Seán Fleming (Laois, Fianna Fail)
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Today, the committee will continue its examination of the Comptroller and Auditor General's Special Report No. 94 on the National Asset Management Agency, NAMA, and its sale of Project Eagle. Project Eagle was the code name given to the sale of NAMA's Northern Ireland loan portfolio.

Last week, we had an engagement with the Comptroller and Auditor General on his report and with NAMA on the conclusions in the report. Today, I welcome the Minister for Finance, Deputy Michael Noonan, and thank him for making himself available to the committee to discuss matters raised in the Comptroller and Auditor General's report. It is important to hear about the Minister's role and communications with NAMA and the Northern Ireland Executive on the sale of the Northern Ireland loan portfolio.

I remind members, witnesses and those in the public gallery to ensure that all mobile phones are switched off or on aeroplane mode. Putting them on silent is not adequate as it interferes with the recording of proceedings.

Members are reminded of the provisions of Standing Order 186 that the committee shall refrain from inquiring into the merits of a policy or policies of the Government or a Minister of the Government or the merits of the objectives of such policies. Finally, members are reminded of the long-standing ruling of the Chair to the effect that members should not comment on, criticise or make charges against a person outside the House or an official by name in such a way as to make him or her identifiable. I call on the Minister to make his opening statement.

Michael Noonan (Limerick City, Fine Gael)
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I thank the Chairman. First, I would like to introduce the officials who are with me. They are all officials of the Department of Finance. On my left is Ms Ann Nolan, second secretary in the Department of Finance, and the two gentlemen accompanying me are Mr. Des Carville and Mr. Declan Reid. They are both attached to the share management unit of the Department of Finance and both have extensive experience in the private sector on matters which are relevant to the discussions of the committee.

I thank the committee members for inviting me to discuss the Comptroller and Auditor General's value for money report on NAMA's sale of its Northern Ireland portfolio. I wish the committee well as it undertakes its important work.

I will begin by placing NAMA's activities in context. We have all come a long way since the beginning of the crisis and we must not forget key challenges we have faced and overcome in getting to where we are today. One of our main priorities in recovering from the crisis was to increase confidence in the Irish sovereign and the Irish market in order to reduce the cost of borrowing for the State, banks, businesses and consumers. Creating NAMA was a bold step by my predecessor, the late Brian Lenihan. It was taken to reduce instability and uncertainty in our banking system and, ultimately, to help normalise land and development markets. Created at a time of scarce State resources, during a period of reliance on troika funding and emergency ECB liquidity, NAMA came with a very material contingent liability for the State in the form of €30.2 billion, guaranteed by the State, of NAMA bonds.

At NAMA's inception, very few believed that it would eliminate this contingent liability, never mind deliver a surplus. Most thought NAMA would fail in its remit. This view persisted throughout the bailout programme so when we think about NAMA, we must remember how well it has performed versus our expectations and the support its overwhelming success has provided to Ireland's recovery. NAMA has materially reduced the State's contingent liability and our banks' reliance on emergency ECB liquidity. NAMA's steady successes have made a major contribution to the recovery of our economic freedom and have helped reduce our cost of debt below that of Greece, Portugal, Spain and Italy, positively impacting the Exchequer, the banks, Irish businesses and consumers. We should take a moment to imagine where our economy would be if NAMA had not been established as an independent commercial entity and had not been as successful as it has been in reducing the State's contingent liability.

Turning to the debate over the value achieved by NAMA on its sale of the Northern Ireland loan portfolio, the committee has heard the Comptroller and Auditor General's and NAMA's differing opinions and positions. I have full confidence in both of these important State actors. Their differences of opinion do not alter the continuing confidence I have in NAMA, or the standing of the Comptroller and Auditor General. I am confident that by focusing on the salient issues, the Committee of Public Accounts can help navigate the technical issues under discussion.

The Government position remains that the Committee of Public Accounts is an appropriate forum for the consideration of the Comptroller and Auditor General's report and for the exercise of public accountability in these matters. In addition, the Government has its own responsibilities to ensure all matters of public concern that require further investigation are addressed in a speedy and effective manner and so has agreed with party leaders that a statutory commission of investigation would be established without delay.

I will now focus briefly on my powers as Minister for Finance and my knowledge of the Project Eagle sale process. Around this time last year, the Department of Finance provided to the Committee of Public Accounts over 40 documents regarding my and my Department's knowledge of the sale process. These documents remain available on the Department of Finance's website and I am happy to discuss them today.

I and the Northern Ireland Executive shared an understanding of the importance of NAMA to the economy in Northern Ireland and the care needed in dealings in Northern Ireland regarding NAMA's management of its portfolio of assets in that jurisdiction and any potential sales process. In light of these sensitivities, I had a number of discussions with members of the Northern Ireland Executive regarding NAMA's Northern Ireland loan portfolio and a potential sales process. These discussions are a matter of public record.

The fact that I, and my counterparts in the North, were cognisant of a potential sale and mindful of the potential impact on the Northern Ireland economy should not be surprising. However, this should not be misconstrued as political pressure on NAMA. As has been pointed out by the NAMA chairman, there was no political pressure on NAMA regarding this sale. Nor was there any divergence of views expressed to me by any party within the Northern Ireland Executive regarding NAMA and a potential sale of its Northern Ireland loan portfolio. From my perspective, as Minister for Finance since March 2011, I can categorically assure the committee that this is the case.

For my part, in each interaction with my Northern Ireland counterparts, I stressed that NAMA was independent in its functions, should be approached directly by interested parties, was obliged to run a competitive process, and must be satisfied that it had achieved the best price.

For my part, in each interaction with my Northern Ireland counterparts, I stressed that NAMA was independent in its functions, should be approached directly by interested parties, was obliged to run a competitive process and had to be satisfied that it had achieved the best price. This is borne out by an examination of the records for each interaction between me or my Department and the Northern Ireland Executive. These records were provided for the committee one year ago.

It has been suggested that I, as Minister for Finance, should have directed NAMA to halt the sale process when I became aware of the circumstances under which PIMCO had withdrawn from the process. On 13 March 2014 the NAMA chairman called to inform me of developments in the sale process and the board's decisions in this regard. The chairman recounted that on 10 March 2014 PIMCO's compliance department had informed NAMA of a proposed advisory fee arrangement with a former external member of NAMA’s Northern Ireland advisory committee, NIAC. The chairman advised me that, on learning that NAMA did not find this acceptable, PIMCO had withdrawn from the process. The chairman informed me that, having carefully considered the impact of PIMCO’s withdrawal on the sale process, the board was minded to continue the process with the remaining bidders, subject to receiving advice from their financial adviser, which I understand was received a number of days later. It is important that I make this very clear. The chairman was not, in any respect, requesting permission to proceed with the sale, nor was he required to. He was notifying me of issues that had arisen and the board's considered decision to proceed. I appreciated the courtesy of being informed by the chairman, as this was a potentially sensitive issue.

Suggestions that I, as the Minister for Finance, should have interfered with NAMA's commercial decision and called a halt to the board approved sale process fundamentally misunderstand NAMA's independent mandate and my role as Minister. From the outset, during the formulation of the NAMA Act, the Oireachtas shared the view and strived to ensure NAMA would be independent in its decision-making. As a result of this broad consensus, section 9 of the Act is unambiguous when it states, "NAMA is independent in the performance of its functions", prohibiting political interference for good reason. I am sure the committee will agree that there is no role for political influence in the commercial decisions of NAMA.

Section 12 bestows the NAMA board with the power to "sell or dispose of the whole or any part of the property or investments of NAMA, either together or in portions, for such consideration and on such terms as the Board thinks fit". It has been suggested I should have directed NAMA to halt the sale, or should have directed it to break up the portfolio into smaller lots for sale, or should have instructed it to work-out the portfolio over a long time horizon. I want to be absolutely clear on this point - there was no legal basis for me on which to instruct NAMA to do any of these things. Under section 14(1) of the NAMA Act, I "may give a direction in writing to NAMA concerning the achievement of the purposes of the Act", as set out in section 2. This effectively limits the Minister’s ability to direct NAMA to undertake such actions that directly reflects the wishes of the Oireachtas as set out in the purposes of the NAMA Act. Section 2 sets out these purposes which include "to protect the interests of taxpayers". This section has been cited as the clause which could have empowered me to direct NAMA to halt the sale process.

It is important to be specific in recounting what was being decided at the time. The chairman of NAMA informed me that, having consulted its financial adviser, the board had made a considered commercial decision to continue with the sale process. I should correct this. The chairman of NAMA informed me that he was about to consult his financial adviser and that if the advice was favourable, they would proceed with the sale process to maximise value in achievement of the purposes of the Act. There is nothing to suggest from this that NAMA was not operating in line with the purposes of Act in proceeding with the sale process. That being the case, there was no legal basis on which I could have directed NAMA to discontinue the sale process. Department of Finance legal advice has confirmed this position. Any such direction would have been an interference with NAMA's commercial independence and conflicted with NAMA’s purpose to deal "expeditiously" with its assets as set out in section 10 of the Act. It is important for me to be clear when I say that, even if I had had the legal basis on which to interfere with the NAMA board’s considered decision at the time, there was no evidence that such interference would have been in the interests of the taxpayer and I am still of that view. In fact, neither the Comptroller and Auditor General's audit of NAMA's annual accounts for 2014 nor the recently published value for money report have asserted that the sale process should have been halted.

In summary, in crafting the NAMA Act in 2009 the idea that NAMA should have statutory independence from the political sphere was broadly shared across the Houses.The Oireachtas worked to ensure NAMA would be independent in its decision-making and insulated from political influence. This is enshrined in the NAMA Act. A number of Deputies contributed and I want to quote them. As Deputy Joan Burton astutely put it on Committee Stage, "One does not want Members of the Oireachtas being in a position to interfere in respect of the activities of NAMA." Similarly, the Chairman of this committee contributed on many occasions during the formulation of the Act and was also firmly in the "hands-off" camp when he stated about NAMA's valuation process:

It would be better to take this Minister and all future Ministers out of this role. It would remove them from the process and would be a far more independent and transparent way of doing it.

Deputy Michael McGrath also referred to NAMA during a motion on the accountability of Government agencies and companies stating, "While oversight is important, it cannot be allowed to interfere with the operational decisions that have to be made by bodies." Many more Deputies contributed and members can check the record. I could not agree more with these statements and believe the Oireachtas did, ultimately, strike the appropriate balance between independence and accountability for NAMA.

As the committee will be aware, we are charged with the task of upholding not only the letter but also the spirit of the law. I believe I have properly upheld both the letter and the spirit of NAMA Act.

Seán Fleming (Laois, Fianna Fail)
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I thank the Minister for his opening statement. The lead speaker-----

Catherine Connolly (Galway West, Independent)
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I am sorry, but this is important. I refer to the paragraph the Minister has corrected.

Seán Fleming (Laois, Fianna Fail)
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What page?

Catherine Connolly (Galway West, Independent)
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Page 8. Do I understand the Minister has now corrected, "The chairman of NAMA informed me that, having consulted its financial adviser...," to, "The chairman of NAMA informed me that he was about to consult..."?

