Friday 30 September 2016

Billions at stake but Nama gets pestered by parish-pump politics

Wasting time and money, TDs have flooded Nama with questions, some of which are ridiculous, writes Ronald Quinlan

Published 06/09/2015 | 02:30

ATTENTION TO DETAIL: Despite being in charge of one of the biggest property loan portfolios in the world, Nama CEO Brendan McDonagh has had to respond to trivial queries from TDs
ATTENTION TO DETAIL: Despite being in charge of one of the biggest property loan portfolios in the world, Nama CEO Brendan McDonagh has had to respond to trivial queries from TDs

When Nama was established, almost overnight it was casually being referred to as the 'world's biggest property company'. Whether the description was accurate or not, it was understandable given the scale of its portfolio and the task it was being set by the then government.

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Having taken over €74bn in developers' loans from the balance sheets of Ireland's broken banks, Nama was told to recover as much of that money as it could on behalf of the taxpayers who had been forced to bail them out.

Clearly conscious of the difference the success or failure of the agency would make to the country's economic prospects, our politicians passed legislation affording it extraordinary powers to pursue the developers on its books, and to do so beneath a veil of secrecy so great that Taoiseach Enda Kenny dubbed it the "secret society" in the course of the 2011 general election campaign.

But while Mr Kenny and others claimed it lacked transparency, Nama's CEO Brendan McDonagh and chairman Frank Daly properly insisted Nama was required to operate in the same way as a bank. The developers they were dealing with may now have owed billions of euro to the State, but they were still entitled in the same way as any customer of a bank is, to confidentiality in relation to their financial affairs. Questions over Nama's sale of the loans and assets over which it had control were rebuffed customarily on the basis that the answers were commercially sensitive.

But with the politicians and the public still demanding answers, the agency set up a dedicated email address in 2011 for members of the Oireachtas to query Nama's operations and activities. Used correctly, the email facility had the potential to open Nama up to some serious scrutiny.

So just what kind of questions have our politicians been asking of the State's so-called 'bad bank' as it goes about the business of offloading billions of euro of loans securing property both here and abroad?

Documents released to the Sunday Independent in response to a Freedom of Information request for copies of the emails between members of the Oireachtas and Nama between 2011 and July 2015 paint a depressing picture. For far from showing an appreciation (and in some cases even a proper understanding) on the part of our TDs of Nama's activities and their significance, the records show the concerns are of the parish-pump politics variety as opposed to anything relating to the agency's overall strategy.

Indeed, some of the questions suggest a number of TDs are unaware of Nama's legal obligation to maintain confidentiality in relation to their borrowers' details, while others suggest that certain politicians are simply ignorant of the fact that the agency owns the loans securing the properties on its books as opposed to the properties themselves.

Interestingly, the vast majority of the correspondence from Oireachtas members released to the Sunday Independent came from within the ranks of Fine Gael and Labour. While there is no evidence that these politicians sought to use their membership of either Government party to influence Nama's decision making process, the fact that the bulk of the representations were made to them as opposed to members of the Opposition suggests that the people in their constituencies may have believed they had the wherewithal to do so.

What follows is but a small sample of the hundreds of issues raised by TDs on behalf of their constituents with Nama officials, up to and including Nama CEO Brendan McDonagh over the past four years.

Two of the more interesting contacts came from the office of Sinn Fein President Gerry Adams within weeks of Nama's establishment of the dedicated email address for Oireachtas members.

On September 22, 2011, Mr Adams' office wrote directly to Nama CEO Brendan McDonagh asking him to confirm if Nama was involved in managing properties owned by a named developer in Dublin 15. Mr Adams also wanted to know if Nama was considering proposals for a drive-through lorry fuel station, and if so when a decision was likely to be made.

While this correspondence may seem mundane, it suggests the Sinn Fein president - or at least his assistant - was unaware of the fact that Nama is precluded by law from discussing the affairs of the borrowers on its books.

In his response, Nama CEO Brendan McDonagh told Mr Adams as much, saying that he was "not in a position to disclose information on any arrangements that may be in place with individual debtors".

Despite that clear advice, the Sinn Fein president's office wrote to Nama again just five days later on September 27, 2011, asking if a named developer had his loans transferred over to Nama.

On this occasion, Nama's head of business services, Sean O'Faolain replied informing Mr Adams' assistant that under the Nama Act, "we are precluded from disclosing confidential information, including information relating to debtors".

Repeated efforts to elicit a comment on the matter from Mr Adams and Sinn Fein were unsuccessful.

But the Sinn Fein leader's office was not the only place where there appeared to be ignorance in relation to Nama's legal obligation to keep the affairs of its debtors confidential. Indeed, on February 21, 2012, the then Minister for Children (and current Minister for Justice) Frances Fitzgerald wrote to Nama CEO Brendan McDonagh asking him if a named company "are with Nama?"

While Mr McDonagh didn't confirm if the company in question was "with Nama", he did his best to assist Ms Fitzgerald in his reply. He said: "Dear Minister, I have been advised that the company has been instructed to negotiate with its creditors which may include the company you refer to."

Ms Fitzgerald put the Nama CEO in a somewhat awkward position again just three weeks later on March 13, 2012, when she wrote to the agency to make what she termed "representations" on behalf of a developer who was unsure if they were 'in Nama'.

She wrote: "I wish to make representations regarding (name redacted) and their status in Nama. Could Nama confirm whether (name redacted), developers of estates such as (name redacted) is in Nama? I understand that they had contact with Nama as recently as December. I would be grateful for any advice you can provide on this matter."

