Wednesday 23 May 2018

Donohoe backs both Nama and C&AG amid row over Project Eagle

Paschal Donohoe Picture: Collins
Paschal Donohoe Picture: Collins
Cormac McQuinn

Cormac McQuinn

Public Expenditure Minister Paschal Donohoe has said he has confidence in Nama and the Comptroller and Auditor General (C&AG), despite the agencies being at loggerheads over the investigation into Project Eagle.

Mr Donohoe said the Government accepted the C&AG report that criticises the sale of Nama's northern loan book, but insisted he had confidence in both organisations as the Government announced that there would be an inquiry into the transaction.

Fianna Fáil, meanwhile, said the inquiry should include an examination of the "political backdrop" to Nama's sales strategy.

Independent TD Mick Wallace, who has been vocal in raising concerns over Project Eagle, said the proceeds of the sale should be frozen and all Nama activities suspended until the conclusion of "a truly independent commission of investigation".

Sinn Féin's Mary Lou McDonald described the C&AG's report as "damning" and claimed that Fine Gael had sought to "frustrate and delay any inquiry".

Mr Donohoe said the Government was awaiting the publication of the C&AG report before announcing an inquiry into Project Eagle.

The C&AG's report found Nama incurred a potential loss to the taxpayer of £190m (€223m) in the sale. Nama has rejected the finding, claiming it is based on an incorrect assumption of the discount rate used in the sale and that the probe was carried out by C&AG staff with no market experience of loan sales.

Despite the bitter disagreement between the agencies, Mr Donohoe said he had confidence in both.

He said Nama had "exceptionally important duties" that the State expected it to deliver, and added: "I have confidence in their ability to do this."

He also expressed confidence in the C&AG, saying it was an "exceptionally important body".

Mr Donohoe said that while the agencies had "differing views", the Government respected the reports of the C&AG and this was one of the reasons it believed "a further investigation is necessary".

Mr Donohoe said there would be consultation with opposition leaders today on what form the inquiry should take.

Fianna Fáil finance spokesman Michael McGrath said the "shadow of Frank Cushnahan looms large in the report". He said that when allegations of an "inappropriate fee arrangement" between Mr Cushnahan and Pimco - a bidder for the loan book - emerged in March 2014, "the whole process should have been stopped".

He said the sale instead went ahead to Cerberus, and added: "The sad part is we will never know for sure what the alternative outcome might have been, what return taxpayers may have got if a different process had been embarked upon."

Mr McGrath said the "political backdrop" to Nama's sales strategy should be included in the new inquiry.

He argued that in 2013 and 2014 "government strategy was that Nama was to accelerate its sales process".

He said Fianna Fáil wanted to know the impact this had on the operation of Nama.

Irish Independent

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