Nama faces PAC probe as £7m lawyer stash revealed
Claims made in the Dail by TD Mick Wallace have piled pressure on Nama and prompted calls for a full inquiry into the agency, Ronald Quinlan and Maeve Sheehan report
Published 05/07/2015 | 02:30
The National Asset Management Agency is to be summoned before the Public Accounts Committee to explain what it knows about allegations dogging the sale of its €5.7bn par value Northern Ireland loan book - Project Eagle - for €1.6bn.
The independent TD Mick Wallace claimed in the Dail that a £7m fee to be paid to a law firm was discovered in an Isle of Man bank account where it was "reportedly earmarked" for a leading Northern Ireland politician.
The legal firm, Tughans, which was retained by a US law firm acting on behalf of the buyer, private equity giant Cerberus, confirmed on Friday that a former partner, later named as Ian Coulter, had diverted "professional fees" due to the firm to an account without the knowledge of his partners. The firm said it is not linked to any political party nor has it ever made any party political donations.
A spokesman for Nama told the Sunday Independent that it was not aware of the reasons for Ian Coulter's departure until last Thursday.
Last night, Mick Wallace indicated to the Sunday Independent that he knows the identity of the politician who it is alleged was to have benefited from the monies deposited by Mr Coulter in the Isle of Man.
He said yesterday: "I could have named the politician against whom the allegations are being made, but I haven't. He would have been presumed guilty if I had mentioned him.
"Let's have an investigation of all these matters. Rather than speculate on whether money changed hands or if deals were done or if the best prices were achieved, let's have an inquiry," he said.
While Nama is not directly implicated in the controversy over the "diverted" fees, and had no contractual relationship with Tughans, the agency is coming under pressure to explain what, if anything, it knew about the scandal.
Informed sources told the Sunday Independent that the departure of Ian Coulter in January had caused "alarm bells" in Nama circles in Northern Ireland, prompting inquiries to be made.
In response to questions from the Sunday Independent, a Nama spokesman said yesterday the agency had "made no such inquiries": "The agency was not aware of the reasons of Mr Coulter's departure until last Thursday's statement by them." Nama declined to make any comment on what steps, if any, it had taken to investigate the circumstances surrounding the matter and their potential wider implications for the Project Eagle sale.
Nama has come under increasing scrutiny over its write downs and business practices from TDs in the Dail while Fianna Fail has recently tabled a raft of parliamentary questions about Nama's Northern Ireland operations.
The discounted sale of Nama's Northern Ireland loan book is the agency's single biggest sale to date. John McGuinness, the chairman of the PAC, said he intends to contact Nama tomorrow with a request for it to disclose in detail what it knows of the affair.
"We will be seeking to have Nama before us immediately. Mick Wallace should also make available to the PAC what papers he has. This is an extraordinary and serious allegation," he said.
While Mr Wallace has been urged to go to gardai, he said that he wants an independent commission of inquiry: "Things haven't been done in a transparent way and not all people have always behaved well. I don't believe the best prices have always been achieved on loan portfolios," he told the Sunday Independent. Nama has consistently maintained that it seeks to achieve the best possible return for the taxpayer.
He said the Comptroller and Auditor General, which produces a report on Nama every three years, could "hardly be regarded" as being capable of the "close scrutiny" which he believes is required when it comes to Nama.
He said: "It's open to the Minister for Finance to initiate a separate investigation if there's an issue of public concern. That hasn't been done. Why? The Government needs to think about what it should do. Inaction isn't really an option."
Several opposition politicians have joined Wallace's call for an inquiry into Nama this weekend. Lucinda Creighton, the leader of Renua, said taxpayers were entitled to "full and immediate" public disclosure from Nama on the sale of its Northern portfolio.
"At a minimum, Nama must be brought before a public forum such as the Public Accounts Committee or the Oireachtas Committee on Finance and compelled, next Tuesday, under oath to provide a transparent account of this latest debacle."
Catherine Murphy, an Independent TD whose pursuit of the Siteserv sale by IBRC has led to an inquiry into the liquidated state bank, said Nama has questions to answer about the reported level of write-down of the Northern Ireland loan book.
"I'm not sure that Nama would have known about the (£7m) aspect of it, but what jumped out at me was extent of the discount," she said.
The former chairman of IBRC, Alan Dukes, said while he was reluctant to comment on whether the Government should initiate an inquiry into the controversy, he said Mr Wallace should take the Tanaiste Joan Burton's advice and go to the gardai: "If he has that kind of information, he should bring it to the gardai. They are the people who investigate these things."
The allegations have caused a storm in Northern Ireland, where an emergency sitting of the Northern Assembley's finance committee is to be convened. Political leaders on all sides have called for a full investigation.
Peter Robinson, the DUP First Minister, told the Irish News in Belfast that he could "unequivocally and without reservation confirm that I have not received nor was I ever to receive any proceeds from Cerebus, Tughans or anyone else in relation to the Nama sale".
In a statement on Friday, Nama said that in January 2014 it appointed Lazard, an international investment bank to advise and oversee Project Eagle, the sale of its €4.5bn loan book in Northern Ireland. Lazard invited nine major global investment groups to tender. Cerberus Capital Management, an American firm, emerged as the highest and preferred bidder for the portfolio in April 2014. The sale was completed two months later.
Nama said it got assurances from Cerebus before the sale, that it wasn't paying a fee to anyone connected with Nama and the sale process.
Cerebus also issued a statement expressing serious concern over the sale. A spokesman for Cerberus said: "We are deeply troubled by Mick Wallace's allegations and we want to make it clear that no improper or illegal fees were paid by us or on our behalf and we take any allegations to the contrary extremely seriously.
"We appointed Brown Rudnick as our lawyers. We were advised by them that they would be seeking local counsel support in Northern Ireland by Tughans and that they would be paying Tughans out of their fees. Cerberus has never paid Tughans."
Tughans also denied any wrongdoing. According to its statement, the former partner left the practice while the law firm Tughans voluntarily reported the matter to the Law Society of Northern Ireland.
One of two former members of Nama's Northern Ireland advisory committee told the Irish News Mick Wallace's allegations came as "an absolute shock". He said he was excluded from the sale of the Northern Ireland loan book.