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Billions, scandal – Nama drama to run and run


AT THE HELM: Frank Daly, chairman, left, and Brendan McDonagh, chief executive of Nama, have sought to downplay claims about leaks from the agency. Photo: Tom Burke

AT THE HELM: Frank Daly, chairman, left, and Brendan McDonagh, chief executive of Nama, have sought to downplay claims about leaks from the agency. Photo: Tom Burke

AT THE HELM: Frank Daly, chairman, left, and Brendan McDonagh, chief executive of Nama, have sought to downplay claims about leaks from the agency. Photo: Tom Burke

SHOULD it stay or should it go? That's the question being asked about Nama since Finance Minister Michael Noonan let it be known last week that he has told the agency's chiefs to "explore the implications of bringing forward the sale" of the remaining assets on their books.

But while Mr Noonan was anxious to point out that Nama won't be offloading everything in one go before its formal wind-down date of 2020, one could hardly blame him for wanting to speed things up and take advantage of the healthy appetite right now among international investors for Irish commercial property.

Nor could anyone blame the minister if he simply wanted Nama to go the way of the Irish Bank Resolution Corporation before the general election in 2016. The removal of the toxic loan agency from the landscape would allow Fine Gael to boast to voters of how it had done away with the boom and bust's unholy trinity of the promissory notes, Anglo, and now Nama, along with waving goodbye to the Troika.

Given how embedded Nama has become since its establishment in 2009, though, the prospect of it being wrapped up completely over the next two years, while possible, is unlikely.

From its increasing involvement and interest in joint ventures with foreign investment funds in Dublin's docklands to the imminent transfer on to its books of an estimated €6bn in loans left over from the liquidation of the IBRC, unravelling Nama overnight is easier said than done.

All of which could prove to be unfortunate for the Government given its efforts to distance itself from even the threat of that type of scandal which it believes to be the exclusive preserve of its predecessors in power.

For quite apart from the perennial complaint that Nama lacks transparency or that it customarily withholds information on transactions on the grounds of commercial sensitivity, the agency is the subject of growing anxiety in political circles over the alleged misconduct of certain of its officials.

As of now, the Garda Bureau of Fraud Investigation is actively investigating three cases involving claims that Nama employees leaked confidential information, including one where it is alleged that a "full file" on the financial affairs of property tycoon Paddy McKillen was given to a third party outside the agency.

And while both Nama's chairman Frank Daly and its chief executive Brendan McDonagh have sought to downplay the matter by questioning the credibility of Enda Farrell (the former Nama official making many of the claims) the gardai are treating all three investigations seriously.

Should any of the allegations made by Mr Farrell – who it should be pointed out is under garda investigation himself – be proven, Nama could find its entire operation at all levels being opened up to intense scrutiny by the Oireachtas.

While the instigation of such a thorough inquiry would of course be unfortunate for Messrs McDonagh and Daly and for Nama generally, it might go some way to assuage the concerns of critics who believe the agency has too much power and too little oversight of its affairs.

As it stands, Nama's principal interrogator – the Dail's Public Accounts Committee (PAC) – has neither the time nor the resources to carry out an effective assessment of its performance.

This much was patently evident last December when Nama chiefs went before the PAC to address the controversy that blew up around the claims made by Enda Farrell in relation to the alleged leaking of confidential information by Nama officials.

Having agreed to a request from Nama for a meeting at short notice, unsurprisingly, PAC members found themselves ill-equipped to ask any questions other than those for which Nama had already prepared the answers.

Put simply, the politicians had the agenda of their own meeting set for them.

In another rather bizarre illustration of the agency's current inscrutability, Nama's 'Relationship Manager' Martin Whelan wrote to the PAC last month to inform it of the outcome of the evaluation Nama's board had recently conducted on itself.

While Mr Whelan stressed in his letter that this "self-assessment" was based upon "good practice guidance" from such respected institutions as the OECD and European Commission, the conclusion by Nama's board that it was 95 per cent "satisfied" or "very satisfied" with its performance would be one many of the developers on its books might take issue with.

Not that too many of them have the confidence to do so publicly. While there is no hard evidence to show that Nama has engaged in any form of reprisal in response to a developer's criticism of the conduct of its officials, could that be because so few of the developers have spoken out for fear of the consequences?

Nama is certainly acutely sensitive to any suggestion that any of its officials might be acting with anything other than the highest standards of professionalism and integrity.

Indeed, in his appearance before the Dail's Public Accounts Committee on December 20 last, Nama chief executive Brendan McDonagh sought to dismiss the very serious allegations (a number of which are currently the subject of garda investigation) by suggesting they could be attempts to "intimidate or discredit Nama" by parties with whom it is in dispute.

"Presumably the strategy is that if enough mud is thrown, some of it will stick," Mr McDonagh said.

The Nama chief's position is one Finance Minister Michael Noonan would appear to support. Responding to a recent parliamentary question from Sinn Fein TD Pearse Doherty on the matter, he said he shared the view that there was an "organised campaign of misinformation whose objective is to undermine the effectiveness of Nama''.

As Mr Noonan and his officials at the Department of Finance conclude their current review into Nama's operations, they would be well advised to investigate the allegations being made against the agency themselves before dismissing them so readily.

Sunday Independent