Michael Noonan (Limerick City, Fine Gael)
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Yes, that was in the first draft of the speech. All of the detail was checked. What happened was I received a call from Mr. Frank Daly who told me what had happened in the withdrawal of PIMCO. He also told me that the board was minded to proceed with the competition with the remaining interested parties but that he would consult Lazard first. About three or four days later it was confirmed, after consultation, that they were proceeding.

Mr. Declan Reid:

The correct version is in the second paragraph of page 6

Seán Fleming (Laois, Fianna Fail)
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That point is dealt with it on page 6. The paragraph to which the Deputy referred slightly contradicts what is written on page 6 of the Minister's statement.

Michael Noonan (Limerick City, Fine Gael)
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I am sorry, but we corrected it in the first instance. When scrutinising it subsequently, the original draft appeared, which is incorrect.

Seán Fleming (Laois, Fianna Fail)
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It is in the context of what is written on page 6 in the first instance and we acknowledge the correction.

The lead speaker is Deputy Alan Kelly who will have 20 minutes. He will be followed by Deputy Catherine Murphy who will have 15 minutes. It is her first meeting and she is welcome. The remaining members have indicated in the following sequence: Deputies Marc MacSharry, David Cullinane, Alan Farrell, Mary Lou McDonald, Shane Cassells, Josepha Madigan and Catherine Connolly. Following the first two contributors, members will have ten-minute slots and everybody will have the opportunity, if necessary, to come back in a second time. If it looks like the meeting will continue for an extended period, we will take a reasonable break.

Alan Kelly (Tipperary, Labour)
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I welcome the Minister for Finance, Deputy Noonan, and thank him for coming before the committee. I presume he had no issue with appearing before the PAC today?

Michael Noonan (Limerick City, Fine Gael)
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Is that a question or an observation?

Alan Kelly (Tipperary, Labour)
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Both.

Michael Noonan (Limerick City, Fine Gael)
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No, the letter I received from the clerk came on Friday evening. I was indisposed at the time and I was discharged-----

Alan Kelly (Tipperary, Labour)
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So it actually took 24 hours, that was all?

Michael Noonan (Limerick City, Fine Gael)
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No, I said in a press statement that I was reviewing the request, which I believe was obvious. Then on Tuesday I decided-----

Alan Kelly (Tipperary, Labour)
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Was there an issue? That is all I am trying to establish.

Michael Noonan (Limerick City, Fine Gael)
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There was an issue because I knew I would be creating a precedent but I had no issue in appearing personally.

Alan Kelly (Tipperary, Labour)
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What was the precedent?

Michael Noonan (Limerick City, Fine Gael)
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As I understand it, and I was Chairman of this committee for several years, the precedent would be that Accounting Officers are responsible to the Committee of Public Accounts, not Ministers. At the start of-----

Alan Kelly (Tipperary, Labour)
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But many other Ministers-----

Michael Noonan (Limerick City, Fine Gael)
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If the Deputy will let me finish. At the start of the normal meetings of the Committee of Public Accounts, the practice in my time was that a statement would be read out informing members that they should not drift in to the area of policy; that was a matter for Ministers. There are very few precedents for Ministers appearing before the Committee of Public Accounts. My intention was subject to advice that I would appear. I do not have a problem with appearing; I have a high regard for all the members of the committee.

Alan Kelly (Tipperary, Labour)
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Okay.

Michael Noonan (Limerick City, Fine Gael)
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It was the issue of precedent. When I became aware of the request to appear, I addressed it on Monday and Tuesday and I confirmed on Tuesday that I would attend.

Alan Kelly (Tipperary, Labour)
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I thank the Minister, as I wanted to clarify that point. As he is aware we are all stuck to certain time limits so précis answers will be appreciated. There was a bit of a controversy here last week with regard to selective briefings. The Minister agreed to come before the committee on 20 September. It is now 6 October and I presume there have been no briefings with regard to any members of the Committee of Public Accounts during that time.

Michael Noonan (Limerick City, Fine Gael)
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No, members can speak for themselves, but I did not brief anybody.

Alan Kelly (Tipperary, Labour)
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Okay. I just wanted to get that technicality out of the way because we will be asking that of everyone who will appear before this committee on this matter. We have a fairly detailed report here and the committee has to get to the facts. The Minister will be able to help us get to the facts but the report is quite incredible. Does the Minister accept the report?

Michael Noonan (Limerick City, Fine Gael)
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Of course I accept any report that is a value-for-money report produced by the Comptroller and Auditor General. As I have said, I was Chairman of the Committee of Public Accounts. However, it is also evident that there is a conflict in the report between the views of the National Asset Management Agency, NAMA, and the views of the Comptroller and Auditor General.

Alan Kelly (Tipperary, Labour)
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So the Minister has confidence in both organisations?

Michael Noonan (Limerick City, Fine Gael)
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Yes, absolutely.

Alan Kelly (Tipperary, Labour)
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How does the Minister tally that, given the organisations are at odds with regard to £190 million?

Michael Noonan (Limerick City, Fine Gael)
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One can have confidence in two organisations even when they do not agree on every detail. It is quite apparent to the Deputy, from the report and from the committee's first hearings that there is a conflict on whether best value was got or not. It is up to the committee to resolve the conflict, not me. I cannot resolve the conflict for it-----

Alan Kelly (Tipperary, Labour)
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But again-----

Michael Noonan (Limerick City, Fine Gael)
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-----but it does not diminish my confidence in NAMA, which I believe did a great job, or in the Comptroller and Auditor General's office.

Alan Kelly (Tipperary, Labour)
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Okay, we will come back to that point but-----

Michael Noonan (Limerick City, Fine Gael)
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Chairman, the Deputy must let me answer.

Alan Kelly (Tipperary, Labour)
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I know but the Minister should be conscious that-----

Seán Fleming (Laois, Fianna Fail)
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I ask people to be concise because there are time constraints.

Alan Kelly (Tipperary, Labour)
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We have time constraints, which is the issue here.

Michael Noonan (Limerick City, Fine Gael)
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I know but I will stay as long as the committee wants me to stay-----

Alan Kelly (Tipperary, Labour)
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Okay.

Michael Noonan (Limerick City, Fine Gael)
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-----but the Deputy cannot cut me off when I am giving him an answer that is explaining my position.

Alan Kelly (Tipperary, Labour)
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I know but once we get the gist of it I am not going to pursue the Minister on it.

Michael Noonan (Limerick City, Fine Gael)
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Yes.

Alan Kelly (Tipperary, Labour)
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Do not worry, if I need to I will. With regard to dealing with NAMA, it has quoted the Department as saying that the standard of expertise and experience of staff at the Comptroller and Auditor General's office is questionable with regard to how they performed when looking at this sale. How does the Minister feel about that and is it reflective of the Department's view? Has the Department put a question mark over the staff, the competence and the expertise of the Comptroller and Auditor General's office on this issue?

Michael Noonan (Limerick City, Fine Gael)
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I have full confidence in the Comptroller and Auditor General's office. When I was Chairman of the Committee of Public Accounts, I worked closely to the former Comptroller and Auditor General, John Purcell. I would not personally know the personnel in the Comptroller and Auditor General's office now or the current Comptroller and Auditor General but I have absolute confidence in them that they are doing their job properly.

Alan Kelly (Tipperary, Labour)
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Why would NAMA, in that reference to the Department of Finance, feel there was not that level of competence, expertise or staffing in the Office of the Comptroller and Auditor General to carry this out to the level required?

Michael Noonan (Limerick City, Fine Gael)
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I think the Chairman has called my officials before the committee for a future date and they will answer for themselves.

Alan Kelly (Tipperary, Labour)
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But they are not in charge.

Michael Noonan (Limerick City, Fine Gael)
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Deputy, with respect, anyone reading the report would see that there was property expertise which the Comptroller and Auditor General intended putting in place but I understand he failed to fill the vacancy in a competition. I am not saying there is any lack of expertise in the Office of the Comptroller and Auditor General but it seemed to be his intention to acquire outside expertise to assist him. Is that not correct?

Mary Lou McDonald (Dublin Central, Sinn Fein)
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No. That is not correct.

Alan Kelly (Tipperary, Labour)
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No, that is incorrect and is factually inaccurate.

Seán Fleming (Laois, Fianna Fail)
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I want to be fair now. I want to avoid bringing in the Comptroller and Auditor General because I do not want a cross-exchange. I believe he said he had intended acquiring that expertise for the section 226 tri-annual report. That did not happen and that report is not out yet.

Michael Noonan (Limerick City, Fine Gael)
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I thank the Chairman for that explanation.

Alan Kelly (Tipperary, Labour)
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I am trying to get to the bottom of how NAMA is inferring the departmental officials did not believe there was enough expertise and staff in the Office of the Comptroller and Auditor General to do this type of work. Does the Minister stand over this or is NAMA incorrect in its statement?

Michael Noonan (Limerick City, Fine Gael)
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No. Under the normal rules and procedures of the Committee of Public Accounts, it is the Accounting Officer who is amenable to this committee. When the Accounting Officer and officials are before the Committee of Public Accounts, they speak for themselves.

Alan Kelly (Tipperary, Labour)
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There are officials here.

Michael Noonan (Limerick City, Fine Gael)
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Does Ms Ann Nolan wish to address the matter?

Ms Ann Nolan:

Yes, there were a number of meetings between the Department. We wrote one letter to the Comptroller and Auditor General but there were a number of meetings between the officials, including Mr. Declan Reid. I do not know if Mr. Des Carville was at those meetings. At those meetings I believe there was a fairly robust exchange of views-----

Alan Kelly (Tipperary, Labour)
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In regard to what?

Ms Ann Nolan:

About a discount rate. As the Minister has said, both Mr. Declan Reid and Mr. Des Carville have a great deal of expertise and experience in the area of loan sales and the sale of underlying assets. They felt the discount rate was incorrect. I do not know if NAMA was necessarily at all of the meetings. I do not know whether NAMA's letter completely accurately reflects everything that was said at the meeting, it was one reference but it certainly is true-----

Alan Kelly (Tipperary, Labour)
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It is a reference that basically questions the capacity of the Comptroller and Auditor General's office from a financial point of view.

Ms Ann Nolan:

NAMA can answer for itself.

Alan Kelly (Tipperary, Labour)
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But it was referencing the Department.

Ms Ann Nolan:

The Department certainly did question the use of the 5% discount rate and suggested that had the Comptroller and Auditor General's staff experience in the sale of loan books, they would have used a higher discount rate.

Alan Kelly (Tipperary, Labour)
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I must move on, unfortunately, but some of my colleagues or I will come back to this point later. I have a number of other questions. That to me opens up a whole other can of worms with regard to issues. I am sure the Minister will agree it is quite unfortunate that this document was leaked four days before it was due to be published. Will the Minister offer any observations as to how that leak happened? How NAMA responded was quite unhelpful.

Michael Noonan (Limerick City, Fine Gael)
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I have no evidence that there was a leak of a document actually. I read the piece, I believe it was in The Irish Times- is that what the Deputy is referring to?

Alan Kelly (Tipperary, Labour)
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Yes, four days beforehand.

