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PB April-May 2025
April-May 2025 9
PIMCO offered o buy he pckge “off-
mrke” in brech of he NAMA policy o
hve open nd compeiive processes
NEWS
T
he report of the Commission of
Investigation into the sale of
Project Eagle by the National
Assets Management Agency
(NAMA) to US fund Cerberus in
June 2014 oers a rare insight into the
internal operations and governance of the
State ‘bad bank’. NAMA, charged with
disposing of distressed banking assets
after the financial crisis, claims to have
been vindicated by the finding that there
was no basis to conclude “that anything
other than the best achievable price was
obtained by NAMA for the Project Eagle
portfolio”.
However, this finding should be heavily
qualified due to the detail in the report by
the Commission’s sole member, solicitor
Susan Gilvarry, about the circumstances
that led to the sale of the assets and the
subsequent controversy which forced the
government to establish the inquiry in the
first place, three years later. The Commission
was established following investigations by
the Comptroller & Auditor General and by
the Public Accounts Committee in Dublin
and the Finance Committee of the Assembly
in Belfast. It was first chaired by former High
Court judge, John Cooke, who was appointed
in 2017 but he was replaced by Ms Gilvarry
after his death in April, 2022. She completed
her work on the 480-page document,
following twenty interim reports, in October,
2024.
At least some of the delay, and the
qualifications that must surround its
findings, were due to the reluctance of some
key potential witnesses to co-operate with
the Commission. A number of people cited
ongoing criminal proceedings in the North
related to the sale as the reason for their
refusal to engage.
The investigation has confirmed much of
what is already known about the sale by
NAMA of its entire portfolio of distressed
loans in the North for £1.32 billion (€1.59
billion) to Cerberus, but it reveals new and
significant information about the internal
confusion that characterised what is
described as an “acutely politically
sensitive” transaction. The report explains
how the US fund, Pacific Investment
Management Company LLC (PIMCO) entered
the scene with an oer to purchase the
portfolio in early 2013 on condition that it
would be a cash-only “discrete o market
basis” sale meaning that it would be the
only bidder. This was in breach of the NAMA
policy to have open and competitive
processes in its disposal of the €31.8 billion
publicly owned assets under its control.
The Northern Ireland Advisory Committee
(NIAC) of NAMA was established in 2010,
ostensibly in order to satisfy the political
sensitivities of business and political
leaders in the North that there would not be
a fire sale of the distressed loans of the
main Irish banks. It included Frank
Cushnahan, a prominent business figure,
chairman of the Belfast Harbour
Commissioners and an advisor to senior
DUP members including then First Minister,
Peter Robinson.
In June 2013, the Minister for Finance,
Eagle Commission lnds
o criicise NAMA’s Dly
Project Egle Commission
hmpered by ongoing criminl
proceedings ino Couler nd
Cushnhn in Norh s hey,
long wih Brown Rudnick
soliciors, Peer Robinson nd
Smmy Wilson, refused o
co-opere; nd i refused o
consider wrien submissions
from John Miskelly
By Frnk Connolly
Report criicises Frnk Dly for no lering NAMA’s Bord o he full
exen of Cushnhn’s disclosure of ineres (which ws lso mde
o SIPO) in dvnce of his re-ppoinmen o he NIAC in 2014
10 April-May 2025
April-May 2025 11
After frnic phone
conversions, PIMCO
greed o wihdrw
“grcefully” from he
process over wh ws
rnsprenly conflic
of ineres involving
Cushnhn, who ws
member of NAMA
commiee bu hd mde
pproprie disclosures,
geing finder’s fee
Michael Noonan, received a request from
the North’s then finance minister, Sammy
Wilson, to consider an oer from PIMCO
made through London solicitor’s firm,
Brown Rudnick, including the ‘o market’
dimension to the sale.
Discussions took place within the NIAC
and the board of NAMA, both of which
agreed to pursue the discussions with
PIMCO which was given exclusive access in
late 2013 to a data room containing financial
and other sensitive details of the portfolio.
The process was named Project Eagle by
NAMA’s Head of Asset Recovery (AR),
Ronnie Hanna, a former executive with
Ulster Bank in Belfast, who was familiar
with many of the debtors in the North whose
loans had been moved to NAMA following
the crash. Hanna, his colleague and deputy
head of AR, John Collison and CEO, Brendan
McDonagh, were the key decision-makers
working with a small ‘Deal Team’ of asset
managers. Frank Daly, as chairman of NAMA
and of the NIAC was central to ensuring the
required flow of information to the board
and to senior government figures in Belfast
and Dublin.
In January 2014, the board agreed to
appoint Lazard, London-based financial
advisers, to assist with the sale and to invite
other potential bidders in order to comply
with NAMA’s open-sales policy, and to
create more competitive tension in the
disposal process.
The report recalls how Daly informed the
board during these deliberations that it was
important not to unduly delay the sale due
to political sensitivities and argued that a
“single disposal strategy” made sense in
this respect. This contrasted with the
existing NAMA policy of a “gradual disposal
of NI assets over time”. Hanna concurred
with this approach and warned that,
otherwise, it might unravel due to the unco-
operative nature of some of the key debtors
in the North.
