— June – July 2013
N
AMAWINELAKE.IE’ website is no
longer open for new wine. “Concrete
has now been poured into the web-
site”, its final entry reads, though
existing posts will subsist. This is a great geek-
ish disappointment to those who have followed
the fortunes of the country as it seeks to recover
from the financial heart-attack it suffered in
following many years of reckless gambling
and over-consumption.
Those prepared to draw sustenance from ‘the
winelake’ were offered important insights into a
grandiose world, the world of the well connected,
the movers to whom the rules apply almost on
a grace-and-favour basis. The site came into
being three-and-a-half years ago, as the coun-
try embarked on one of the most extraordinary
experiments in world economic history follow-
ing the crash.
Ireland first took part in an initial ‘boiled frog’
experiment from around as the economy
slowly began to overheat on the back of a lend-
ing bubble that seemed to occur underground
like one of those Icelandic volcanoes. By the time
the lava was apparent to those who troubled to
look, it was already too late. Had it existed, the
‘winelake’ might have staunched the scorching
flow. Instead, when it cooled, it collected it. As
wine. Somehow.
After the crash, the Government derived the
idea for NAMA, the National Asset Management
Agency. Wexford-based economist, Peter Bacon,
is credited with coming up with the idea. It
remains to be seen whether a statue will be
erected in his honour when NAMA eventually
is wound up.
Loans – with a book value of €bn – were
acquired for €bn by the state through the new
agency in what amounts to a huge gamble on the
long-term future of the Irish property market.
Those in favour of the concept argue that the
alternative would have been an even more disor-
derly collapse in the Irish property market and a
total wipeout of bank depositors, but supporters
of the free market maintain that a wiping clean of
the slate would have allowed for a more natural
rapid recovery in the economy as investors were
attracted in droves by rock bottom prices.
Namawinelake came into being soon after
NAMA’s formation at the end of . It soon
was performing a vital watchdog function. If
initially the focus was on the operations of
the agency itself, that focus was soon widened,
extending in particular to the activities of the
soon-to-be-nationalised banking sector.
But the website also began to monitor the
activities of the businesspeople who owed large
amounts to the financial institutions. It began to
target the attempts of officialdom to duck ques-
tions about the manner in which organisations
such as NAMA and the IBRC, the merged INBS
and Anglo, were dealing with debtors.
Increasingly, the ‘winelake’ adopted the style
of the cheeky chappy columnist, sugaring the
diet with juicy titbits about the lifestyles of some
of the people, mainly men, with whom NAMA
and the IRBC had dealings.
But the site managed to stick close to its core
aims, one of which was to hold the powerful to
account.
Questions continued to be raised about exer-
cises in debt forgiveness, some of which were
politics
kyran fitzgerald
The winelake has
evaporated
The erudite, scrupulous, good-natured and occasionally humorous NAMA-
scrutinising blog disappeared before its anonymous author could be traced,
or tire
“
It expressed “shock” at
the fact that NAMA had
made a prot of just €132m
on €2.7bn in sales up to
September 30, 2011, of
what were supposed to be
some of the better-quality
(predominantly UK) assets
on its books
NAMA wasn’t so chummy
generous indeed, the burden for which must be
borne ultimately by the taxpayer.
Namawinelake was not without the occa-
sional blemish itself. Its reference, last November,
to the ‘suicide’ of leading publican and prop-
erty investor, Hugh O Regan was without doubt,
uncalled for. It was the sort of error that expe-
rienced journalists simply do not – or should
not – commit. It was a rare, but serious, lapse
of judgement of a personal nature.
This writer has not been blameless in this
regard, when it comes to discussing people’s
personal difficulties, it should be added.
Questions have been raised about a leaning
towards Sinn Féin and to its Finance spokesman,
Pearse Doherty. One online critic counted
posts dealing with questions raised in the Dáil
by Doherty, compared with just posts cover-
ing questions raised by his well regarded-Fianna
Fáil counterpart, Michael McGrath.
The disparity may simply be reflective of the
fact that Sinn Féin’s young team cottoned on
more quickly to the significance of the website
and were feeding cleverly off the blog posts.
Eyebrows did arch at a Namawinelake blog
heading of March , : “Sinn Féin splits
NAMA wide open with trenchant questions”.
