Wednesday 22 November 2017

Richard Curran: If leaks are proven correct, it's a damning indictment of NAMA

We have all been critical of the lack of transparency at Nama since it was set up in 2009.

The state agency is handling so much of taxpayers’ money that the maximum level of openness and accountability is of paramount importance. However, the agency has consistently said that it is running a commercial operation and many of the facts or secrets that citizens would like to know, would hamper or jeopardise that commercial work.

It is a debate that has gone on for a few years. But that is why it is all the more serious that a raft of allegations have been made by a former official about  the agency handing over information to debtors, some people having friendships with developers and essentially leaking information.

If they are proven to be correct, they are a damning indictment of the organisation. However, they have to be tempered with a bit of context. If one person did these things, it would be bad, but hardly surprising.

There can be one bad apple in any organisation. However, the allegations that have been made and are currently under investigation by the Gardai, imply that it was not just one person involved in these kinds of transgressions.

There is a grey area about exactly who should know what in relation to Nama. For example, the agency does not disclose how much it paid for individual properties or loans from the banks. It is our money, but the agency has taken the view that on commercial grounds it would be better if that was not published. It may be right. That is debatable.

Should borrowers know how much the agency paid for their loans, when citizens cannot? The obvious answer is no. If they knew that figure they would be in a position to assess what constitutes a profit or a loss for Nama on their loans. This would be commercially very valuable information for a borrower to have.

But Nama has said that when it decides to work with debtors, as opposed to shutting them down and selling their assets, it divides the outstanding loan in two. It devises a business plan with the borrower where they set a target for how much he has to realistically pay back. The remainder, goes into a different account. He still technically owes the rest of the money but it is in a different category.

It is very difficult to imagine that Nama does not sit down and discuss, and disclose, these figures when it agrees a business plan with a debtor.

If a debtor knows how much the agency paid or his loans or assets, in theory anybody can know.

In a situation where a debtor wants to try and bring in somebody to buy back some assets, knowing the price the agency paid would be very valuable. In a situation where Nama just decides to sell the assets on the market, knowing what it paid would give someone a big head start.

If it were proven that a flow of commercially sensitive information was travelling from more than one rogue element within the agency to potential buyers of assets, Nama’s credibility would be sorely damaged.

No agency or organisation can fully insulate itself from the actions of a particular individual who might decide to break the rules. But more than one person, and it is a very serious issue.

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