NAMA has had many high-profile staff departures, but few are as likely to end up being the catalyst for a public inquiry into allegations of kickbacks and corruption at the agency as that of its former Head of Asset Recovery, Ronnie Hanna. Hanna, who spent almost 30 years working in Belfast for Ulster Bank before he joined NAMA in 2010, is alleged to have been a member of a ‘cabal’ of Belfast businessmen who sought payments related to the sale of Project Eagle, the largest tranche of debts in Northern Ireland.
Hanna left the agency in October 2014, six months to the week after NAMA sold the distressed commercial and residential property portfolio, previously valued at £4.5 billion, to US fund Cerberus for £1.241bn in April last year. At the time, NAMA executives complained in public that it was finding it difficult to hold on to staff due to the cap on their salaries. It is unclear what role Hanna has taken up, or plans to take up, following his unexpected departure from NAMA.
Thanks to independent TD Mick Wallace, Hanna is now at the centre of allegations that he was directly involved in meetings between multi-billion dollar US investment funds with Frank Cushnahan, a former member of the agency’s Northern Ireland Advisory Committee (NIAC) and/or Belfast accountant, David Watters.
It was sensationally claimed at the Stormont finance committee in September that property consultant Cushnahan, Watters, the former partner in Tughans solicitors, John Coulter and developer Andrew Creighton along with DUP leader, Peter Robinson were to receive substantial sums from the Project Eagle deal. All have denied the claims.
It is also known that Cushnahan and Coulter, along with US law firm Brown Rudnick were to take £15 million in fee payments between them from investment fund, PIMCO, if its bid for the property portfolio was successful. PIMCO withdrew from the process after its compliance officers advised that the fee payments were possibly illicit under US law. It informed NAMA of the payments which in turn told, finance minister, Michael Noonan, in March 2014.
Wallace told the Dáil in late November that the key NAMA insider who brokered the deal, Ronnie Hanna, met with “at least one of the US investment funds” with whom Cushnahan and Watters had been in negotiations. He accused NAMA of an untruth in denying to him that Hanna had met a US fund along with either Cushnahan or Watters. He also claimed that Hanna “deliberately interfered with the process”.
Watters is a managing partner of Belfast accountancy firm RSM McClure Watters, which was on one of Nama’s advisory panels for its debt recovery operations. Hanna and Coulter also have business connections through their involvement in the Confederation of British Industry in Northern Ireland.
Documentation from the various inquiries into the scandal that has since emerged includes a letter written by Watters himself confirming that he came up with a proposal to sell all of Nama’s northern-linked loans in a single package. He has claimed he is owed substantial fees.
NAMA has vigorously denied that Hanna had any meetings with any of the US bidders with Cushnahan or Watters although as a senior banker in Belfast for three decades involved in credit, risk and restructuring sources claim it is inconceivable that he and the pair of city professionals were not well acquainted.
In a statement after the Wexford TD made his claims to the Dáil on Thursday 26th November, a spokesperson for NAMA described them as “disingenuous” and “a deliberate misinterpretation” of its earlier correspondence with the TD.
He said: “In a letter dated 28th October, 2015, Deputy Wallace asked NAMA: Did Ronnie Hanna, along with Frank Cushnahan or David Watters, ever meet with any investment fund personnel? NAMA’s response was: No, Mr Hanna had no such meetings with these individuals. He never met them with the two people named in Deputy Wallace’s question.”
Wallace’s claim that NAMA’s own head of recovery was in discussions with a US fund with either Watters or Cushnahan as bids for Project Eagle were being prepared will test claims by NAMA and the government that the agency was not implicated in any of the irregularities now associated with the Project Eagle sale or purchase. NAMA has insisted that that only the purchase and not the sale of the Eagle portfolio is under investigation.
The agency has not responded to a question as to whether it asked Hanna, Cushnahan, a former member of its NIAC, or any of the US funds bidding for Project Eagle whether they met Hanna with either Cushnahan or Watters.
However, in mid-November a week before Wallace made his claim in the Dail, NAMA wrote to Cushnahan to ask about meetings he had with PIMCO about which, the letter suggested, the agency was not informed.
If one of its most senior executives was in the same room alongside the men who are now the subject, along with Brown Rudnick and Coulter of at least three international inquiries, by the Northern Ireland executive’s finance committee, the UK’s National Crime Agency and the US Securities and Exchange Commission it will deal a death blow to claims by the government that the matter should not be the subject of an independent commission of investigation in Dublin.
