The charging of another former NAMA official with the leaking of confidential information has added to the already significant pressure on the agency’s chairman and chief executive and on finance minister, Michael Noonan, to concede an independent inquiry into its activities.
Paul Pugh (56), from Clontarf Road in Dublin, is charged with disclosing confidential information contrary to Section 7 of the 2009 National Assets Management Agency Act. Detective Garrett Lynch of the Garda Bureau of Fraud Investigation told the District Court that Pugh provided information about McCabe Builders (UK) Ltd to a named individual at Connaught and Whitehall Capital UK Ltd in June 2012.
John McCabe was one of Ireland’s top-rung developers until he crashed with debts of more than €230 million in loans and guarantees being taken over by NAMA. McCabe built the Abington development for the rich and famous in Malahide, in north Dublin. His wife Mary hit the headlines in February 2013 after a receiver was appointed over her €150,000, 8.5 carat ‘Brussels sprout’ sized diamond ring and other jewellery when she failed to discharge some €20m in judgments obtained by the agency.
NAMA claimed that Mary McCabe with an address at Rath Stud, Ashbourne, County Meath owes it the proceeds from the sale of a €20m property in Park Lane in 2012.
John McCabe previously featured as a member of the Maple 10, one of the ten customers of Anglo Irish Bank who purchased a 10% stake in the bank from Sean Quinn in 2008 in a desperate attempt to save the rapidly collapsing institution.
Paul Pugh is now accused of leaking information about McCabes’ distressed assets while he worked with NAMA. On the day of his arrest on Thursday 23rd June, Wexford TD, Mick Wallace told the Dáil that Pugh was “an individual who came onto our radar long before now”.
Pugh is currently listed as a director of Connaught and Whitehall Capital Ltd. (not the UK entity named above) with an address at Santry in north Dublin, along with Swiss-based Irish businessman, Michael Maye.
His arrest follows the conviction of another former NAMA employee, Enda Farrell, who recently received a two-year suspended sentence after pleading guilty to a number of similar offences of passing confidential information from NAMA to external interests.
While these incidents have been embarrassing for NAMA chairman Frank Daly and chief executive Brendan McDonagh they are in the halfpenny place compared to intensifying controversy over the 2014 sale of the agency’s Northern Ireland loan book, Project Eagle.
Only an extraordinary U-turn by Fianna Fáil saved the government, and Noonan in particular, from acute discomfort when a motion by Wallace calling for a Commission of Inquiry into the Project Eagle purchase and sale was defeated in the Dáil on 29th June last.
Only days earlier, Wallace had been personally assured by Micheál Martin, of his party’s support for the motion, not surprising since it was almost word for word identical to one unsuccessfully put by Fianna Fáil before the house last November.
Clearly, the unwritten or at least unpublished agreement between the two largest parties precludes supporting dangerous motions which might force Noonan to explain why he authorised NAMA to proceed with the €1.241 billion sale to US fund Cerberus despite information that the tender process had been compromised by “fee arrangements” involving key players connected to the agency in Northern Ireland.
In early 2014, Noonan was informed that another US fund, Pimco, had disclosed to NAMA that it had agreed to make payments totalling €15 million to a number of people who assisted it during the tender process including Frank Cushnahan a former member of the agency’s Northern Ireland Advisory Committee (NIAC).
It subsequently emerged that Stg£7m had been lodged in relation to the Cerberus deal by solicitor Ian Coulter then a partner of Belfast firm, Tughans, in an Isle of Man account. At least some of it was intended to go to a senior politician or party in Northern Ireland. Cushnahan was to receive some £5m from the deal. Cushnahan also operated out of the Tughans’ offices in Belfast city centre.
As reported in Village over recent months, this sensational revelation, first made by Wallace in the Dáil in June 2015, contributed to the decision of Peter Robinson to announce his resignation as first minister and leader of the DUP last Autumn. Gareth Robinson, son of the former DUP leader has also been implicated in the affair.
Sinn Féin leader Gerry Adams made a complaint to the New York state comptroller who called in Cerberus to answer questions about the claims of side-payments linked to the sale.
Since then Cushnahan and Ronnie Hanna, the former head of asset recovery at NAMA in Dublin, have been arrested and put on police bail after their arrest in Northern Ireland as part of the investigation by the British National Crime Agency into the purchase of Project Eagle. Investigations by the Securities and Exchange Commission of the US Department of Justice and the Law Society in Belfast are also underway. Hanna resigned from NAMA in late 2014, six months after the sale to Cerberus, and returned to Belfast where he was previously an executive with Ulster Bank.
The new Northern Ireland finance minister, Máirtín O’Muilleoir, has also provided fresh information to the Stormont finance committee about the role of one of his predecessors in the affair. Former DUP finance minister, Sammy Wilson, nominated Cushnahan for the NIAC job and, according to the latest information provided by O’Muilleoir, also proposed that former Anglo Irish Bank official, Neil Adair be appointed. At the time, Adair was registered as a shareholder of PBN Holdings, one of Nama’s largest debtors in Northern Ireland. Adair has claimed that he was unaware until late 2015 that he had been nominated for the role on the NAMA advisory committee.
During the debate on the Dáil motion in late June, Wallace repeated his claim that Hanna met senior Cerberus executives on the eve of the tender being awarded, in early 2014. Pimco had withdrawn over the fee-payments controversy and only US fund Fortress was left in the race with Cerberus. However, it had to write to the Department of the Taoiseach just to get into the race.
“Cerberus bid £1.241 billion. The reserve price was £1.24 billion. Fortress bid £1.1 billion. … It was not a competitive tendering process by any stretch of the imagination”, Wallace said.
He claims that Cerberus bid just above the reserve price of £1.24 billion for a portfolio of 850 properties that was probably worth €1.7 billion at 2014 prices. He disputed a claim by NAMA that Cushnahan had no access to confidential information about the bidding process and the quality and potential values of the properties on sale.
“If so, why after Frank Cushnahan resigned in 2013 did NAMA insist that all his confidential files at Tughans had been destroyed? Brian Rowntree who was also on the Northern Ireland Advisory Committee, contradicts NAMA on this stating that it was privy to confidential information. In his reply to NAMA Frank Cushnahan said, ‘I am returning herewith as requested the enclosed letter confirming that all documentation has been securely disposed of’. What in God’s name would he be disposing of if there was nothing to dispose of? Why was he entitled to £5 million if he had no confidential information? It does not stack up”.
The Wallace motion was supported by some 39 TDs including Sinn Féin, People before Profit/AAA and several left-wing independents. Fianna Fáil supported the government.
By Frank Connolly