Michael Noonan (Limerick City, Fine Gael)
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Certainly someone had knowledge of the finding about the sum of money which the Comptroller and Auditor General would put in his report. The piece also said that the Comptroller and Auditor General had found irregularities in the way NAMA had proceeded. That was untrue. Effectively, the only accurate bit of the leak was the sum of money, which was close to €200 million. I do not know if that was based on a document or some kind of verbal hint to a journalist. After that, we checked and we can account for every document that was in the Department of Finance on the matter.

Alan Kelly (Tipperary, Labour)
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It is a pretty scary situation that somehow this information was leaked four days before it was to be published.

Michael Noonan (Limerick City, Fine Gael)
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I cannot help the Deputy on that. As I said, the Department of Finance can account for all documents.

Alan Kelly (Tipperary, Labour)
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Fair enough. Can the Minister establish some facts with regard to how he and the Department interacted with NAMA? How often would his Department meet with NAMA and how were those meetings documented?

Michael Noonan (Limerick City, Fine Gael)
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As that is a departmental question, my officials will answer that.

Ms Ann Nolan:

Mr. Reid can answer that.

Mr. Declan Reid:

We are in regular-----

Alan Kelly (Tipperary, Labour)
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Run of the mill?

Mr. Declan Reid:

We are in regular contact on a daily basis on one issue or another and we have management meetings once per month for which agendas are prepared and shared and minutes are taken.

Alan Kelly (Tipperary, Labour)
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Yes, but I am asking whether Mr. Reid is satisfied that all documentation to do with this matter was clear. We have already encountered an issue with a lack of detailed documentation. I am trying to establish whether we have a similar issue regarding what we will be discussing in the next few hours.

Ms Ann Nolan:

We would not have detailed documentation on this or any other loan sale process.

Alan Kelly (Tipperary, Labour)
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I am not asking about the loan sale process.

Ms Ann Nolan:

There is no documentation on the loan sale because our daily interaction has to do with overall metrics, not individual loan sales.

Alan Kelly (Tipperary, Labour)
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I know that. I took that the first time it was said, but I am not asking about that. I am asking about whether correspondence, phone calls and everything else that passed between the Department and NAMA were documented.

Mr. Declan Reid:

We would strive to take accurate meeting notes when we have meetings and to take records of meetings, but not of all phone calls.

Alan Kelly (Tipperary, Labour)
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Regarding Project Eagle, it seems obvious from the documentation that was sent to the Minister, Deputy Noonan, from the then Minister of Finance in Northern Ireland, which had been sent on by Brown Rudnick, before our Minster sent it to NAMA that there was a concern about a fire sale of assets in Northern Ireland. Obviously, we would be sensitive to that. Northern Ireland is not just any other country to us - it is something in which we take a major interest. All of a sudden, though, there was a volte-face. Due to an expressed interest, the loan book could be combined and the fire sale was not an issue. In fact, it seems that there was a political necessity for this to be expedited as quickly as possible. The Minister mentioned that he had a number of phone calls. We are aware of one, which is documented in this report, with the First Minister and deputy First Minister. Why the sudden change in tack regarding the sale of assets by NAMA?

Michael Noonan (Limerick City, Fine Gael)
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There was a legitimate concern across parties in the Northern Executive that the impaired property and loans books in Northern Ireland would continue to be a drag on the Northern Ireland economy in the same way as when we had no property market in Dublin because impaired assets were a drag on it. Naturally, the Northern Executive was raising this issue. NAMA, which was outside that jurisdiction, was managing the assets in Northern Ireland. The First Minister and deputy First Minister were perfectly in order to be concerned about such an essential sector of their economy as building and development and trying to get it active. There was no volte-face. The Executive was interested in selling property at best value in Northern Ireland, but its primary interest was not what NAMA would get for the property, since that would accrue to NAMA and any profit would accrue to the Irish Exchequer. Its concern in Northern Ireland was to reactivate the sector economically. Speaking from memory, approximately £100 million in assets were disposed of by NAMA before Project Eagle arose. For one project that arose at the North-South meetings - it was a housing project in Dundonald - Executive members were appreciative of the way that NAMA worked with them. I do not think that there was an ongoing concern that was expressed every time that I met a Northern Ireland Minister, be it on a bilateral basis or at North-South talks.

Alan Kelly (Tipperary, Labour)
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Does the Minister accept that the Executive suddenly changed tack? From being worried about a fire sale, it was suddenly the case - perhaps across the political spectrum, but certainly on behalf of a number of politicians, including the Minister of Finance, the First Minister, etc. - that the Executive was a big advocate of the process that eventually materialised. It was a big change.

Michael Noonan (Limerick City, Fine Gael)
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Yes, but I-----

Alan Kelly (Tipperary, Labour)
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Was the Minister aware that the then First Minister, Mr. Robinson, Mr. Coulter and Mr. Cushnahan met PIMCO in early 2013? If so, when was he made aware? This change stemmed from it.

Michael Noonan (Limerick City, Fine Gael)
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This is rather speculative by me because I am not a part of the Northern Ireland Executive-----

Alan Kelly (Tipperary, Labour)
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I know.

Michael Noonan (Limerick City, Fine Gael)
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-----and I would not have any insight into its documents or meetings.

Alan Kelly (Tipperary, Labour)
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But the Minister would have been privy to the phone calls and letters-----

Michael Noonan (Limerick City, Fine Gael)
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No.

Alan Kelly (Tipperary, Labour)
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-----and he would have known that there had been a seismic change.

Michael Noonan (Limerick City, Fine Gael)
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No. The reason for the change was obvious. The Executive was nervous of a fire sale that might damage the Northern Ireland economy when there was no obvious way of selling the whole portfolio. When a major international property company emerged and approached the Northern Ireland authorities with an interest in the whole portfolio, it seemed to changed the situation. As I understand it, the company was interested in paying fair value price. The Deputy can see from the subsequent correspondence that the Executive changed-----

Alan Kelly (Tipperary, Labour)
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We will be here for a while. There is a pathway from the meeting to which I referred to the sale of Project Eagle, over which there are many question marks.

Regarding section 10 of the NAMA Act, the sale of assets and the legal requirement that NAMA get best value, would it not be fair to say that the Northern Ireland portfolio was no normal group of properties? For many reasons and sensitivities concerning Northern Ireland, NAMA had a different way of thinking. The Comptroller and Auditor General referenced this regarding a number of these issues, but not all. Would it not be fair to say that, due to a combination of political pressure - unlike us in the South, Northern politicians are not prohibited from applying political pressure - diplomacy stemming from the peace process and so on, the significant business risk in the sale of these assets and, as has been documented in many places, the declining debtor engagement, NAMA's judgment in achieving the greatest value under section 10 became cloudy? I am not saying that this is necessarily what materialised but, given these four extraordinary and complicating factors, some would be forgiven for thinking that the belief was that this was a worthwhile way of getting out of Northern Ireland. The Comptroller and Auditor General referred to a number of these factors. Maybe the cost to us was £190 million, but there were many different reasons compared with selling assets in Britain or elsewhere.

Michael Noonan (Limerick City, Fine Gael)
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As to giving an insight into what the thinking was among members of the Northern Ireland Executive, I cannot help the Deputy, but I could advise him to-----

Alan Kelly (Tipperary, Labour)
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The Minster was in conversation with them. He referred to a number of phone calls on this matter. The then First Minister thanked the Minister personally after the sale. I am paraphrasing, but he wanted to thank the Minister for the positive way in which the latter had dealt with the matter.

Michael Noonan (Limerick City, Fine Gael)
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What I had been going to say before the Deputy interrupted was that, if he wants an insight into the Northern Ireland thinking at Executive level, I understand that the deputy First Minister is appearing before the committee next week.

Alan Kelly (Tipperary, Labour)
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He is. We must get both sides of the conversation.

Michael Noonan (Limerick City, Fine Gael)
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It is also worth putting on the record that, from where I sat as finance Minister of the Republic, there was no difference of opinion between the political parties in Northern Ireland and there was no difference of opinion between the First Minister and deputy First Minister.

Alan Kelly (Tipperary, Labour)
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That is a very good point.

Michael Noonan (Limerick City, Fine Gael)
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When I was invited to meet the then First Minister, Mr. Robinson, at Stormont, it was scheduled to have the deputy First Minister there as well. He was not there on the day. When I met him subsequently, he apologised.

He said he had to attend a funeral and apologised for not being there. However, he never expressed to me that the views expressed by Mr. Robinson were not his views. There is a record, and the committee has a minute of it, of a telephone call which I received from the First Minister's office. The Deputy First Minister, Mr. McGuinness, was in the office. He was there at the time of the telephone call and that is recorded. He did not resile from the views expressed by Peter Robinson either. On all occasions, I gave the information that it was appropriate to give, I outlined the process and I said there would be no one-to-one deal here, that it would have to be a fully competitive process and that if they had a proposal, they should take it to NAMA as I did not deal with the commercial end of this.

Alan Kelly (Tipperary, Labour)
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Fair enough, and we will get the other side of those stories when they appear before the committee. Did it not sound odd to the Minister at the time that PIMCO withdrew? NAMA representatives have said that they got PIMCO to withdraw, but PIMCO is of a different view. Granted this was a difficult and busy time in the Government as there were ongoing issues regarding charities and the Garda Commissioner but did it not appear odd to the Minister and his Department that within a short space of time once PIMCO withdrew, given the payment fees that were announced, although now there is a difference of views as to whether it withdrew or not, Tughans and Brown Rodnick had switched horses and suddenly another package was put together and the sale was in place? Did it not seem odd to the Department how quickly this had been turned around?

Seán Fleming (Laois, Fianna Fail)
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I am conscious of the time, so I will let the Deputy complete this point and then we will move to the next speaker.

Michael Noonan (Limerick City, Fine Gael)
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I was not aware until very recently that the same advisers were engaged by Cerberus as had been engaged by PIMCO.

Alan Kelly (Tipperary, Labour)
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Was the Department aware?

Michael Noonan (Limerick City, Fine Gael)
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Ms Nolan, were you aware?

Ms Ann Nolan:

No, not at the time. We would not have seen the details. It would have been completely inappropriate for us to see the details.

Alan Kelly (Tipperary, Labour)
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As far as the Department was concerned, there was nothing unusual about the fact that this thing had fallen apart but it was back together in a matter of weeks.

Ms Ann Nolan:

No.

Michael Noonan (Limerick City, Fine Gael)
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It was very disturbing and very unusual that PIMCO's compliance department had discovered this in the United States and it advised PIMCO of the risk it was undertaking if it proceeded. PIMCO informed NAMA and in the ensuing conversation, PIMCO decided to withdraw. Then NAMA decided there was "sufficient competitive tension", to quote the phrase used, and it was advised by Lazard that there was sufficient competitive tension, to continue with the remaining interested parties to achieve best value on a competitive sale. That was the position.

Alan Kelly (Tipperary, Labour)
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On a point of information, the Minister said that PIMCO withdrew but NAMA contradicts that and says it pushed PIMCO off the table. NAMA contradicts the Minister.

Michael Noonan (Limerick City, Fine Gael)
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That is not a contradiction. If NAMA pushed PIMCO off the table, it pushed it off the table to withdraw.

Alan Kelly (Tipperary, Labour)
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In fairness, the Minister is playing with words now.

Seán Fleming (Laois, Fianna Fail)
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The Minister was not involved in that. We will return to that issue. I call Deputy Catherine Murphy.