The blog, that day, raised some very interesting
questions about NAMA, nevertheless. In partic-
ular, it expressed “shock” at the fact that NAMA
had made a profit of just €m on €.bn in
sales up to September , , of what were
supposed to be some of the better-quality (pre-
dominantly UK) assets on its books. And it
had this to say about NAMA’s relations with its
‘developer-clients’:
“We learn that although NAMA is prevented
from selling property to defaulting develop-
ers, NAMA is allowed to sell property to its
Qualified Investment Funds which can then sell
the property to anyone, including defaulting
developers”.
It also noted that ‘overheads’ to the tune of
€m had been approved for developers.
If nothing else, the ‘winelake’ served to
highlight the strange ‘carrot and stick’ relation-
ship between the agency and its ‘clients’ which
is based, at least to some degree, on mutual
dependence.
NAMA itself is populated by a mix of hard
working bureaucrats (Chairman Frank Daly and
CEO, Brendan McDonagh) and property experts,
most of whom played a not insignificant role in
the years culminating in the popping of one of
the world’ s largest ever property bubbles. This
incongruity has only added to the fascination
with NAMA which the ‘winelake’ tapped into so
effectively.
Over the past three years, some developers
have drawn closer to its bosom while others have
been thrust out of the garden of Eden straight
into the stony world of receivership and in many
cases, bankruptcy.
Bystanders have been left to wonder on what
basis some individuals have continued to retain
the trust of the Agency, being paid fat salaries
for their cooperation into the bargain while oth-
ers have been cast out. What happened between
NAMA and Johnny Ronan/Richard is a source
of great curiosity.
The blog has also noted the lack of specific
debt-reduction targets for NAMA and criticised
it for a lack of specific provision for legal costs
incurred in the course of the court challenge
mounted by businessman Paddy McKillen.
McKillen would emerge as one of the stars
of the blog series, over the period from
to , prompting some in the media – alter-
natively – to wonder whether he was providing
some support to the ‘winelake’ project.
Certainly, the agendas of the website and Mr
McKillen appeared at one when he brought his
clarifying challenge to NAMA’s attempt to gain
control over his loans all the way to the Supreme
Court, where he succeeded in two of four grounds
of appeal against an earlier High Court decision.
The website’s coverage of the drawn-out High
court proceedings was lively and informative.
McKillen was, for ‘winelake’ the hero of the
hour. His challenge helped to clarify much about
NAMA and he was soon back at the centre of
attention when he fought the Barclay brothers
in the English High Court for control of a group
of top London hotels. The twins had secured the
backing of property investor, Derek Quinlan,
holder of a key chunk of the Maybourne hotel
group, which owns the hotels.
More recently, however, the ‘winelake’ has
rapped McKillen on the knuckles, casting fur-
ther doubt on paternity. It has highlighted the
Ulsterman’s social side and his ownership of a
-acre development near Aix-en-Provence
called ‘Xanadu’ complete with sculptures by REM
frontman, Michael Stipe.
Another businessman the ‘winelake’ paid
great attention too was Denis O’ Brien. One can
never accuse our richest indigenous Irish busi-
nessman of being boring and he has been the
source of much copy for the ‘winelake.’
In April , the ‘winelake’ had a look at
Digicel, the global communications company
which is the basis for O’ Brien’s current fortune. It
examined the Transparency International
rankings linking the findings with the Digicel
operations in the Caribbean and Pacific regions.
It pointed to Haiti’s ranking at number out
of countries in the league table and lists five
other countries including Guyana in th place
, and Honduras, with ranking below one hundred.
Jamaica, a major area of Digicel activity, comes
in at th place.
More recently, Digicel has been actively
scouting in Burma which is opening up to over-
seas investment. Burma ranked near the bottom
in Transparency International’s league
table. Of course, this may imply nothing more
than that Digicel is forging ahead into virgin ter-
ritory, rather like a business setting up stall in the
th century America’s Wild West.
“
Although NAMA is
prevented from selling
property to defaulting
developers, NAMA is
allowed to sell property to
its Qualied Investment
Funds which can then sell
the property to anyone,
including defaulting
developers
NAMA’d
PHOTO: EOGHAN BARRY
— June – July 2013
Last November, in proof it is not owned by
O’Brien, the ‘winelake’ posed the question: why
is Denis O’Brien not in NAMA? – referring to his
large property-related loans. In a bit of mischief-
making, it went on to suggest: “If Denis’s loans
were acquired by Nama, then Denis would poten-
tially face restrictions on his lifestyle. NAMA
famously imposes a €, cap on salaries
to its developers. It does not look kindly on pri-
vate aviation, and NAMA also bans charitable
donations and sports sponsorship”.
