Latest challenge hikes pressure on Nama to maintain trust
Published 07/07/2015 | 02:30
A rebuttable presumption is an assumption that is taken to be true unless someone proves it not to be - innocent until proven guilty and the like.
Such is the absence of public confidence, post-crisis, in our politicians, banks and property developers - amongst others - there is a rebuttable presumption that business and property deals are deserving of the deepest suspicion.
This is a grossly unfair assumption to make but one, given our not entirely irrational levels of cynicism, that can be difficult to rebut.
But that is precisely the challenge that faces Nama as it seeks to insulate the toxic loans agency from controversies surrounding the sale of its Northern Ireland loan book.
The epic €5.7bn portfolio, dubbed Project Eagle, was sold for €1.6bn last year and is Nama's single biggest sale to date.
Intriguingly, US investment giant Pimco, says that it was "one of a number of firms approached by third parties to gauge potential interest" in purchasing the Project Eagle portfolio. Pimco received one such "unsolicited" approach, but withdrew from the tender process after it raised its concerns about the role of the third parties to Nama.
Nama has confirmed that Pimco withdrew after its (Pimco's) compliance team discovered that its proposed fee arrangement with US law firm Brown Rudnick also included the payment of fees to Tughans - a Belfast law firm - and to a former external member of Nama's Northern Ireland Advisory Committee (Niac).
That external member was Frank Cushnahan, who stepped down from Niac in November 2013.
With Pimco gone, Nama sold the €5.7bn bundle of Project Eagle loans at a staggering 72pc discount to US investment fund Cerberus, who also engaged Brown Rudnick who, in turn, used the local legal services of - you've guessed it - Tughans.
Now it has emerged that almost €10m in "professional fees" were diverted to an offshore account in the Isle of Man by solicitor Ian Coulter.
Mr Coulter (stay with me) is a former managing partner of Tughans, where Mr Cushnahan had his own office. For its part, Cerebrus says it did not make any improper payments or pay any illegal fees in relation to the deal - Brown Rudnick were paying Tughans out of their fees. But, whatever its provenance, the enormous transfer to the Isle of Man account has been confirmed by Tughans, which says all the money has been retrieved and has referred matters to the Law Society, the ruling body for the North's solicitors.
The confirmation of the transfer came in response to claims made under Dáil privilege by Independent TD Mick Wallace that the fees were reportedly earmarked for a Northern Ireland politician or party.
BBC's 'Spotlight' programme says that it is believed the money was transferred to the Isle of Man to facilitate payments to non-lawyers: "fixers and influencers involved in putting the deal together."
So many questions arise including how Mr Coulter managed to "divert" such vast sums of money to an offshore account over which he had sole control without the knowledge of his partners.
Nama, which sought confirmation from Cerberus in advance of the deal that no fee was payable by it to any person connected with the agency, protests that the integrity of its sales processes should not be criticised just because the manner in which one set of loans was bought has come into question.
But it doesn't fully wash, especially at a time when the public is questioning the extent of the write-downs and nature of deals transacted by Nama and IBRC, the 'Special Liquidation' vehicle into which the former Anglo Irish Bank and Irish Nationwide Building Society were folded.
Nama and, to a lesser extent, IBRC - currently in private mediation talks with the Quinn family over its €2.4bn lawsuit against Anglo - were exceptional public policy responses to an unprecedented economic crisis.
But they enjoy levels of confidentiality worthy of elite secret societies - with all the attendant conspiracy theories to boot.
It was, of course, necessary that emergency measures were introduced to address the serious threat to the economy that gave birth to Nama.
But it is equally necessary that the public interest and public confidence in these exceptionally powerful institutions is seen and heard.
Nama has been afforded exceptional emergency powers on a scale not seen since the onset of the Troubles.
The public must be assured that there are robust procedures and protocols in place to prevent any conflicts of interest.
And while sensitive deals require a degree of confidentiality, all confidence will be lost if the public assumes those deals are not in their best interests.
It's up to Nama and IBRC to rebut the public's assumptions.
Otherwise, we'll be tied up in tribunals for years to come.