Catherine Murphy (Kildare North, Social Democrats)
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The Minister outlined the context of his role in his opening statement and made his legal role clear, explaining that the NAMA Act is framed to ensure there is no political interference. However, it is fair to say, and the Minister probably would agree with me, that he is not passive in this either. As Minister for Finance, he has an insight that the rest of us do not have. He would have been briefed continually. What his role was and what engagement he had with NAMA arose repeatedly in parliamentary questions. The Minister said that he maintains a regular dialogue with NAMA and the chairman, that he received appropriate updates regarding NAMA's ongoing process and future plans and that he had also occasionally met the NAMA board, which provided him with an opportunity to share his views and to understand the board's views. It is fair to say that there is that type of engagement.

Michael Noonan (Limerick City, Fine Gael)
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The engagement tends to be NAMA providing me with information which it considers to be necessary. Under the Act, the powers of the Minister for Finance are to ensure that the purposes of the Act, as decided by the Oireachtas, are delivered. However, the Minister is excluded from getting involved in the commercial activity of NAMA.

Catherine Murphy (Kildare North, Social Democrats)
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Yes, but-----

Michael Noonan (Limerick City, Fine Gael)
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I must develop this point. There is a background and it arises from what Deputy Alan Kelly said. At the end of 2013, we exited the bailout. We were trying to get back into the market to get the moneys which we had previously received from our colleagues in the Europe Union and the IMF. NAMA was funded by NAMA bonds-----

Catherine Murphy (Kildare North, Social Democrats)
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Yes, but-----

Michael Noonan (Limerick City, Fine Gael)
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This is very important. The banks were given NAMA bonds in exchange for the loan books they transferred to NAMA. The NAMA bonds were paying a very small coupon, although they improved the liquidity of the banks. Frank Daly and the NAMA representatives constantly attended troika meetings. The European Commission and the European Central Bank, under the NAMA Act, were constantly urging that NAMA comply with the expeditious disposal of assets. They were doing so because they were providing a great deal of liquidity to the Irish banks at the time and also because the approximately €30 billion was a contingent liability on the Irish balance sheet. Therefore, there were considerations, not about Northern Ireland, but policy considerations about getting back into the market and getting out of the bailout. That is why the Oireachtas, in passing the NAMA Act, included the word "expeditiously". It was to work out the loan books quickly, so the banks could be restored to good health. The ECB wanted to discontinue the provision of lots of cheap money-----

Catherine Murphy (Kildare North, Social Democrats)
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I am sorry but I have a short period of time to ask questions.

Michael Noonan (Limerick City, Fine Gael)
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It is very important that the committee is fully informed on that background.

Catherine Murphy (Kildare North, Social Democrats)
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Much of that will not come as a surprise to us. The Minister would have been aware, by virtue of the fact that he would have received a letter from the Minister of Finance in Northern Ireland, that there was an interest in selling the Project Eagle loan book, which was brought as a package and was obviously referred to NAMA. The Minister would have been familiar with that from an early stage. Were any questions asked or did it strike the Department to consider, at that stage or at any stage into the future, how that loan book was assembled? Page 132 of the Comptroller and Auditor General's report states that the PIMCO analysis was conducted by way of reverse engineering NAMA's balance sheet and cross-referencing the publicly available information on NAMA's portfolio. Not all of the loans associated with the properties were based in Northern Ireland. It was approximately 50:50, with some in the UK and Germany. They are not all based in Northern Ireland and all of it would not have compromised the Northern Ireland property market. Given that was the case, did anybody in the Department carry out an analysis of how this came about or did the Minister have any discussions with NAMA on that? It is strange that one could put something together, just in a paper exercise, which would put together things whose common denominator is people who are from Northern Ireland, rather than the loans being based on properties in Northern Ireland. Did the Minister consider that at all?

Michael Noonan (Limerick City, Fine Gael)
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A couple of points arise from the Deputy's question. There were a number of Ministers of Finance in Northern Ireland during the period, so the Minister the Deputy refers to is Mr. Sammy Wilson. He wrote to me and the committee has a copy of his letter among its documents. The committee also has an accompanying document which sets out in outline, if not in considerable detail, the proposal that PIMCO had made in the first instance to the Minister of Finance in Northern Ireland, not to me. I advised him that there would not be a bilateral sale without a competitive tendering process. I outlined to him the way NAMA was required to operate and I forwarded a copy of his letter to NAMA because it was a matter for NAMA. The document that was generated by PIMCO which he advanced and which the committee has seen was a document on the proposed purchasers' side.

On the nature of the Project Eagle portfolio, it was entirely a matter for NAMA to assemble the portfolio. I understood at the time - the Deputy can question NAMA about this when it comes back to the committee, as I understand it will - that the common factor was the debts of Northern Ireland developers or builders. Even if these loan books arose from property in regional England or Germany, the common factor was that the lien was on Northern Ireland developers. I understand that was the common factor that put the portfolio together.

Catherine Murphy (Kildare North, Social Democrats)
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Yes.

Michael Noonan (Limerick City, Fine Gael)
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I would not regard that as surprising because if one is looks at it from the perspective of an economic Minister in the North who wants to get the sector moving again, whether the developer is impaired by a loan in Belfast or a loan in Berlin, if he is impaired, he is impaired and he cannot get back into business. That is, therefore, the common factor.

Catherine Murphy (Kildare North, Social Democrats)
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There was a deviation from the process that had been in place for the disposal of assets. Did that concern the Minister? This was a bespoke deal. There appears to have been a debtors' charter where there was debt forgiveness. There was a single rather than dual process in terms of the sales process, which would normally be opened up to a wide group before being narrowed down to a small number of bidders. Did this deviation from the process concern the Minister in relation to the optimum outcome for the taxpayer?

Michael Noonan (Limerick City, Fine Gael)
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It was not for me to look behind commercial decisions. It is a very good question but the Deputy should put it to NAMA, not to me because I cannot help her on that. As I pointed out in my speech, section 12 of the Act bestows the NAMA board with the powers to "sell or dispose of the whole or any part of the property or investments of NAMA, either together or in portions, for such consideration and on such terms as the Board thinks fit." That is what Oireachtas Éireann put in place - rightly I believe - in the NAMA Act. The primary concern was to keep politicians out of it and that commercial decisions would be made on their merits.

Catherine Murphy (Kildare North, Social Democrats)
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The Minister stated he would give his views to the NAMA board and listen to the NAMA board.

Michael Noonan (Limerick City, Fine Gael)
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None of that-----

Catherine Murphy (Kildare North, Social Democrats)
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If there is a deviation from a process that had been in play until this particular transaction, surely the Minister would have had a view on that or would have considered it or questioned whether it would deliver the kind of return it was expected to deliver.

Michael Noonan (Limerick City, Fine Gael)
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In the first instance, it is for the Comptroller and Auditor General to scrutinise the process and he has done so. Second, it is a matter for NAMA to answer the questions. However, section 12 says that the board is empowered to dispose of property for such consideration and on such terms as the board thinks fit. That is such a broad-ranging mandate that there was not a process that would apply to every sale. The process would vary depending on the circumstances of the sale. These decisions were entirely within the commercial mandate of NAMA and I would not interfere in the commercial mandate of NAMA. The Deputy would have a different set of questions if I had done so.

Catherine Murphy (Kildare North, Social Democrats)
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Was the Minister aware that the debtors' charter was unique and there was debt forgiveness as part of this package? Was the Minister made aware of this?

Michael Noonan (Limerick City, Fine Gael)
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Forgiveness of debt in any loan portfolio is a commercial decision and I was not involved in second-guessing commercial decisions. If one reverses the position and says that the Minister, if he has any doubts about a transaction, should intervene and stop it, if one had some kind of provision like that, it would mean I would have to sit beside the chief executive of NAMA every time there was a sale and second-guess him and say: "You can go ahead with that; it looks like good value." or "You have to stop that one; it does not look like good value." That would be a ridiculous legal position. One is either in or out and the Minister for Finance is out. The former Minister, the late Brian Lenihan, was absolutely right in the way he couched this and the Oireachtas was absolutely right in the way it enacted it.

Catherine Murphy (Kildare North, Social Democrats)
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The process followed until that point had been deviated from in this very big sale, which involved properties not only based in Northern Ireland but also loans associated with properties based in the United Kingdom, some of which were very large. There was a big shopping centre worth about £200 million and there were other loans around the £50 million mark or below. Some of them were very big assets or loans. There was a deviation from the process. The Minister wrote a letter on 25 July 2013, which is reproduced on page 22 of the report, in which he states - quite rightly - that NAMA is required to get the best financial return for the taxpayer. If there was a deviation from a process that was likely to deliver less than an optimum return or involved a bespoke deal that was very big, would that not have caused the Minister concern? Would he have got advice in his Department on it? Would it have stood out?

Michael Noonan (Limerick City, Fine Gael)
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First of all, as I have said several times, I have no commercial role in the activities of NAMA. Consequently, I would not know what its process was in disposing of one asset against another. I also think that section 12, which I read out, gives the discretion to the NAMA board to change the process in any particular sale. It is wrong to think that there was a standard process that was universally applied.

Under section 9 of the Act, NAMA is independent, as I have said before, but if one looks at sections 57 and 58, it is the Comptroller and Auditor General's responsibility to decide process, not the Minister's.

Catherine Murphy (Kildare North, Social Democrats)
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I have a number of other questions. There is a clear Civil Service guideline in place pertaining to conflict of interest. Whose responsibility was it to ensure these guidelines were implemented? Was it the Department's or NAMA's responsibility?

Michael Noonan (Limerick City, Fine Gael)
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Will Ms Nolan comment on that?

Ms Ann Nolan:

Is the Deputy talking about conflicts of interest within NAMA?

Catherine Murphy (Kildare North, Social Democrats)
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Yes.

Ms Ann Nolan:

That is a matter for the board of NAMA.

Catherine Murphy (Kildare North, Social Democrats)
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Okay. In relation to the Frank Cushnahan fixer-fee payment, when was that drawn to the Minister's attention and what did he do about it? Did he ask for legal advice? If advice was sought, who did he ask for advice? Did he ask the Attorney General for advice?

Michael Noonan (Limerick City, Fine Gael)
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I was made aware of it when the chairman of NAMA, Mr. Frank Daly, informed me that PIMCO was withdrawing and explained the circumstances of the PIMCO withdrawal. I have referred to that already. It was not a matter for me. The fees that were alleged to have been paid were on the purchaser side. They were not on the NAMA side.

Seán Fleming (Laois, Fianna Fail)
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The fees were to be paid but they had not been paid.

Michael Noonan (Limerick City, Fine Gael)
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Yes. It was on the purchaser side, not on the NAMA side and it was not in our jurisdiction.

Catherine Murphy (Kildare North, Social Democrats)
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Did the Minister form a view on the matter? Was he surprised that this emerged at that stage?

