Michael McCarthy (Cork South West, Labour)
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I appreciate that this issue has been selected for debate. I bring to the attention of the Minister of State, Deputy Brian Hayes, an alarming situation regarding NAMA which came to light recently, namely, its practice of paying the country's most indebted developers enormous sums of money on an annual basis. This is unacceptable at a time when the country is effectively in receivership and we should be building up confidence in our State institutions.

At a recent meeting of the Committee of Public Accounts, I asked the chairman of NAMA how many developers are being paid by the agency on an annual basis and what is the maximum salary ceiling for developers engaged with the NAMA process. I was informed that two separate developers are being paid €200,000 per annum by the agency and that between 110 and 120 other developers are in receipt of between €70,000 and €100,000 per annum. In addition some of them may be on commission.

In effect, this means that two of the country's most indebted developers are being paid almost as much as the Taoiseach, receiving five times the average industrial wage. NAMA was created as a result of the mismanagement of the economy but this brings the entire process into disrepute as we approach a very difficult budget. How can we expect the public to have any confidence in a system which generously rewards developers to such an extent, given what they have done to this country?

In the case of the two developers on the maximum salary of €200,000, their remuneration is at the level of the cap on public sector pay. It is reasonable to assume that if that cap had not been introduced by this Government under the aegis of the Minister for Public Expenditure and Reform, Deputy Howlin, these developers might have been earning in excess of that sum.

The chairman of NAMA argued that the agency was reluctant to pay this sum but the decision was made by the board to arrive at that conclusion. I do not accept that and believe that no reasonable, thinking person would share that view. In this context, I call on the Minister for Finance to review the NAMA legislation in order that he, rather than the board of NAMA, would have power to set the payment rate for developers.

Following the revelation by the chairman of NAMA at the Committee of Public Accounts, I wrote to NAMA with a number of questions seeking clarity. First, I asked the names of the developers who are in receipt of €200,000 and the names of their respective companies. Second, I asked for a list of the property portfolios they had in their possession prior to being taken over by NAMA. Third, I asked the extent of each developer's liabilities engaged by the NAMA process; and fourth, the extent of the repayment of those liabilities to date.

In response I was told the information I sought in regard to individual debtors was not available because data protection law and constraints imposed on it by the NAMA legislation would not allow that to be the case. I was also informed that a change in the law would be required to enable NAMA to disclose this information. As I understand it, essentially NAMA is a commercial organisation which operates in the open market. This brings its own difficulties and sensitivities. It is of the utmost importance, however, that the agency be subjected to even more rigorous parliamentary scrutiny in the interests of transparency and accountability.

This very week, under the Freedom of Information Act this House released information to journalists who had sought figures in regard to expenditure on constituency offices by Members. Rightly, that information was made available. Contrast that transparency and the absolute lack of it in this case. There is a huge difference. I call the Minister for Finance to review the section of the NAMA Act which prohibits the agency from disclosing information about individual debtors. This is about transparency and accountability.

Brian Hayes (Dublin South West, Fine Gael)
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I thank Deputy McCarthy for raising this very important matter. As the Minister for Finance, Deputy Noonan, stated in the Seanad some time ago, he does not propose to change the NAMA legislation at this stage.

NAMA has advised that in agreeing business plans with debtors, it normally looks for a reduction of 50% to 75% in overall costs and that any remuneration paid to debtors comes from this much reduced budget. I am very much aware of the concerns about the remuneration packages that certain NAMA debtors are being allowed to take from the overheads figure agreed by NAMA. However, unpalatable as this may seem, I can accept the assurances from NAMA there really is no better alternative if we wish to ensure the maximum return is made to the Irish taxpayer. In recent weeks, the chairman of NAMA has made this point to both the Committee on Finance and Public Expenditure and the Committee of Public Accounts.

The chairman further stated he would love to be able to tell Deputies that the agency could refuse to deal with all 850 developers, throw them out and get someone else to run the businesses. However, he made it clear that while this would be a very popular decision, it would not make commercial sense because, regardless of what they had done, the developers were the people in place who knew their own businesses.

