Business

Monday 26 September 2016

Why it's too late now to decide it's time to deal with Nama's 'secret society'

Published 15/09/2016 | 02:30

Mick Wallace Picture: Tom Burke
Mick Wallace Picture: Tom Burke

It was February 2011 and the final televised leaders' debate of the general election when our then Taoiseach-in- waiting Enda Kenny vowed to open Nama up to new levels of transparency and accountability. Displaying all the bravado, bluff and bluster of a politician on the brink of power, he referred to Nama as a "secret society", and one which he intended to deal with once he was in office.

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In the five years since, however, Mr Kenny, Finance Minister Michael Noonan and their colleagues in two successive Cabinets have failed both individually and collectively to do anything to penetrate, let alone remove, the shield of secrecy provided to Nama on foot of the emergency legislation that established it at the height of the financial crisis in 2009.

If it hadn't been for the dogged pursuit by Independent TD Mick Wallace of claims of wrongdoing in relation to Nama's sale of its €5.6bn Project Eagle loan book, and the subsequent decision by the BBC's 'Spotlight' team to focus its attentions on the alleged misdeeds of Nama's Northern Ireland adviser Frank Cushnahan, it's arguable that the agency's 'move along, nothing to see here' attitude would still be intact today.

Read More: €223m 'lost by Nama' in Project Eagle sale

Yesterday saw the publication of the Comptroller & Auditor General's report, and the Government's belated and reluctant acceptance that "all matters of concern" with regard to Nama's functions should be fully addressed.

But beforehand, Nama had been allowed to conduct its business unimpeded by anything approaching robust questioning of the manner in which it has gone about recovering the billions of euro owed to the taxpayer.

At the outset, Nama's chairman Frank Daly and its chief Brendan McDonagh vowed repeatedly to recover the full €74.1bn par value of the development and associated loans it had taken off the balance sheets of Ireland's broken banks.

Somehow over time, Messrs Daly and McDonagh revised that target downwards until it settled at the derisory €31.8bn Nama had paid Anglo, AIB, Bank of Ireland and the other Irish banks whose loans it had taken over. More recently, they've begun to boast of how Nama will deliver a profit by recovering more than the €31.8bn it paid for its loan book - somehow conveniently forgetting the €40bn shortfall the taxpayer will be left to make up.

And they have been allowed to do so in the absence of any proper questioning from our politicians - or from the vast majority of the media, many of whom seemed to derive far more satisfaction from producing stories with the able assistance of well-placed sources detailing Nama's dogged pursuit of developers.

Read More: Seven things you need to know about the C&AG report on NAMA

Nama set off with seeming abandon in selling off what effectively were Ireland's crown jewels - London assets such as Battersea Power Station, the Knightsbridge Estate, and a major stake in the world famous Claridge's, Berkeley and Connaught hotels - for knockdown prices to vulture funds and other international investors.

Meanwhile, the Irish public's views on Nama were largely being fed a tabloid narrative depicting Frank Daly and his cohorts as modern day versions of Eliott Ness and his 'untouchables' while property developers were cast as low-rent hoods.

For every question involving the sale of developers' loans or the assets securing them, tabled by TDs at Nama's appearances before Dáil committees, the agency's stock response invariably included references to "commercial sensitivity".

Questions relating to the integrity of Nama's procedures or that of its several hundred personnel, meanwhile, were routinely rebuffed and dismissed almost as if they were beneath contempt.

Even as clear evidence emerged of the criminal behaviour engaged in by former Nama official Enda Farrell, through his leaking of confidential information relating to the financial affairs of Nama's borrowers to third parties, the agency's chiefs persisted with their insistence that, save for that one exception, all was well with its operations.

Following Farrell's guilty plea in Dublin Circuit Criminal Court last May to eight counts of unlawfully disclosing Nama information, another former Nama official Paul Pugh was brought before Dublin District Court on June 23 last. He was charged with the unlawful disclosure of confidential information in breach of the 2009 Nama Act.

Read More: Analysis: 'Bad bank' tackles man, ball and all in rebuttal of report's findings

Notwithstanding a finding of proven criminality in the case of one former Nama official and allegations of criminality on the part of at least one more former official, those in the media or in politics who have dared to question or criticise Nama's conduct or its modus operandi have, at times, been accused publicly by Mr Daly and Mr McDonagh of effectively peddling the agendas of aggrieved developers or others whom it believes hold a grievance against it.

And all throughout this, Mr Daly and Mr McDonagh, and Nama as a whole, have been vigorously supported by the Government, with Mr Noonan frequently volunteering as their mudguard against all criticism or questioning.

With the publication of the Comptroller & Auditor General's special report, however, and its finding that Nama lost €220m on the sale of Project Eagle after it departed from its normal loan sale process, Nama chiefs could soon find the political support they have always been able to take for granted is now in short supply.

As investigations by the UK's National Crime Agency and the SEC in the United States into Project Eagle continue, the prospect of an official investigation here could be the straw that finally breaks Nama's back.

Irish Independent

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