Noonan, on and on - Village Magazine

1 4 April 2017

HE RELUCTANT concession by ﬁnance

minister, Michael Noonan, that a Com

mission of Investigation into the sale

of Project Eagle, as its Northern Ire-

land portfolio was known, by NAMA to

US fund, Cerberus in April 2014, will proceed fol-

lows a few torrid weeks for the politician and

executives of the agency.

On 29 March, Noonan came into a Dáil debate

on the report of the Public Accounts Committee

into the sale with all guns blazing, only to leave

early under a salvo of ﬁre from the opposition

benches. Noonan, as expected, defended NAMA

from both the Comptroller and Auditor General’s

assessment that the Project Eagle sale may have

cost the public over €200m and from the PAC

report which described it as a “flawed

process”.

Noonan also rounded on PAC chairman, Sean

Fleming, for the ﬁnding in its report that he, as

Finance Minister, had acted in a “procedurally

inappropriate” manner when he met with execu-

tives of Cerberus, including former US Treasury

Secretary John Snow, on the day before the sales

process completed in March 2014, and for failing

to inform the committee of this engagement.

Noonan replied that if the PAC had bothered

to look they would have found that details of the

meeting with Cerberus had been posted on the

Department of Finance website and included in

an answer to Fleming’s Fianna Fáil colleague,

Michael McGrath, in 2015.

Fleming was not having any of it and revealed

that Noonan had threatened to injunct the PAC

for its ﬁnding against Noonan during a heated

exchange in the Dáil restaurant some weeks ago

in what the committee chairman said was a

veiled threat to block publication of the report.

Supporting the PAC, McGrath added that “the

sale of Project Eagle was marked by inadequate

record-keeping, weaknesses in the management

of conﬂicts of interest, a seriously deﬁcient sales

process and, ultimately, an inability by NAMA to

demonstrate it had obtained the best value for

money for the State”.

Noonan had managed to unite his critics when

SF TDs Mary Lou MacDonald and Pearse Doherty;

independent, Mick Wallace; and Social Demo

crat, Catherine Murphy; all slated the minister

for using Dáil time to make an ill-considered

attack on the PAC and an unconvincing defence

of his own actions in meeting the lead tender for

the expected £1.3 billion purchase a day before

bids closed.

McDonald reminded him that anybody who

was uneasy about Project Eagle “would be even

more uneasy having sat through the hours of evi-

dence and if they were to read our report”.

She said that the idea of a northern debtor-

based strategy for NAMA originated with “a man

called Ian Coulter of Tughans solicitors in Bel-

fast, another man named Frank Cushnahan who

had been appointed to the Northern Ireland advi-

sory committee of NAMA, a NAMA insider, and a

third person called Tuvi Keinan of Brown Rud-

nick, a ﬁrm in London”.

Former NI ﬁnance minister, Sammy Wilson of

the DUP, wrote to Noonan in June 2013 to pro

mote the idea of a single sale of the NI portfolio

to US fund PIMCO but the fund was forced to

withdraw when it emerged that it had agreed to

pay ﬁnders’ fees totalling £15m to Tughans,

Brown Rudnick and Cushnahan.

When Noonan was alerted to these inappropri-

ate fee payments by NAMA he could have

stopped the process but instead allowed it to

continue and met Cerberus whose bid of £1.24

billion was then accepted a few weeks later.

Mick Wallace revealed further disturbing

details of meetings involving Noonan and his

As NAMA battles to defend the prices it

obtained in property sales generally, the

Department of the Taoiseach will convene a

Commission of Investigation into Project Eagle

by Frank Connolly

NEWS

Noonan,

on and on

A damning report in the

Sunday Business Post

claimed that the strategy

of disposals adopted by

NAMA had cost the Irish

exchequer up to €18 billion

in lost revenue

April 2017 1 5

Noonan, 1982

then Secretary General at the Department of Finance,

John Moran, with other US funds picking on the carcass

of the distressed debt of Irish people, leading to calls for

a wider-ranging Commission of Investigation to embrace

more than merely the Project Eagle transaction.

Noonan had earlier questioned the value of any such

investigation when he asked:

“What would the commission investigate? Where

could the commission add value beyond the work already

done by the Comptroller and Auditor General and Com-

mittee of Public Accounts? What could a commission

achieve in light of ongoing criminal and other investiga-

tions, and the fact that many potential witnesses and

evidence are located outside the jurisdiction? How much

might such a commission cost, and would the results of

such a commission justify the use of scarce budgetary

resources?”. He then went on to attack everyone and

anyone who questioned his motives or indeed those of

NAMA.

He also made a reference to a damning report pub-

lished only days earlier in the Sunday Business Post,

written by economist Jim Power and commissioned by

developer and house-builder, David Daly, which claimed

that the strategy of disposals adopted by NAMA had cost

the Irish exchequer up to €18 billion in lost revenue.

Power and Daly argued that if it had managed the assets

more carefully and wound them down over a longer

period the recovery in property values would have facili-

tated a bigger return to the agency.

Instead, Daly claimed, NAMA attempted to wipe out

good and bad developers alike, did a ﬁre-sale of its best

assets and contributed to the current housing crisis by

preventing developers such as himself from delivering

much-needed homes over the past eight years.

NAMA responded by attacking the accuracy of the ﬁg

ures compiled by Power who examined eleven particular

transactions involving vulture funds which bought large

portfolios of distressed assets in the early years of

NAMA and ﬂipped them within a short number of

months, making an average return of 47% on their

investment. The agency attacked Lisney for co-operating

with the analysis and report, forcing the auctioneer’s

ﬁrm to issue a damaging retraction of its work before

standing over it again some days later. Two of the eleven

transactions were wrongly recorded as NAMA deals but

the evidence compiled in the report was otherwise

sound, Power insisted.

NAMA claimed that it sold assets in large volumes for

less than it might have obtained some years later as it

needed to get the property market going again and was

under pressure from the EU/ECB/IMF Troika to do so.

Daly insists that it prevented recovery of the property

market and that this is evidenced by the current short

age of houses across the country, a rental and

homelessness crisis and that the Troika had no powers

to issue such demands, a point that has been conceded

by NAMA executives at Oireachtas committee hearings

over the past number of years.

On 4 April, Noonan was forced again to conﬁrm that a

Commission of Investigation will proceed, that its terms

of reference have to be agreed by party leaders across

the house and that it should be convened, in an unspeci-

ﬁed timeframe, by the Department of the Taoiseach

given that his Department will be an important witness

to the inquiry.

What is the betting on whether Noonan or Enda Kenny

will be heading their respective departments by the time

a commission is established?

NAMA claimed that it sold assets in large volumes

for less than it might have obtained some years

later as it needed to get the property market going

again and was under pressure from the EU/ECB/

IMF Troika to do so - though the Troika had no

powers to issue such demands