NAMA has informed me that, in general, employing an external asset manager to manage the assets would cost significantly more than the cost of retaining the original debtor. The chief executive officer of NAMA recently stated that the cost of an external manager would range in the region of 1.5% of the asset value per annum. He pointed out that on an asset of €100 million value, one could pay €150,000 to a private sector individual to manage it but one might be able to get a debtor to do it for €60,000 or €70,000. According to NAMA, the majority of debtor remuneration packages fall into the €70,000 to €100,000 range, including all benefits-in-kind. However, in the two cases the Deputy alluded to, the debtors' remuneration package authorised by NAMA as part of the budget for overheads is €200,000. I am aware that €200,000 is an extraordinary amount of money for most of us. The lower figure of €75,000 is an amount that many people would love to earn. However, the figures are driven by the need to maximise value for the taxpayer.

I am informed by NAMA that these packages generate a much better return to the taxpayer than the option of enforcement and the employment of asset managers for considerably large portfolios of assets. Several billion euro of taxpayers' money could be at stake. NAMA is required to get the best return by having the person it believes is best placed to help it to achieve its returns. In many of these cases, the alternative would be to pay exorbitant rates of up to €180 per hour to receivers who could take a long time to work out the assets. Using this figure, a 40-hour week would amount to over €7,000 in fees per week. NAMA assures me that it drives as hard a bargain as it possibly can, or as is practical, on behalf of the taxpayer with developers whose loans it controls. The reality is that if developers do not have an incentive to work with NAMA, they are most unlikely to engage with NAMA and the agency will be forced to foreclose through the appointment of receivers. In that case the return to NAMA, and as a consequence the taxpayer, would likely be significantly reduced. The fact that NAMA has had to take enforcement action in 91 cases shows that many developers consider NAMA's terms and conditions to be too onerous. It also shows that NAMA is not soft on developers and is looking to impose tough conditions. NAMA has assured the Minister for Finance that it will continue to make decisions about working with developers or taking enforcement actions on a case-by-case basis, in line with its commercial mandate. The objective of the incentive is to get the debtor working, not so much for himself but for the taxpayer and for NAMA. Although this is difficult to accept - I appreciate the Deputy's remarks in that respect - in the view of NAMA it is the most appropriate means of achieving its objectives as an organisation at this time.

Michael McCarthy (Cork South West, Labour)
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I thank the Minister of State for his reply. I am giving this matter the attention I feel it deserves. We are talking about an organ of the State. There is a moral requirement on NAMA to act in the interests of the taxpayer. The revelation that NAMA is paying huge sums of money to developers makes it difficult for ordinary people who think reasonably to accept or have any faith in the NAMA process. Like everybody else in this House, I understand the mess this Government has inherited. There is a huge sense of irony - it is almost an injustice - in the fact that some of those who got us into this mess are being paid so much money. When I asked at a meeting of the Committee of Public Accounts why this is happening, I was told the people in question managed multi-billion euro property portfolios. Surely the portfolios in question were mismanaged. It is difficult for ordinary working people to be expected to shoulder the pain that next month's budget will inevitably inflict on them when this kind of thing is going on. I ask, in the interests of fairness, that we keep this matter under constant review. It is almost unthinkable that our national Parliament has no jurisdiction over the ability of a board of an organ of the State to make decisions on salary levels. I urge the Minister and the Government to keep this matter under review. I will revisit it in the new year. I thank the Minister of State for his response.

Brian Hayes (Dublin South West, Fine Gael)
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I thank the Deputy for his constructive suggestions about keeping this matter under review. I have been informed by the Minister for Finance and the Government generally that this matter is being kept under constant review. Many Deputies, including Deputy McCarthy's colleague, Deputy Costello, have rightly put on the record of this House the necessity to have greater parliamentary engagement or scrutiny of the operation of NAMA. The chairman of NAMA and other officials from that body have been before the relevant committees of this House. The Government will consider any proposal which would make that process of scrutiny more comprehensive. We can work on that within the terms of the existing legislation or outside those terms. The Government intends to examine this matter again to determine whether greater parliamentary scrutiny is possible. Such engagement is needed to ensure people understand the reasons this is happening. In this case, it is the lesser of two evils. The view is that it is cheaper in the long run to use these people as part of the system and pay them for this purpose. I am sure the Deputy is aware that if there is some movement in the property market, the taxpayer will make some returns on these assets. We are open to considering the possibility of greater parliamentary scrutiny of the task and operation of NAMA. If Deputy McCarthy or any other Deputy would like to put concrete proposals to the Government, they will be entertained and their proposals examined in the most constructive way possible.