According to the report, he indicated that
“there was an entire behavioural pattern of
non-cooperation with the Northern Ireland
debtors”. Internal tensions also arose when
a minimum sale price of £1.2 billion was
proposed from within the AR team before
McDonagh overruled the suggestion and
insisted that this be raised to £1.3 billion.
The Gilvarry report concluded that no
independent valuation of the portfolio had
been obtained, a factor which may have
contributed to the apparent confusion over
the minimum sale price in late 2013.
Daly meanwhile suggested that the
process was taking up an inordinate amount
of time and resources for what, he said, was
4% of the Agency’s portfolio of assets. In
fact, it was 9.85% of the entire NAMA
portfolio, with 56 borrower connections for
933 property assets and a par debt value of
£4.6 billion. Just five of these connections
were responsible for 80% of the total £1.39
billion distressed loans which involved
hotels, shopping centres and other
commercial properties across the North and
in the UK.
In early 2014, other global funds including
Apollo, Blackstone, Starwood Capital,
Oaktree, Lone Star and Cerberus were
brought into play by Lazard. Following a
leak to the Irish Times in early February
2014 that PIMCO had approached NAMA to
buy its portfolio in the North, Goldman
Sachs and Fortress joined the fray.
Within weeks, panic ensued when PIMCO
informed Ronnie Hanna and others in NAMA
in early March that it had agreed with Brown
Rudnick (BR) that a success fee of £15
million would be paid if it acquired the
Project Eagle portfolio. The monies were to
be divided equally between Brown Rudnick,
John Coulter of Tughans solicitors in Belfast
(who were clients of BR) and Frank
Cushnahan. The NAMA board and Michael
Noonan were informed. Following three
days of frantic phone conversations, PIMCO
agreed to withdraw “gracefully” from the
process over what was transparently a
conflict of interest involving Cushnahan,
who had resigned from the NIAC in
November 2013.
The report describes how Cushnahan had
made disclosures of his commercial
involvement with a number of the main
NAMA debtors in the North but that this
information had not properly percolated
through the organisation. It criticised Frank
Daly for “not informing the board of the full
extent of Frank Cushnahan’s disclosures
when the proposed success fee came to
light”. Cushnahan, who had also made the
required disclosures of interest to the
Standard in Public Office Commission,
represented clients who controlled over
50% of the value of the entire Project Eagle
portfolio.
The NAMA board decided that for
reputational and other reasons it would
proceed with the sale of Project Eagle, with
bidding completed on 1 April 2014, just
weeks after PIMCO withdrew from the
process. The Cerberus bid of £1.322 was
accepted. Notwithstanding its involvement
in negotiating the controversial success fee,
Tuvi Keinan on behalf of Brown Rudnick also
advised Cerberus on the purchase following
the abrupt departure of PIMCO.
Alarmingly, NAMA did not learn about this
engagement by Cerberus of Brown Rudnick,
until after the sale was completed.
The Commission also found serious
failings with the recording of minutes of
NAMA board meetings.
Before the sale, NAMA had insisted to
Cerberus that there should be no fees paid
to any former or current board or advisory
group member of NAMA. Following the sale,
it emerged that some £1.5 million had been
lodged in the Isle of Man by John Coulter of
Tughans, leading to a reported dispute
within the Belfast law firm and contributing
to criminal charges against the solicitor. The
report recalls a meeting of the NIAC, which
took place at Tughans in Belfast, where
Cushnahan also had an oce.
The report also disclosed a previous
incident where Cushnahan had sought a fee
from NAMA following discussions between
its ocials, including Hanna, and a debtor
entity in the North for whom he was
providing advice. It found that Hanna was
present at a meeting involving the debtor
and should have reported this at the time to
his superiors Daly or McDonagh. However,
it also concluded that his presence at the
meeting was “not inappropriate”.
The relationship between Cushnahan and
Hanna before and during the sale of Project
Eagle is of course the elephant in the room
and was the cause of much speculation
after the sensational Dáil revelations by
former TD Mick Wallace in July 2015. Wallace
exposed the existence of the £15 million fee
arrangements between PIMCO and Brown
Rudnick, Coulter and Cushnahan that led to
the sudden withdrawal of the US fund just
weeks before the controversial disposal
was completed. He also alleged, under
privilege, that a portion of up to £7 million
was to go to “a leading politician” in the
North. Wallace referred to the sum of £1.5
million which was lodged in the Isle of Man
10 April-May 2025
April-May 2025 11
in connection with the Project Eagle sale.
Neither Coulter or Cushnahan, who are
awaiting trial in Belfast later this year,
co-operated with the Commission of
Investigation citing the criminal charges by
the UK National Crime Agency (NCA) as their
reason.
Ronnie Hanna initially declined to
co-operate with the Commission with his
solicitors advising in December 2017: “You
will appreciate the reasons why my client is
constrained from attending before the
Commission and giving oral evidence as he
remains a suspect in a criminal investigation
being carried out by the NCA”.