Michael Noonan (Limerick City, Fine Gael)
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I was disappointed that PIMCO had withdrawn because I had been briefed on the basis that things were going well and there could be a sale of the portfolio. I explained the reasons to the Deputy earlier. We were after coming out of the bailout at the very end of 2013 - this was March 2014 - and a lot of advice I got from eminent people was that we needed a precautionary programme to ensure access to the market. The rating agencies had told NAMA, together with others present at the meeting, that the contingent liability of NAMA was a drag on our ratings and we would not get investment grade. The European Central Bank, ECB, was constantly urging NAMA to sell assets so that it could redeem the bonds to take pressure off the Irish banks. Of course I had concerns about it but I did not know anything about anything to do with this. I never met Mr. Cushnahan, who was recommended by the Minister, Sammy Wilson, to the late Brian Lenihan, and was appointed by the board of NAMA to its advisory committee. The board of NAMA reappointed Mr. Cushnahan in my period of office. Again, I was told that it was reappointing him but I did not know anything that would cause me to object. As far as I was concerned, at the point of reappointment, he was a satisfactory member of the Northern Ireland advisory committee.

Catherine Murphy (Kildare North, Social Democrats)
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The Minister referred to the European Central Bank. Did the ECB put pressure on NAMA to accelerate the sale of the assets or the loan book? At that point, did it intersect in any way with the timing that Project Eagle was going through?

Did the compression of the timeline, from the original date of 2020 to 2018, have an impact at that point in the sales process?

Michael Noonan (Limerick City, Fine Gael)
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The ECB was putting on pressure but it was not putting pressure on us about Project Eagle. Even if one looks at the draft of the Act, it is mentioned twice that NAMA should dispose of the assets expeditiously. There was no question of the ECB or the troika underlining a situation where loan books could be worked out to 2020. The troika wanted expeditious disposal of the assets to take the contingent liability off the Irish balance sheet and to improve the Irish banks' position. There is no secret about that. That happened at the troika meetings on several occasions.

The rating agencies were involved. In order that Ireland would be able to access the market, we needed to have the status of investment grade. We have broker commentary by the end of the 2014 that all the major rating agencies had classified the Irish sovereign as investment grade and explicitly referenced NAMA's progress to date in their decision to do so. I can quote from the rating agencies where they specifically referenced NAMA and the reduction in contingent liability as the reason for upgrading the Irish sovereign to investment grade. One can see what the rating agencies, Standard & Poors, Moody's, DBRS and others said about Ireland. Standard & Poors said, "Ireland's net general Government debt could reduce faster than we currently expect if NAMA monetises its loan assets more rapidly, resulting in either repayment of its obligation or further accumulation of cash." NAMA would have been in constant contact with the rating agencies. The head of the National Treasury Management Agency, NTMA, is on the board of NAMA. There is no doubt that was a factor, but in my view we would be going down a cul de sac if we were to say there was political pressure from Northern Ireland or from the South. The pressure was not political but from the troika for the reasons I have outlined and from the rating agencies. It was very good advice from the rating agencies.

At the end of the previous session, I noted the Comptroller and Auditor General said that the option of working out the loan books to 2020 was an option. It was not. From attending troika meetings or listening to the ECB or the rating agencies, one would know that they wanted NAMA to fulfil its mandate and dispose of its assets expeditiously. Nobody in Northern Ireland on any side of the political divide ever said anything to me that could have been assumed to put political pressure on me or on NAMA to do anything other than dispose of the assets in an orderly fashion and get best value for the Irish Exchequer and relieve the burden on the economy of Northern Ireland from having so many significant people involved in impaired loans and not able to play their previous role in the development of the Northern Ireland economy.

Seán Fleming (Laois, Fianna Fail)
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Will the Minister arrange to have forwarded documentation on the comments made on this at their quarterly meetings by the troika, the IMF, the European Commission, the European Central Bank? Ireland left the troika without a safety net. For the record will he arrange to have a summary of these forwarded to the committee?

Ms Ann Nolan:

I can say from personal experience because I was at most of those meetings for all of the period during the programme and post-programme monitoring, that the ECB and the other troika partners were very anxious, for the reasons the Minister has outlined, to see the NAMA contingent liability reduced, and we will forward the documentation on that to the committee.

Michael Noonan (Limerick City, Fine Gael)
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May I make a final comment? This was not focused on Project Eagle.

Seán Fleming (Laois, Fianna Fail)
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I accept that.

Michael Noonan (Limerick City, Fine Gael)
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It was across the portfolio of more than €30 billion and it wanted the bonds paid off.

Seán Fleming (Laois, Fianna Fail)
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We understand the context, that we were exiting the troika at that time.

Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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Chairman, is it in order to direct questions to the officials arising from some of the answers they have given?

Seán Fleming (Laois, Fianna Fail)
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You should put the question and the Minister will decide who will answer it.

Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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Ms Nolan mentioned that at a meeting that took place with the Comptroller and Auditor General she raised a concern about the 5% discount and the fact the Office of the Comptroller and Auditor General had no expertise in this area. Were representatives from NAMA at that meeting?

Ms Ann Nolan:

It was not I but Mr. Reid who was at the meeting.

Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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Was it Mr. Reid and officials from the Office of the Comptroller and Auditor General?

Mr. Declan Reid:

There were some colleagues from the Department of Finance with me.

Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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Is it safe to assume that the position of the Department of Finance would mirror that of NAMA rather than that of the Comptroller and Auditor General?

Mr. Declan Reid:

May I clarify the concern that Ms Nolan raised at the beginning? The discussion was less about the discount rate per se but more about the appropriateness of the process.

Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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We will discuss the process in a minute. Will Ms Nolan answer my question?

Ms Ann Nolan:

There is an underlying theme in the report that the alternative was to work out the loans until 2020. If I were to look at it from a policy point of view, I did not think that was an option given the difficulties there were in terms of the NAMA bonds, the ECB and the pressure we were under to reduce the debt. Just as we came out of the programme in January to March 2014, I do not think it was an option for us to decide not to sell a really large portfolio purely on the grounds that we might or might not get more money. We had to set a value and decide whether it was value for money. That is what NAMA did.

Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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Is that a "yes"?

Ms Ann Nolan:

Close to it.

Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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I think it is. I feel I established from the questions I put to NAMA that in terms of the process it followed in preparation for this sale, it put its agent in place, having designed the process, and prescribed how the process would proceed. We also established last week the typical process that NAMA would follow when it was selling property. I used an example of selling ten houses in Westmeath and outlined that the typical process would be to source three valuations and three sales proposals from three different sources and that would then inform the decision. This would take place at the point of sale or point of appointment of an agent. Would it be a cause of concern to the Minister if he were to learn that following the presentations last week, the Committee of Public Accounts established that no current valuations were sought or provided to inform this decision by NAMA other than stock valuations that were on file from a date in the past?

Michael Noonan (Limerick City, Fine Gael)
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I would not have any knowledge of commercial decisions made by NAMA in terms of valuation.

Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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I appreciate that. I am only informing the Minister of what went on last week. We established last week that if we were selling two or three bed semi-detached houses in Limerick for a small developer in the Minister's constituency for €200,000, three valuations would have to be provided to go into NAMA. NAMA would assess the valuations and pick the one it thought best and typically would add a sweetener. That is how it would determine the sale price. Would it be a cause of concern that this did not happen when it came to the largest property transaction in the history of the State?

Michael Noonan (Limerick City, Fine Gael)
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I have a limited knowledge of the property market. The value of any property is what a willing buyer is prepared to pay for it on a given day. It seems bringing in third parties to value property in advance of sale does not decide the price.

Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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Why do we have this process for selling two and three bed houses?

Michael Noonan (Limerick City, Fine Gael)
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Wait a second. Let me finish.

Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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With respect, the Minister is a wily old fox at talking down the clock. I am a valuer and I know a little about it. The point is that if we are willing to seek valuations for less valuable assets, why would we not do it for the largest property transaction in the history of the State? Is it a case when properties are bundled together, it is a case of whatever somebody is prepared to pay?

Michael Noonan (Limerick City, Fine Gael)
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It is a matter for NAMA and the officials who have expertise in this area.

Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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Would it be a surprise? I was eight years of age when Deputy Noonan was appointed Minister for Finance for the first time. From his experience, does he agree that to require valuations for the sale of a three bed semi in Limerick and not to bother to get a valuation for the sale of €1.6 billion worth of assets is at best unwise?

Michael Noonan (Limerick City, Fine Gael)
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The point I was trying to make is that - in the Deputy's experience as a valuer - the valuation one puts on a three-bed semi detached house in Sligo does not decide the price. It is an indicator to the vendor of what price to accept, but the market decides the price. I do not know why NAMA did not value properties individually. There were many of them there. I do not know the answer. The Deputy should ask NAMA. The absence of a valuation did not change what one would get on the market, it changed the assessment of whether the best price was achieved. Is that not right, from the Deputy's experience?

Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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The Minister's logic is that we should save the money it costs to run the National Valuation Office in view of the fact that the market is going to pay what it is going to pay. Why bother trying to value anything? Is the Minister content with and confident in the independence of the NAMA board?

Michael Noonan (Limerick City, Fine Gael)
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Yes.

Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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Would it surprise him to know there have been two vacancies on the board for more than two years?

Michael Noonan (Limerick City, Fine Gael)
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There are vacancies on boards at many times. NAMA has sufficient for the purposes of-----

Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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Bearing in mind section 2 of the Act on the interests of taxpayers, does the Minister not feel that they, as the ultimate shareholders in NAMA, are entitled to have maximum representation on the board as it undertakes works such as the disposal of €1.6 billion worth of assets?

Michael Noonan (Limerick City, Fine Gael)
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No, as long as I have the range of competencies across the board, it seems to be sufficient.

Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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Is it okay that NAMA has operated below the number designated by the Act?

Michael Noonan (Limerick City, Fine Gael)
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It is difficult to get people for a board such as NAMA's and I would not fill it with a makeweight appointment.

Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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Frank Daly came before many committees when he was chairman of the Revenue. Mr. Daly is always precise, very specific and to the point. Last week, he made a peculiar statement and sounded much more diplomatic and political than we have ever heard from him before. He said the board of NAMA decided to listen to the wishes of both Governments. What were the wishes of the Irish Government, as put to Frank Daly, to which he referred last week?

Michael Noonan (Limerick City, Fine Gael)
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I do not know what the context is. One of my wishes was that NAMA would transfer houses to the local authorities for social housing. Another was that it would build 20,000 houses. Another of my wishes was that-----

Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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It has nothing to do with that. We are obviously talking about Project Eagle.

Michael Noonan (Limerick City, Fine Gael)
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The Deputy is throwing it up in the air with no context. I do not know what he is saying.

Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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The context today is, very specifically, Project Eagle. Last week, I questioned Frank Daly on it and he said he did not operate in a bubble but had to be cognisant of the situation in Northern Ireland. Would there have been contact with the Minister, the then Prime Minister, David Cameron, and President Obama when it came to the disposal of assets in London or New York?

Michael Noonan (Limerick City, Fine Gael)
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My advice from my officials is that the Deputy is misquoting Frank Daly and that he did not say that at all.

Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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Is Frank Daly's statement available to us?

Seán Fleming (Laois, Fianna Fail)
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Was it in his opening statement?

Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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It was in his opening statement. He specifically said the board had decided to listen to the wishes of both Governments. I am interested to know-----

Mary Lou McDonald (Dublin Central, Sinn Fein)
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For the record, it is on page 2 of his statement. It is slightly nuanced, but he said, "NAMA was willing to consider the wishes of the two governments on the sales process because it was our view that the appropriate sales process for Project Eagle commercially was a targeted one that focused on key investors", and so on. I will see if there is another reference.

Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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So I was not misquoting.

Michael Noonan (Limerick City, Fine Gael)
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The Deputy will have to ask Frank Daly. It seems to me he may have been referring to the document Sammy Wilson forwarded to me saying the PIMCO was available to buy the whole portfolio and that this was an expression of at least the wishes of the Northern Ireland Minister of Finance on how Project Eagle should be disposed of. Maybe that is what he was referring to. I do not know. The Deputy will have to ask him when he comes before the committee again.

Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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Indeed. Would it concern the Minister that NAMA was selective in the information it provided to Lazard in seeking the expert advice to which the Minister referred in terms of the fact that it did not inform Lazard of a fixer's fee intended for Mr. Cushnahan.

Michael Noonan (Limerick City, Fine Gael)
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I have no knowledge of it. Again, it is a question for NAMA.

Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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In the Minister's experience, would he have a comment? Would he say that it seems a bit strange, that he would not be entirely happy with it or that he is totally happy with it?

Michael Noonan (Limerick City, Fine Gael)
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It is the only time I have come across a fixer's fee, so my experience in the area does not throw any light on it.

Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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Based on the Minister's first experience, what is his view?

Michael Noonan (Limerick City, Fine Gael)
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I do not have a view because I do not know the circumstances. It is a matter for NAMA.

Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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So it is perfectly okay.

Michael Noonan (Limerick City, Fine Gael)
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No, do not answer for me; just ask questions.

Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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Indeed, I am trying to get answers, but I am not getting them.

Michael Noonan (Limerick City, Fine Gael)
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Then the Deputy is providing the answers himself.

Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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No, I have to conclude-----

Michael Noonan (Limerick City, Fine Gael)
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Ah no.

Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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In the absence of an answer, we have to go with what the balance of probability points to. The balance of probability is that the Minister does not have a view.

Michael Noonan (Limerick City, Fine Gael)
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No, the balance of probability is not that at all. I do not have a legal function.

Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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The legal teams of PIMCO switched to Cerberus, as is now known. At what point were the Department or the Minister made aware of it?

Michael Noonan (Limerick City, Fine Gael)
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I do not know when the Department was made aware of it. I was not cognisant of it until very recently.

Mr. Declan Reid:

It was after the completion.

Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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After the fact. Would we have a view on it?

Mr. Declan Reid:

In my experience, it is not unusual for advisers who have spent much time and money advising one party which has exited from a process to try to switch horses. It does not surprise me that PIMCO would attempt to get another client.

Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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Would NAMA have sought letters of comfort?

Mr. Declan Reid:

We heard from NAMA last week that it sought such letters from Cerberus to help give it some comfort that those fees would not be payable to any NAMA executive or non-executive.

Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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Did NAMA provide the Department with any proof of competitive tension in the sales process after PIMCO's exit from the process?

Mr. Declan Reid:

Given that the commercial decision was for NAMA, it was not NAMA's responsibility to demonstrate to the Department that there was competitive tension in the process.

Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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Was any correspondence sent to the Department of Finance or the Minister, at the time or since, by any entity either to complain or to highlight that it felt aggrieved about being excluded from the process or not being able to get into the process or about how the process was run?

Mr. Declan Reid:

Not to my knowledge.

Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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Would the Department be aware that Fortress has retained Slaughter and May, a London law firm, to examine the process and purchase by Cerberus?

Mr. Declan Reid:

No.

Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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Is it a concern for the State that we could face legal action regarding how the process was carried out?

Ms Ann Nolan:

It is always a concern for the State if we are facing legal action in any area. We are not aware of any such legal action.

Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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I am sure the Minister will agree that the complexion of all this, from a taxpayer's perspective, is very grubby.

Michael Noonan (Limerick City, Fine Gael)
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I do not agree with that at all.

Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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Fair enough. That is the Minister's position. I am only a humble taxpayer on this side listening to what I am hearing from people. Does the Minister feel section 10 of the National Asset Management Agency Act was undermined by the diplomatic concerns coming from Northern Ireland?

Michael Noonan (Limerick City, Fine Gael)
Link to this: Individually | In context | Oireachtas source

Does the Deputy mean the independence of NAMA?

Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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No, section 10 relates to achieving the maximum return for the taxpayer.

Michael Noonan (Limerick City, Fine Gael)
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Can we have section 10 displayed on the screen?

Josepha Madigan (Dublin Rathdown, Fine Gael)
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Section 10 is about the purpose and about dealing expeditiously with the assets, not about value for money.

Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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Perhaps it is section 14. On value for money and the maximum return for the taxpayer, which is also mentioned in section 2, does the Minister feel that the involvement of Northern Ireland's diplomatic concerns undermined the potential for the return for taxpayers on this side of the Border to be maximised?

Michael Noonan (Limerick City, Fine Gael)
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Is the Deputy saying that the concern expressed by the Northern Executive reduced the price available?

Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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No, I am concerned because of what Frank Daly said last week in the context of listening to the wishes of both Governments and the fact that there was some input from there to hasten the process, which may have undermined the potential for the taxpayer, the ultimate shareholder in NAMA, to maximise the return.

Michael Noonan (Limerick City, Fine Gael)
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The Ministers I met were Sammy Wilson, Simon Hamilton, the then First Minister, Peter Robinson, and the deputy First Minister, Martin McGuinness.

I would have been present at meetings of the North-South body where Ministers from all political parties were present.

NAMA was always an agenda item. Sometimes it would be just a couple of sentences; other times, a discussion. No one ever attempted to put political pressure on me. Frank Daly says the same. No political pressure was put on him either by Sinn Féin or the DUP, which were the principal participants in government. The answer to the question is that nothing that the Northern Ireland politicians did in my mind contributed to reducing the price. There is a difference of opinion between NAMA and the Comptroller and Auditor General’s office. That difference of opinion on price has not been resolved. We would be hoping that the committee’s deliberations would help to resolve it.

Seán Fleming (Laois, Fianna Fail)
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I call Deputy David Cullinane.

David Cullinane (Waterford, Sinn Fein)
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The Minister, along with the witnesses from the Department, are very welcome to the committee.

The problem is there is a report from the Comptroller and Auditor General which is serious in some respects in which it finds there were certainly issues within the process. If the Minister read the executive summary, he would see many concerns have been expressed by the Comptroller and Auditor General’s office. Then there is a diametrically opposite view from NAMA. The Minister referred to that himself where there are different opinions and that he has confidence in both organisations, which is welcome.

We had some discussion earlier about the 5% or 10% discount rate and differences of opinion between the Department and the Comptroller and Auditor General’s office. Are there any elements of the Comptroller and Auditor General’s report with which the Minister or his officials do not agree?

Michael Noonan (Limerick City, Fine Gael)
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It is not a question of agreement or disagreement. There are two conflicting views. The central issue for me is that on all occasions in NAMA transactions, the taxpayer would recover the maximum amount of money.

I watched the evidence from the Comptroller and Auditor General, Mr. Frank Daly and the committee’s questions. There seems to me to be an unresolved issue about what the appropriate discount rate should be. There also seems to me to be an issue about process. There seems to be-----

David Cullinane (Waterford, Sinn Fein)
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We know what the differences are. With respect, this could be talking down the clock. We have already heard from Mr. Declan Reid and Ms Ann Nolan that there was a difference of opinion. There was an exchange between the Department of Finance and the Comptroller and Auditor General’s office. There was a difference on the process and the 5% or 10% discount rate. Are there any other areas in the Comptroller and Auditor General’s report with which the Department takes issue? I am accepting there are differences between NAMA and the Comptroller and Auditor General. I am asking about the Department and the Minister specifically.

Michael Noonan (Limerick City, Fine Gael)
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My personal view is that the work the committee is undertaking is primarily to see if it can resolve the issue and get to an agreed view. Ms Ann Nolan, Second Secretary General, can give the Department’s view.

Ms Ann Nolan:

First, there is an awful lot of very useful information in the Comptroller and Auditor General’s report. When we wrote to the Comptroller and Auditor General on the issues of the process which he had taken, our question was whether the Comptroller and Auditor General’s office had spoken to the NAMA board itself. I note the committee will interview the NAMA board. To some extent, that meets my concerns in that area.

There was also a question of whether the Comptroller and Auditor General’s office had spoken to Lazard directly, rather than just looking at the paper issues. Those were the two main issues that were outstanding at the end of the process.

Earlier, we touched on the fact that Mr. Daly made reference to the robust exchanges between our Department and the Comptroller and Auditor General’s office. I have been involved in many value-for-money reports over quite a long number of years - more than I care to remember - with the Comptroller and Auditor General’s office and with both current and previous staff there. There are frequently, at various points, robust exchanges between sponsoring Departments, agencies and the Comptroller and Auditor General’s office. By and large, most of those exchanges end up with an agreed report. The bulk of this report stands on its own merits and has no issues on which I have discussions.

David Cullinane (Waterford, Sinn Fein)
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Does Ms Nolan agree the report stands on its own merits? Does she have a difficulty with anything in it?

Ms Ann Nolan:

I am not saying I agree with everything that is in the report. It is a perfectly valid report.

David Cullinane (Waterford, Sinn Fein)
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That is why I asked about what she does not agree with in the report.

Ms Ann Nolan:

The policy question-----

David Cullinane (Waterford, Sinn Fein)
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If Ms Nolan does not agree with everything, she disagrees with something. What is it that she disagrees with?

Ms Ann Nolan:

I have already said that I have an issue with the underlying assumption that the alternative was to work these assets out to 2020 and sell everything then. That was not an option, given the pressure we were under at the time to reduce NAMA’s liabilities. That does not say that this particular sale was right or wrong. That is just a general policy question.

David Cullinane (Waterford, Sinn Fein)
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Mr. Declan Reid prepared a briefing pack for the Minister and officials in the Department on 11 July 2015. Did he have any meetings with NAMA specifically on the preparation of this briefing pack?

Mr. Declan Reid:

Not specifically in relation to the preparation of the briefing pack.

David Cullinane (Waterford, Sinn Fein)
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Did Mr. Declan Reid speak to NAMA at all prior to putting together the pack?

Mr. Declan Reid:

I would have had regular meetings with NAMA on a range of issues, which would include gathering knowledge. We understood what-----

David Cullinane (Waterford, Sinn Fein)
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Would Mr. Declan Reid have sought information from NAMA in respect of preparing this briefing pack?

Mr. Declan Reid:

Yes.

David Cullinane (Waterford, Sinn Fein)
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However, he did not formally meet NAMA.

Mr. Declan Reid:

No, I formally meet NAMA all the time.

David Cullinane (Waterford, Sinn Fein)
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As part of this process, when putting together this briefing document, did Mr. Declan Reid have any face-to-face meetings with NAMA?

Mr. Declan Reid:

It would have been part of a general engagement.

David Cullinane (Waterford, Sinn Fein)
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The briefing pack stated the Comptroller and Auditor General’s office was best positioned to independently review the Project Eagle sale and make its determination. It has made its determination and that is why it is important to see were the Department and the Minister accepting the determination of the report. We have dealt with that.

On the power of NAMA, the Minister said it is not his role to direct NAMA or influence it. He said NAMA is fully independent.

Michael Noonan (Limerick City, Fine Gael)
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I did not say that.