Earlier, in August , the ‘wine-
lake’ praised the ‘brave defiance’ of Sunday
Independent editor, Anne Harris – Harris had
just published an interview with the former
Chairman of Independent News and Media
(INM), James Osborne, who had made the alle-
gation that O’Brien had rung him to get an article
withdrawn from the following day’s Sunday
independent (this allegation has been denied
by spokespersons for O’Brien).
More recently, and of more relevance to
NAMA-watchers, the ‘winelake’ questioned the
loan write-downs agreed with INM, estimat-
ing the writedowns at €m plus interest. As
the loans were handed out by AIB and Bank of
Ireland it pointed out that taxpayers were heav-
ily on the hook.
In practice, such write-downs are now sadly
the norm as far as much of corporate Ireland – at
least, that part most exposed to the downturn –
are concerned. It is argued that the obvious
alternative to a write-down, a complete collapse
of the group, might leave the taxpayer even more
on the hook.
The ‘winelake’ itself acknowledged that INM
had managed to produce an operating profit on
its core business of €m and an after-tax profit
of €m, something it regarded as impressive
in the circumstances.
In July , the elusive blogger took the
Broadcasting Authority of Ireland to task for its
conclusion that O Brien “does not control INM.
It recommended that members of the BAI be
called before the Joint Oireachtas Committee
on Transport and Communications to explain
themselves”.
‘Winelake’s real strength was in commen-
tary and analysis rather than in straightforward
muck-raking, suggesting that its key commen-
tator or commentators were close to the action
without necessarily having the Sam Spade qual-
ities of classic muck-raking journalism in the
mould of Private Eye or Le Canard Enchainé.
The End
The denouement unfolded quickly, and with
a sudden twist in the tail, late last month. The
‘winelake’ did at least experience the pleasure of
incorporeally witnessing the sudden liquidation
of IBRC, a company which had become a particu-
lar target, earlier this year.
The website questioned both the salary levels
of IRBC executives and some of the deals reached
by the company with individual borrowers. It
turned out that they were not alone – down in
Merrion Street, concern that the IRBC had devel-
oped a mind of its own seems to have grown.
It also had time to level a parting shot at
Michael Somers, the former boss of the National
Treasury Management Agency over an Irish
Times interview he gave in which he lamented
the way the IFSC was losing out due
to heavy regulation. Somers also
complained about the pay-cap in
banking which, he claimed, had
resulted in the loss to the sector of
skilled people.
The ‘winelake’ showed restraint,
confining itself to pointing out that
“alas, Somers did not provide detail
on the regulations which IFSC banks
found unpalatable”. Perhaps the author(s) had
grown weary of the daily grind or perhaps they
had information that they were on the verge of
exposure. In the words of Voltaire, “it is danger-
ous to be right in matters where established men
are wrong”.
And so the blog delivered its valediction.
“After three-and-a-half years and , blog-
posts, there are thousands of hours of original
research on these pages”. The blogger confessed
to being depressed at how little was actually
reported in its pages on the goings on inside
Nama. Frustration was expressed at the legis-
latively-mandated failure by NAMA to provide
details of individual sales. The blogger added
that NAMA clearly welcomed the resulting lack
of scrutiny as otherwise it would be “bogged
down in the minutiae of constantly defending
itself”.
It warned of the scale of the possible black
hole should deflated current property values
persist: “Most cynics say that NAMA is taking
advantage of the convention to hide massive
losses, but you can’t conclusively say that”.
“The estimate on here is that property under-
lying Nama’s loans have dropped
by more than €bn since NAMA
acquired the loans, but that NAMA
has written off less than half that
because accounting conventions
allow NAMA to estimate the future
cash flow from loans and pay lim-
ited attention to the underlying
property”.
“Will NAMA make a profit by
? Who knows? None of us has a crystal
ball”.
And there follows what almost came across
as praise for the people the Lake has harried for
so long. “NAMA staff are criticised for many
things... being petty, intimidating, vindictive
... their service is criticised for being slow, not
being commercial enough, dogmatic. These
are points of view, of course. But what appears
to be universally agreed – even by detractors
– is that they are hard-working, honest, accom-
plished and making progress in what is one of
the most high-profile and politically-charged
organisations in a country that invented the term
‘gombeen politics’”.
Perhaps then the authors worked for NAMA
themselves ...
politics
Why is Denis
O’Brien not
in NAMA?
“