Mr Hanna was re-approached once he
was no longer facing charges and, according
to the report, he agreed to assist.
Other witnesses who could have assisted
the Commission in relation to the context of
the proposed fee payments declined to give
evidence including Brown Rudnick which
said that it did not wish to co-operate due
to the criminal proceedings against Coulter
and Cushnahan. The North’s former finance
minister, Sammy Wilson, also declined to
reply to an invitation to meet with the
commission while Peter Robinson also
refused to attend. County Down
businessman and NAMA debtor, John
Miskelly, who had retained Cushnahan as a
consultant, could not attend in person due
to serious health issues. Other prominent
developers and NAMA debtors in the North
also declined to engage with the
Commission.
The Commission decided to ignore written
submissions from Miskelly because he
could not deliver his testimony directly. This
despite the existence of tapes, aired by the
BBC in 2016 during which Cushnahan
makes significant statements, including in
relation to Ronnie Hanna. Miskelly is also
facing charges in the North relating to his
payments to Cushnahan which were
recorded in the tapes made by the
businessman and provided to the BBC for
broadcast. On the tapes, Cushnahan is
recorded as stating that Coulter had placed
£6 million into an account from which he
(Cushnahan) was to benefit for his work on
the NAMA sale to Cerberus. In another,
earlier, taped conversation, Cushnahan
name-checks Ronnie Hanna as he tells
Miskelly that he will help to get him out of
NAMA or at least to exit with some of his
wealth and assets intact. “Don’t worry, I’ll
work with Ronnie. See, the great thing is, we
have Ronnie”, Cushnahan said on tape.
Others who escaped censure by the
Commission include former finance
minister, Michael Noonan, who had
controversially met with the chairman of
Cerberus and former US Treasury Secretary,
John Snow, on the day before the deadline
for bidding expired. Noonan was criticised
by the PAC in its report into the Project Eagle
debacle which described his attendance at
the meeting as “procedurally inappropriate”.
Senior Department officials told the
Commission that the pending sale was not
discussed with Snow at the meeting while
Noonan said that he had been advised to
steer clear of any mention of commercial
arrangements at the meeting.
According to the report, “Mr Noonan did
not consider that the meeting was in any
way a sales pitch for Project Eagle but rather
a courtesy meeting and an opportunity to
meet with the former Secretary to the US
Treasury, John Snow. Mr Noonan explained
that Secretary Snow wanted to meet the
Finance Minister and if such a meeting was
refused, he would feel rebued. ‘If the
Finance Minister refuses to meet him, he
would wonder why and he could feel
rebued, you know. He wants to do business
in Ireland’, Mr Noonan said”.
At the latter stages of the competition,
the condition of a cash only sale was
dropped and potential buyers were
permitted to discuss commercially sensitive
details of the portfolio with potential
financial backers. Cerberus raised over
£729 million from the Nomura Bank of Japan
to finance the acquisition and the bank was
presumably briefed on the details of the
sale in advance. Indeed, Nomura Bank had
been in discussions with Cushnahan as far
back as 2011 and 2012 after he was
introduced to the Japanese firm by his
former friend and Thailand based
businessman, Barry Lloyd.
Former Secretary General of the
Department of Finance, John Moran, was not
among the Department ocials involved
directly in the sale of Project Eagle and was
not mentioned in the Commission of
Investigation report. Fifteen months after
his departure from the Department in the
summer of 2014, Moran went on to provide
consultancy services to Nomura and other
corporate clients. Last year he won the
election to become Mayor of Limerick.
The Commission did raise the question as
to why NAMA did not contact Cushnahan for
his version of events in March 2014 when
PIMCO was forced to withdraw but was
informed by NAMA that it was not aware that
he had been promised a success fee before
he resigned from the NIAC in November
2014. NAMA said that the information that
the success fee had been negotiated by
Cushnahan in 2013 only emerged when
Peter Robinson gave evidence about it to
the Stormont finance committee in late
2015.
The report concluded: “The Commission
finds that there was no statutory or
regulatory obligation on the part of NAMA
to ask for an explanation. However, in
circumstances where the proposed success
fee was a very serious development with
reputational risk attached to NAMA, Mr
Cushnahan and PIMCO should have been
asked for an explanation. In making this
finding, the Commission acknowledges that
Mr Cushnahan and PIMCO could not be
compelled to provide an explanation and no
sanction could have been applied. It also
acknowledges the relentless pace of the
process and the fact that the correct
decision was to proceed with the sale”.
It criticised chairman, Frank Daly, for not
alerting the Board to the full extent of
Cushnahan’s disclosure of interest in
advance of his re-appointment to the NIAC
in February 2014.
Frank Connolly is the author of NAMA-Land
(Gill Books, 2017)
The repor criicises NAMA
chirmn Frnk Dly for
“no informing he bord
of he full exen of Frnk
Cushnhn’s disclosures
when he proposed
success fee cme o
ligh”’
Susn Gilvrry, chir of Commission of
Investigtion: PIMCO nd Cushnhn
should hve been sked for n
explntion of his success fee, by Nm
