NAMA will beat legal challenges -- Lenihan
Tuesday May 19 2009
FINANCE Minister Brian Lenihan yesterday promised to see off any courtroom moves to hamper the work of the new toxic assets agency.
The National Asset Management Agency (NAMA) will be sturdy enough to withstand legal challenges, Mr Lenihan pledged.
NAMA is intended to wipe clean the balance sheets of the country's main banks by taking on their bad loans, which could mean a €90bn exposure for taxpayers.
Legislation to underpin NAMA would be "robust and sturdy" so that it would be able to "resist legal challenge", he insisted.
But the opposition yesterday accused Mr Lenihan of ignoring warnings by one of his own top advisers.
Dr Michael Sommers, the head of the National Treasury Management Agency (NTMA), told a Dail committee last week that he didn't know how NAMA would work. The treasury chief also expressed doubts over staffing and resources, and predicted that the agency and its work could be bogged down by courtroom challenge. There was the prospect of a "bonanza" for lawyers, Dr Sommers said.
Labour party spokeswoman on finance Joan Burton said it appeared the Government was "intent on ignoring the warnings". She said NAMA was "ill-fated" and threatened to place a financial millstone around future generations of Irish taxpayers.
Dismiss
"It's incredible that the Minister for Finance could so casually dismiss the very serious reservations expressed at the PAC last week by one of Ireland's most distinguished public servants," she said. "Six weeks after the minister first announced plans for NAMA, we have not yet seen any legislation to establish it, and the public is no clearer as to how it will work."
Fine Gael leader Enda Kenny said Dr Sommers's remarks at the Dail Public Accounts Committee meant the proposal was now "holed beneath the waterline".
But Mr Lenihan said Dr Sommers had been closely involved in the government decision to set up the agency, and was agreed that NAMA was "the only way to go". Mr Lenihan admitted that the NTMA chief had highlighted the enormous practical difficulties involved in establishing NAMA.
"It's not a decision that can be implemented overnight, he said. "We can't have a lawyers' bonanza. That's another reason why we have to get this right."
Mr Lenihan also said a lot of the NAMA work could be outsourced, and there was a possibility that the large banks could nurse along their own smaller loans.
- Senan Molony Deputy Political Editor