David Cullinane (Waterford, Sinn Fein)
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The Minister talked about NAMA’s independence and mandate. The Minister has a role in influence, maybe. He certainly has a role in-----

Michael Noonan (Limerick City, Fine Gael)
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No. I have specific power to direct, in so far as the purposes of the Act are concerned.

David Cullinane (Waterford, Sinn Fein)
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What power does that give the Minister?

Michael Noonan (Limerick City, Fine Gael)
Link to this: Individually | In context | Oireachtas source

I am excluded from giving any direction to NAMA on commercial matters. That is where the line is drawn.

David Cullinane (Waterford, Sinn Fein)
Link to this: Individually | In context | Oireachtas source

Did the Minister ever give a direction to NAMA to speed up the sale of assets?

Michael Noonan (Limerick City, Fine Gael)
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No and neither did my predecessor. The last direction I issued to NAMA was when negative interest rates came in across Europe and NAMA was unable to carry out its business as originally intended.

David Cullinane (Waterford, Sinn Fein)
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The Minister never asked NAMA to speed up a sale.

Michael Noonan (Limerick City, Fine Gael)
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No. Will the Deputy wait until I finish?

When negative interest rates came in across Europe, I issued a directive to NAMA to enable it to change the interest rate basis and introduce a zero-rate interest rate. We can give the Deputy a note on that. That is the kind of primary policy position on which I and my predecessor, Brian Lenihan, issued directions. I understand there have been six directions since the NAMA Act came in.

David Cullinane (Waterford, Sinn Fein)
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In response to a parliamentary question on 25 March-----

Michael Noonan (Limerick City, Fine Gael)
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The directions are laid before the House.

David Cullinane (Waterford, Sinn Fein)
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I accept that.

The Minister responded to a parliamentary question on 25 March 2014. In it he stated, "I have asked NAMA to evaluate their disposal timing and strategy in the context of current market demand and explore the advantages and disadvantages of accelerating its disposal strategy". A report in the Irish Independenton 19 February 2014 stated:

Mr. Noonan told reporters he had instructed senior NAMA officials to look at the various to look at the various options, but he said no decisions had yet been taken.

"But when I come around to making decisions, I want the decisions to be evidence-based," [the Minister said.] ... "I want them to explore the implications of bringing forward the sale, because the market would be able to carry a big sale at this point."

Would the Minister contradict that?

Michael Noonan (Limerick City, Fine Gael)
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No, but, as I replied to Deputy Catherine Murphy, the context is the same. We had got out of the bailout at the end of 2013. We were strongly advised to have a precautionary programme or we would not get into the market.

David Cullinane (Waterford, Sinn Fein)
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Did the Minister advise NAMA to accelerate the sale of properties?

Michael Noonan (Limerick City, Fine Gael)
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No, I think I am entitled to finish the point.

I was very conscious that there was a risk of getting out of the bailout programme without a precautionary programme.

Getting out of the bailout meant getting money on the markets at reasonable interest rates. That is what the issue was and I was advised by a lot of people but I decided, on the balance of advantage, that it was better to get out of the precautionary programme. I was conscious that the ECB in particular, the European Commission and the rating agencies who would decide whether we would have access to the markets, were constantly referencing the contingent liability of NAMA bonds on the State balance sheet, because we had guaranteed them. As a result of that, from a policy point of view I was interested to see if the NAMA bonds could be redeemed at a faster rate. The only thing that could redeem them was the sale of assets to provide the cash to NAMA to redeem the bonds. That was my policy perspective but I did not direct them, I asked for their advice. The advice I was seeking was whether the market would take it and whether we would still get best value for the taxpayer. That was the area I was-----

David Cullinane (Waterford, Sinn Fein)
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People could put different interpretations on that. If the Minister gave advice, if he had a conversation with them, people could see that differently, they could see that conversation as being around speeding up the sale of assets. Whether NAMA took on that advice -----

Michael Noonan (Limerick City, Fine Gael)
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Of course it was around speeding up the sale of assets if that was the appropriate thing to do.

David Cullinane (Waterford, Sinn Fein)
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That is the question I asked the Minister earlier -----

Michael Noonan (Limerick City, Fine Gael)
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If that was the appropriate thing to do -----

David Cullinane (Waterford, Sinn Fein)
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That is the precise question I asked the Minister earlier. I asked him if he gave advice to NAMA to speed up the sale of assets.

Michael Noonan (Limerick City, Fine Gael)
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I did not direct them. I asked for their advice.

David Cullinane (Waterford, Sinn Fein)
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That is semantics.

Michael Noonan (Limerick City, Fine Gael)
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It is not semantics. This is a real policy issue, namely whether we could source money on the markets or not and what we could do to improve Ireland's credit rating so that we could source that money. The advice from the rating agencies and the ECB was to reduce the contingent liability of the NAMA bonds on the State balance sheet.

David Cullinane (Waterford, Sinn Fein)
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The Minister talked earlier -----

Michael Noonan (Limerick City, Fine Gael)
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I am entitled, as Minister for Finance, to have a view on policy and to take the advice of any agency I can source.

David Cullinane (Waterford, Sinn Fein)
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The Minister has given his view on that. He talked earlier about the sales process and he referenced a conference call that took place between the Deputy First Minister, the First Minister and himself. I do not know if others were involved in that conference call. The call related to the sales process. He then said that he made it very clear that this had to be a fully competitive and open process. Is that correct?

Michael Noonan (Limerick City, Fine Gael)
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On all occasions -----

David Cullinane (Waterford, Sinn Fein)
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On all occasions the Minister was very clear that this had to be a fully competitive and open process. Mr. Frank Daly was here last week and he said: "There was a concern that a fully open sales process, which would by its nature take longer to conduct, would freeze activity in the Northern Ireland market for a period of nine to 12 months". He then went on to say that NAMA "did not believe that a fully open sales process would yield any additional benefit in terms of identifying other credible bidders". He conceded, in the context of one of the criticisms of the Comptroller and Auditor General regarding restrictions of marketing, that bidders had concerns that this was not a fully open and competitive process. Mr. Daly, the Chairman of NAMA, said that the agency "did not believe that a fully open sales process would yield any additional benefit". He added that NAMA was "very cognisant of the [political] damage that a fully open process could cause". How does that square with the direction or view that the Minister gave or the conversation he had in that conference call, that this had to be a fully open and competitive process?

Michael Noonan (Limerick City, Fine Gael)
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I am not quite sure what point the Deputy is putting to me but I would refer him to the minutes of the phone call, which read as follows:

At that meeting First Minister Robinson expressed the importance of any sales process to the Northern Ireland economy and in particular the impact on Northern Ireland of an acquirer's asset management development and general strategy, post-acquisition.

I am quoting that to show that there was concern at Northern Ireland Executive level about what the impaired assets in Northern Ireland and their disposal might mean in terms of any potential influence on the Northern Ireland economy.

The minutes go on:

The Minister [that is me] confirmed that NAMA would be a willing seller of its Northern Ireland assets at an appropriate price, having undertaken an appropriate sales process.

That is back-referencing what I told the Deputy just a minute ago.

The minutes go on to say that I explained that NAMA avoids bilateral sales processes. Such a process was suggested by Mr. Sammy Wilson MLA previously to me, by way of a letter. The minutes go on to say that bilateral sales processes have not been conducive to achieving best value, which is one of NAMA's primary objectives-----

David Cullinane (Waterford, Sinn Fein)
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Minister, with respect-----

Michael Noonan (Limerick City, Fine Gael)
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The Deputy has the document and -----

David Cullinane (Waterford, Sinn Fein)
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I am aware of the Minister's position and he said earlier, in his opening remarks and in response to a question, that he made it very clear that this should be a fully competitive and open process. We have a report from the Comptroller and Auditor General which cites concerns that he had as to whether the process was competitive. More than that, however, and this is what the Minister is avoiding, Mr. Frank Daly said last week, conceded indeed, that this was not a fully open sales process and went on to justify why it was not thus. He said that NAMA "did not believe that a fully open sales process would yield any additional benefit" and that the agency was "very cognisant of the [political] damage that a fully open process could cause". While the Minister might have had a view that this should be a fully open process, is he concerned that Mr. Daly conceded last week -----

Seán Fleming (Laois, Fianna Fail)
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This is the Deputy's last question.

David Cullinane (Waterford, Sinn Fein)
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I have one more question after this one.

Seán Fleming (Laois, Fianna Fail)
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The Deputy should put both question now and be very quick. His time is up. Please put the two questions to the Minister now.

David Cullinane (Waterford, Sinn Fein)
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I just wanted to deal with the differences of opinion between PIMCO and NAMA in relation to -----

Seán Fleming (Laois, Fianna Fail)
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I am sorry, we are five minutes over time already. The Deputy will be allowed back in again.

David Cullinane (Waterford, Sinn Fein)
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Okay, I will come back to that later. I ask the Minister to respond to the point I was making about Mr. Daly's contribution.

Michael Noonan (Limerick City, Fine Gael)
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My understanding from Mr. Daly's contribution was that he was defending a position of not having a totally new sales process once PIMCO withdrew and not re-advertising and starting from scratch. That was my understanding of it. Mr. Daly also said that all credible bidders were considered in the process, so it seems to me that there was sufficient competitive tension in the competitive process that remained after PIMCO withdrew. I do not see a contradiction. Mr. Carville wishes to make a comment.

Mr. Des Carville:

To back up what the Minister has just said, and this was covered by NAMA previously too, nine bidders were invited into the process. When NAMA did an analysis of bidders in the commercial real estate market in Europe from 2013 to 2015 that would have undertaken loan transactions in excess of €1 billion, those nine bidders accounted for 88% in European terms and 92% in UK and Irish terms. Certainly, in terms of the universe of potential bidders, the universe was covered.

David Cullinane (Waterford, Sinn Fein)
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Regardless of the number of bidders in the process -----

Seán Fleming (Laois, Fianna Fail)
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I am sorry, I am calling Deputy Farrell now.

David Cullinane (Waterford, Sinn Fein)
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Regardless of the number of bidders that were in the process, the Minister is not accepting what Mr. Daly said last week, when he said that he did not believe that this was a fully open process. If those are his words, and I have quoted what he said four times, then it does not matter how many bidders were in the process. He said that this was not a fully open process and that NAMA was "very cognisant of the [political] damage that a fully open process could cause".

Seán Fleming (Laois, Fianna Fail)
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Deputy Cullinane, we will put that question to Mr. Daly. We will ask him for his definition of "open process", whether it meant an advertisement in a newspaper or something more. Mr. Daly will answer what he meant by his words. I am moving on to Deputy Farrell and we can come back to Deputy Cullinane later.

Just for the benefit of other members, Deputies have indicated in the following sequence: Deputy Alan Farrell, Deputy Mary Lou McDonald, Deputy Shane Cassells, Deputy Josepha Madigan, Deputy Catherine Connolly and Deputy Peter Burke. If we need to take a break at some stage we will do so.