In late September Tánaiste, Joan Burton said that the Project Eagle controversy and inquiries were “a Northern matter”. However if Hanna is implicated in any impropriety as alleged by Wallace it would bring any scandal home to the heart of NAMA as he was central to its operations in Dublin.
Among the allegations already uncovered and which Wallace first raised in the Dáil in July were the diversion by Coulter of £7 m into an Isle of Man account that was to be passed on to a Northern politician and that millions more were intended as “fixers”.
By now the basic facts of the Project Eagle deal are well known. The portfolio of distressed commercial and residential assets was sold to Cerberus for £1.241 bn (€1.5 bn) last year. The naming of former NAMA executive, Ronnie Hanna, in the Dáil has now added significant fuel to the already simmering embers of this protracted affair.
Fine Gael, in particular, would not appreciate the scrutiny that any independent investigation, as called for by Wallace, would surely place on finance minister, Michael Noonan, as well as on the chairman and chief executive of NAMA respectively, Frank Daly and Brendan McDonagh.
The Project Eagle controversy has already been mooted as a factor in the Autumn speculation, fed by senior Fine Gael sources, including Enda Kenny and Noonan, of a November election. As finance minister, Noonan had been in correspondence about the sale with former NI finance minister, Sammy Wilson, as far back as June 2013 and three months later had even declared that PIMCO was likely to win the bidding for the loan book.
PIMCO withdrew from the process in early March 2014 after its compliance officers raised questions over the “fee arrangements” of £15 million to be shared among its US lawyers Brown Rudnick, Tughans and Cushnahan. Cushnahan worked out of the Tughans’ offices in Belfast as a property adviser and served on NIAC from April 2010 until November 2013.
In his letter last month from NAMA, Daly asked Cushnahan to explain a meeting he held with PIMCO along with Coulter and Robinson in May 2013 while he was a member of NIAC and why he did not disclose this and other matters as he was obliged to do under the NAMA Act and ethics legislation.
NAMA has also asked Cushnahan to provide details of any other meetings with PIMCO or “other parties” in relation to the possible sale of the Northern Ireland loans portfolio.
PIMCO confirmed in July last that Cushnahan and Coulter had made an unsolicited approach to the US fund during 2013 and asked them to consider entering the sales process for Project Eagle. This formally began with the appointment by NAMA of international investment bank, Lazard, in early January 2014 to oversee the process. Nine global investment groups including PIMCO and Cerberus were invited to participate.
At a Public Accounts Committee hearing in July, Frank Daly confirmed to Sinn Fein’s Mary Lou McDonald that he had informed finance minister, Michael Noonan, of the £15 million fee arrangement attached to the PIMCO bid on 13th March 2014. Instead of halting the entire process, as he is legally empowered to do under the legislation underpinning NAMA, pending an investigation, Noonan agreed to let it continue following the exclusion of PIMCO.
When the irregularities apparently involved aspects of Cerberus’ successful bid Noonan had an opportunity to prevent, or at least delay, the acquisition by the US fund of another massive NAMA property portfolio while the inquiries into Project Eagle were ongoing. Instead, the sale to Cerberus for a reported €800m of Project Arrow, a substantial portfolio of properties mainly in the Republic once valued at €6.3 billion, was completed by NAMA in November.
In October, it was reported that Cerberus had acquired some €2 million in debt which Wallace owed to Ulster Bank and was seeking its immediate repayment through the courts.
The debt arose from a personal guarantee for a loan acquired by the politician for the Taverna Di Bacco restaurant in Dublin’s Italian quarter in 2009. Cerberus purchased Project Aran, a large portfolio of distressed assets sold by Ulster Bank, in late 2014 through a subsidiary company, Promontoria. Sources close to Cerberus told Village that his debt problems may have influenced Wallace’s hostility towards the US fund. Wallace insists that his statements in the Dáil from his first intervention in July last when he mentioned the £7 million offshore monies intended for a prominent politician are solely motivated by his political role as a defender of the public interest.
Already facing a jail term arising from his protest with Clare Daly at Shannon airport last year, Wallace is facing further financial ruin in the High Court from the Promontoria action but has refused to rein in his criticism over the manner in which massive quantities of publicly owned property assets are being disposed of by NAMA to a small number of wealthy, mainly US based, investment funds.
His latest comments over the alleged role of Ronnie Hanna provoked a heated and hostile response from NAMA after Wallace aired his concerns in Leinster House on 26th November. His comments contained detailed allegations concerning a number of those he claimed were involved in the Project Eagle sales process.
By Frank Connolly.