisory Committee (NIAC) of NAMA, who
was recorded accepting bundles of cash totalling
€40,000 in car park of a Belfast hospital in 2012
from developer, John Miskelly, one of the agen
-
cy’s debtors to whom he was offering consultancy
advice.
Cushnahan was recorded telling Miskelly
during a secretly taped meeting, how he was
“thick as thieves” with Ronnie Hanna, the then
Head of Asset Recovery at NAMA, whom, he said,
was doing his best to help developers in the
North salvage their distressed loans. Among a
range of other matters, these tapes were outside
the remit of the CAG and the PAC but their con-
tents will surely be examined by the Commission
when it finally convenes.
However, as Wallace has argued during the
first debate on the terms of reference last month,
there are also the matter of leaks of allegedly
confidential information from NAMA, the con-
flicts of interest involving not just Cushnahan but
former employees at the agency and the sale of
other large bundles of public assets to global
funds which have come under question.
The latest of these to come to light is the sale
of Project Shift, a portfolio containing loans
associated with supermarkets in Germany which
was disposed of to Cerberus by NAMA as part
of the larger Project Eagle loan book in 2014.
Wallace alleged last month that Cerberus was
involved in discussions to purchase Project Shift
for £76m before the entire Northern Ireland loan
book was put up for sale and that it knew the
price which NAMA was seeking for it. When it
was later included in the Project Eagle portfolio
sale, it had a competitive advantage over the
underbidder, Fortress, as it could factor in the
German retail assets in its tender.
The Wexford TD also claimed that another
former NIAC member, Brian Rowntree, had con-
firmed that the advisory committee had not
discussed the sale of Project Shift:
“Fortress was bidding on Project Eagle with
-
out the knowledge that a minimum of €76 m
would be taken off the price of the portfolio. Is
this not a form of insider trading? Cerberus had
Judge John Cooke’s remit is usefully wide as
there is much that has not been investigated by
PAC; though key potential witnesses may not co-
operate, and Michael Noonan is now gone
by Frank Connolly
NEWS
Cookeing up a
NAMA investigation
Among a range of other
matters, the tapes of
Cushnahan telling Miskelly
how he was “thick as thieves”
were outside the remit of the
CAG and the PAC but their
contents will be examined
by the Commission when it
finally convenes
June 2017 1 1
non-public knowledge that the price for Project
Eagle would be lower”, Wallace told the Dáil in
late May.
“Fortress did not have this knowledge. Why
did NAMA not write to all bidders who signed
non-disclosure agreements at the start of Pro-
ject Eagle and inform them that a debtor was
sale agreed for €76m and that it may be removed
from the price? I have written to the Committee
of Public Accounts today to ask them to examine
all aspects of Project Shift”.
NAMA confirmed that Cerberus had agreed
with the agency to convert Project Shift into a
loan sale after it selected the US fund in April
2014 as its preferred bidder for Project Eagle.
The Commission of Investigation will also be
hampered, as was the PAC, by the difficulty in
getting key figures to co-operate with its inquiry
or to appear at public session as Cushnahan,
Hanna, Belfast solicitor, Ian Coulter and others
have previously cited the fact that they are pre
-
vented from public comment about their role in
the Project Eagle purchase due to the ongoing
criminal investigation by the National Crime
Agency in the North. Other investigations by the
FBI and the Securities and Exchange Commis-
sion (SEC) of the Department of Justice in the US
will, no doubt, be a reason for other potential
witnesses from that side of the Atlantic declining
to give evidence to the commission.
On 1 June NAMA chairman, Frank Daly, told RTÉ
that the agency was ready to provide any infor-
mation required by the Commission but insisted
that it would not be changing its criticism of both
the C&AG and PAC findings. Accusing the C&AG
of failing to have the required financial expertise
to examine the Project Eagle sale, Daly rejected
its finding that NAMA lost €220m on the deal. He
also denied that it had ignored evident conflicts
of interest involving Frank Cushnahan, who had
declared as far back as 2012 that he was advis
-
ing six debtors who made up more than 50% of
NAMA’s entire Northern Ireland loan book.
Daly also countered those who were critical of
the agency for selling off assets too quickly and
in excessively large bundles, to vulture funds.
He said that without adopting that strategy the
agency would not be in its current position where
only €500m of senior debt remained from the
original €32bn it paid for loans transferred from
the main Irish banks in 2009 and 2010.
Asked whether more than €18bn more could
have been obtained from the massive sale of Irish
property assets, as suggested by property devel-
oper, David Daly, if it had been done more slowly,
the NAMA chairman said that its strategy was the
correct one when it came to bringing down the
country’s debt mountain. He said that he had
rejected the approach of developers who offered
to repay their debts over a five or ten year period
based on their own business plans.
“You don’t repay it by sitting on your hands
and doing nothing and trusting that those who
got us into this mess would get us out of it”, Daly
told RTÉ’s Sean O’Rourke.
He also rejected a claim by house-builder
David Daly that NAMA had contributed to the
housing emergency by calling in performing as
well as bad loans from developers which effec
-
tively closed down his business as well as that
of many others.
Frank Daly also said that NAMA would return
a surplus of €3bn when it closed its doors in
2020 although he accepted that it would be dif-
ficult to offload the remaining €4 bn in distressed
loans still on the books of the agency.
It is now almost two years since Wallace told
the Dáil of the £7m placed in an Isle of Man
account for the benefit of a small circle of busi-
ness people and politicians in the North in
connection with the Project Eagle sale. The delay
in establishing a Commission of Investigation
into Project Eagle because of the procrastination
of the Government and Michael Noonan, in par-
ticular, will ensure that NAMA will be well on the
road to dissolution by the time its findings are
published.
It also emerged in early June that the agency
had chosen Mazars to audit its books and con
-
firmed that the C&AG would no longer act as its
only auditors. It justified this on the grounds that
the State’s accountant can only audit ‘not-for-
profit entities’. The C&AG has not accepted this
explanation arguing that it was never intended
for NAMA to make a profit.
There are also the matter
of leaks of allegedly
confidential information
from NAMA, the conflicts
of interest involving not
just Cushnahan but former
employees at the agency
and the sale of other large
bundles of public assets,
including Project Shift, to
global funds
NAMA chairman Frank Daly (left) and CEO Brendan McDonagh (right), with solicitous
communications friend