Clearly conscious of how Ms Fitzgerald's use of the word "representations", which is used as a matter of course by TDs and Senators when making inquiries in the Oireachtas on behalf of their constituents could be misinterpreted, Mr McDonagh replied, saying: "Dear Minister, We are precluded from disclosing such details. If you could elaborate on the context of your representations (e.g. a particular problem), we may be able to assist."

At the time of going to press Ms Fitzgerald, her department or spokesman had no comment to make.

Two months later, another Fine Gael minister, Lucinda Creighton, contacted Nama on behalf of a named developer seeking information on his behalf in relation to an offer which had been made for one of his properties some months earlier.

The email sent by the then Minister for European Affairs' assistant stated: the developer "has made contact with Lucinda regarding his property that is currently with AIB Nama, Hume House. Lucinda would like to request information on any progress that has been made in relation to [the] property. [The developer] was informed that there was an offer to buy the property in 2011 and would like to know if there has been any update on this."

This time round, Nama did not cite issues of confidentiality in relation to its dealings with the developers on its books. The agency's head of relationship management Martin Whelan replied: "Having made enquiries on your behalf, I understand that in the past week a new offer for the property has been submitted to the Bank by (bidder's name redacted). The Bank is, I understand evaluating this offer and will revert to (developer's name redacted) very shortly. I have asked to be kept advised of progress on this matter and will contact you once I know more. In the meantime, please feel free to contact me on this or any other matter in the future."

Commenting on the email from her office to Nama, Ms Creighton, who is now the leader of Renua, said this weekend: "I do not remember making this query. It would, however, have been standard practice for my staff to pursue queries on behalf of constituents when I was travelling on government business as Minister for European Affairs. This was particularly the case in 2012 when I was often travelling through five countries in a single week".

A more unusual query came in January 2013, from Kerry South TD Michael Healy Rae. He wrote directly to Nama CEO Brendan McDonagh on behalf of a constituent interested in running a caravan park facility that had been "taken over by Nama".

He wrote: "Dear Brendan, I hope you are well. First of all I want to take this opportunity to wish you every good luck and good health in 2013. Thank you for your help in the past and I would be very grateful if you could please advise me on the following issue on behalf of a constituent who is involved in the caravan park business.

"Berkeley He believes that (address redacted) in (location redacted) has been taken over by Nama? I do not know if this is correct or not and I would be grateful if you could let me know as this individual is interested in running the facility, or having the opportunity to do so, if such an opportunity arose. Looking forward to hearing from you."

Nama's Martin Whelan responded on Mr McDonagh's behalf, providing the Independent TD with the details for the receiver appointed to the caravan park. Mr Whelan advised Mr Healy Rae to have his constituent contact the receiver directly.

Contacted for comment, Mr Healy Rae said: "During the course of my work as a public representative I deal with hundreds of requests and queries everyday. Over the years some of these issues are in relation to what I would call Nama properties.

"I have sought advice and assistance on different occasions and there is absolutely nothing wrong with this. I am perfectly entitled to seek information on behalf of constituents and I have done this in the past and I will continue to do so in the future because not to do so would be failing in my duty of work as a public representative. I am sure that you or no one else with any type of a fair mind could have any problem with this".

March 6, 2014, saw the then Tanaiste Eamon Gilmore pass on what can only be considered to be an extraordinary request on behalf of a constituent.

In an email to Nama, Mr Gilmore said his constituent had contacted him to express their concern over the upcoming sale of land adjoining the Booterstown Nature Reserve, which Nama had sold previously in 2012 for some €400,000. The then Tanaiste said his constituent was now "wondering whether Nama would offer to purchase the site to resell to Dun Laoghaire Rathdown County Council and Dublin City Council for the public and environmental good".

Nama's Martin Whelan informed Mr Gilmore the site had been sold by a Nama-appointed receiver in 2012 following an "extensive open market campaign". Dublin City Council and Dun Laoghaire Rathdown County Council had been given the opportunity to match the highest bid at the time, but had declined to do so, he added.

He said Nama was "not in a position to buy lands on the open market from third parties in order to resell it to local authorities or other public bodies at a loss".

In the event, the lands in question were sold last September for a sum believed to be in the region of €1m to the family of Belfast-born property investor, Paddy McKillen.

Contacted in relation to his email, Mr Gilmore said: "After consulting with the constituent this matter was not taken any further with Nama."

Other queries reveal a lack of awareness on the part of our politicians when it comes to Nama, and the requirement for them to exercise absolute caution in relation to the manner in which they communicate with its officials.

One such example is the case of Fine Gael parliamentary party chairman, Dan Neville, and the emails he sent to Nama's Martin Whelan in August 2014 on behalf of a constituent who was looking to purchase lands in Limerick.

While Mr Neville asked in his first email how the constituent might go about setting up a meeting to discuss his proposal to acquire the lands in question, in a subsequent email he asked Mr Whelan to provide him with "updates" as he had been asked to "represent and assist in the negotiations". "Hope this is in order with yourself," Mr Neville said.

Mr Whelan responded, advising the Fine Gael TD to direct his constituent's query to the lands' sales agent, CBRE.

Asked for comment on his correspondence with Nama, Mr Neville said: "My contact was only to get a telephone number on behalf of a local sports club who were trying to follow up on something which had ended up going into Nama. I had nothing to do with it after that, and I don't even know what happened [in the end]."

But while Mr Neville and other TDs may have entirely legitimate explanations and reasons for their contacts with Nama on behalf of their constituents, Clare TD Pat Breen's email to Nama of October 21, 2011 speaks volumes both in relation to the kind of politicians we elect as a people, and what we expect them to do for us once they are in office.

"A constituent has contacted my office... looking for an address for Nama," he wrote.

Sunday Independent

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