Alan Farrell (Dublin Fingal, Fine Gael)
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I thank the Minister and his officials for coming before us. Notwithstanding what the Chairman has just said regarding the comments of Mr. Daly, the Chairman of NAMA, I have an observation to make about that line of questioning from Deputy Cullinane. My understanding is that NAMA is obliged to run a competitive process under the NAMA Act and if that is the case, would that not in fact be contrary to its own requirements? I appreciate that there were nine bidders, as Mr. Carville has pointed out. He has given the percentages and it is clear that they were some of the better bidders out there but, taking on board what was said and the fact that there is an obligation on NAMA under the Act - I cannot recall the exact section, but I think it was Part 7 - to ensure the best result for the taxpayer, then that would include -----

Ms Ann Nolan:

First of all, I do not think there is anything in the Act about process, other than that the board of NAMA has the right to decide on whatever process it likes. There is a requirement that the agency gets best value for money but that is separate. The Act does not say anything about a fully open process, a half open process or any other kind of process. It says that the board sets down the process.

That is what the Act states on that point.

In terms of getting value for money, one can get very pedantic on what constitutes a fully open process. As the Chairman said, that is probably a question for Mr. Frank Daly. From the point of view of the Department, it is more important to have a competitive process with the maximum number of credible bidders than to have advertised it, etc. In reality, it is entirely a matter for the board, as set out in the Act.

Alan Farrell (Dublin Fingal, Fine Gael)
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I thank Ms Nolan. I would like to ask the Minister about something that has not been raised today. After this process began when issues were mentioned in Northern Ireland, the position he maintained for a period of months, if not years, was that a commission of inquiry was not required. Why has he changed his position in that regard?

Michael Noonan (Limerick City, Fine Gael)
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I set out my position when this matter was debated in the Dáil in June. As I said, I have full confidence in the Comptroller and Auditor General and his office. I have great respect for them. The Comptroller and Auditor General was conducting a value for money report. I would have thought that in the normal course of events, the report would be discussed by the Committee of Public Accounts, but that is not what is happening. It would have been inappropriate for me to suggest to the Cabinet that a commission of inquiry be put in place, but I said-----

Alan Farrell (Dublin Fingal, Fine Gael)
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I was of the view that the Minister had said he was not inclined-----

Michael Noonan (Limerick City, Fine Gael)
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I was not inclined either, but I thought I said in the course of the debate-----

Alan Farrell (Dublin Fingal, Fine Gael)
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That would be contrary to what the Minister has just said.

Michael Noonan (Limerick City, Fine Gael)
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-----that we could return to the position as issues evolved. What I am saying is I did not rule it out absolutely. If I had decided to go to the Government and advise the Taoiseach and other Ministers to have a commission of inquiry, I presume the Deputy would have been telling me that I was interfering with the legitimate role of the Comptroller and Auditor General and the Committee of Public Accounts. It would have been suggested I was trying to forestall the discussion we are having today by kicking it into touch for several years, which is how long some commissions last.

Alan Farrell (Dublin Fingal, Fine Gael)
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Have the Minister and his officials spoken to NAMA or any of its officials or representatives about the report since it was issued by the Comptroller and Auditor General? If so, what was the nature of those meetings?

Michael Noonan (Limerick City, Fine Gael)
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I have not spoken to anyone from NAMA since the report was issued, but I assume my officials have done so. I ask Ms Nolan to clarify the position.

Ms Ann Nolan:

Yes, we have ongoing daily contact with NAMA.

Alan Farrell (Dublin Fingal, Fine Gael)
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Did the contact relate specifically to the report?

Ms Ann Nolan:

Among other things, yes.

Alan Farrell (Dublin Fingal, Fine Gael)
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What was the nature of the discussions?

Ms Ann Nolan:

NAMA probably gave us copies of its representatives' opening statements in advance of their appearance before the committee last week. I think we gave NAMA an advance copy of our opening statement at some point this morning. I had brief personal discussions with Mr. Frank Daly about a number of things. It was mentioned that this issue was ongoing and that he would be here. We did not speak in great detail.

Michael Noonan (Limerick City, Fine Gael)
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The Deputy will recall that the chairman, Mr. Daly, wrote a lengthy letter to me which coincided with publication of the report. The effect of the letter was to express NAMA's disagreement with the Comptroller and Auditor General's report in certain respects. It was published around the same time as the Comptroller and Auditor General's report. I did have contact in the sense that he wrote me this extensive letter.

Alan Farrell (Dublin Fingal, Fine Gael)
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Were there other conversations, e-mails or discussions about the specifics of the Comptroller and Auditor General's report?

Mr. Declan Reid:

As the Deputy can imagine, as part of our regular engagement, we discussed at our monthly management meetings all of the issues NAMA was facing. This would have been one of those issues and it would have been discussed.

Alan Farrell (Dublin Fingal, Fine Gael)
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NAMA accelerated the process of agreeing to a specific bidder shortly after PIMCO withdrew from the process. My opinion is that at some point in the process NAMA decided that it had its white horse in the form of an acceptable bid, regardless of the terms and conditions associated with it, and simply went through from there. Does the Minister accept this? I appreciate that NAMA has made a point about political concerns. It is a bit strange for a financial institution like NAMA to do this, given that its purpose is to get the best value for money for the taxpayer. Does the Minister accept that there were problems, or at least that there is a perception of a problem, in the way NAMA conducted its business in the latter days of the deal?

Michael Noonan (Limerick City, Fine Gael)
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Obviously, I am conscious of the Comptroller and Auditor General's report and his comments on the process. I am also conscious of the evidence given by the Chairman and the chief executive of NAMA. As I have said on a number of occasions, contrary positions have been taken on a number of matters. I think everybody is hoping the Committee of Public Accounts will help to resolve these disagreements, to put it at its mildest. NAMA was entirely legally entitled to do anything in the sale process. It was not a matter for the Minister to tell it what to do when it was acting in accordance with the Act.

Alan Farrell (Dublin Fingal, Fine Gael)
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I would like to ask another question about the position NAMA adopted and the Comptroller and Auditor General's views on that process. As I said when I asked my second question, the position adopted by the Government is that a commission of investigation will look into Project Eagle. Does the Minister have a view on the difference between Project Arrow and Project Eagle? I refer to the fact that they do not appear to adhere to any of the same basic principles within the two projects. What is the Minister's view?

Michael Noonan (Limerick City, Fine Gael)
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I refer the Deputy back to what I quoted from the Act. The board of NAMA has full legal authority to dispose of assets as it sees fit. It follows from that legal authorisation that it would treat different portfolios and sales differently and would have processes that vary to suit the circumstances of the disposal. NAMA had extensive property in London, Dublin, Northern Ireland, regional areas of the United Kingdom, Germany and other places. I do not think anyone would say it should have adopted the same process in all jurisdictions or for all portfolios. One might have a different view on this - perhaps that of a layman; I would be a layman in this regard - if one was disposing of hotels or building land rather than residential property. The processes would be different.

Alan Farrell (Dublin Fingal, Fine Gael)
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In the tendering process sufficient time was not given and others were not allowed to go off and make evaluations in the first instance. I appreciate that, of course, they are different, but surely, as Deputy Marc MacSharry suggested, there is an element of-----

Michael Noonan (Limerick City, Fine Gael)
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No, but-----

Alan Farrell (Dublin Fingal, Fine Gael)
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There is a point-----

Michael Noonan (Limerick City, Fine Gael)
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In effect, the Deputy is asking me to speak for NAMA and explain-----

Alan Farrell (Dublin Fingal, Fine Gael)
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No, I am asking the Minister if he thinks it was prudent for NAMA to engage in such a process.

Michael Noonan (Limerick City, Fine Gael)
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I think the Deputy's questions should be addressed to NAMA. I cannot look inside the heads of the people in NAMA who decided this was the best way forward, or the board of NAMA. All I can do is examine the record. It seems that it was a credible process, but there are other views.

Mary Lou McDonald (Dublin Central, Sinn Fein)
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Cuirim fáilte roimh gach éinne. The Minister knows the routine. As we have limited time, I will be concise and would appreciate concise answers from the Minister. He has set out accurately NAMA's commercial mandate, responsibilities and prerogatives. I think we can agree that in the final analysis the interests of taxpayers are vested in his office. Can we agree on that point?

Michael Noonan (Limerick City, Fine Gael)
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No. That is concise. The Act states NAMA must get best value for the taxpayer.

Mary Lou McDonald (Dublin Central, Sinn Fein)
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Yes.

Michael Noonan (Limerick City, Fine Gael)
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Obviously, the considerations of the taxpayer are centred in the Act. They are not centred entirely in my office, but I do not have responsibility for them.

Mary Lou McDonald (Dublin Central, Sinn Fein)
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That is NAMA's commercial mandate.

The legislation vests in the Minister an authority and a legal standing, that may not be supervisory on the minutiae of detail day-to-day, as his officials have said but he does have the power to direct.

Michael Noonan (Limerick City, Fine Gael)
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No.

Mary Lou McDonald (Dublin Central, Sinn Fein)
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It is set out in black and white in the Act.

Michael Noonan (Limerick City, Fine Gael)
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That is not what my officials said. What I said was I am specifically excluded, as all committee members are and every other politician, in either jurisdiction, from interfering or advising or influencing the commercial decisions of NAMA.

Mary Lou McDonald (Dublin Central, Sinn Fein)
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Yes, and-----

Michael Noonan (Limerick City, Fine Gael)
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On top of that-----

Mary Lou McDonald (Dublin Central, Sinn Fein)
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Sorry, Minister-----

Michael Noonan (Limerick City, Fine Gael)
Link to this: Individually | In context | Oireachtas source

I agree with the Deputy that I have the power to direct.

Mary Lou McDonald (Dublin Central, Sinn Fein)
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Yes, the Minister has the power to direct. I have acknowledged, to get it out of the way, that he does not have the right to intrude inappropriately on the commercial mandate of NAMA. With respect, the Minister does not have that, we have heard that and that is accepted.

Michael Noonan (Limerick City, Fine Gael)
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No, but I do not have the right to intervene in a way that the Deputy might regard as appropriate either.

Mary Lou McDonald (Dublin Central, Sinn Fein)
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Let me put this to the Minister. The reason that he advanced here for not interfering and not calling a halt to the sale of Project Eagle is that he cites that it would be inappropriate for him to trespass on commercial decisions of NAMA.

Michael Noonan (Limerick City, Fine Gael)
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No.

Mary Lou McDonald (Dublin Central, Sinn Fein)
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That is what the Minister advanced.

Michael Noonan (Limerick City, Fine Gael)
Link to this: Individually | In context | Oireachtas source

That is not my position. I did not use - appropriate is not my view. It would be illegal.

Mary Lou McDonald (Dublin Central, Sinn Fein)
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Stronger still. It would be illegal-----

Michael Noonan (Limerick City, Fine Gael)
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Yes.

Mary Lou McDonald (Dublin Central, Sinn Fein)
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-----for the Minister to trespass on those.

Michael Noonan (Limerick City, Fine Gael)
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That is the way the Act is drafted.

Mary Lou McDonald (Dublin Central, Sinn Fein)
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Yes. When the Minister was informed in March of the fact that fixers' fees, or success fees, were to be paid to Mr. Frank Cushnahan, a former member of the advisory committee, he heard of the difficulties that that caused for PIMCO and so on. I put it to the Minister, at that point the reason for his intervention was not around the commercial mandate of NAMA but was around governance, proper practice and the fact it had become clear that the process had been corrupted. It had nothing to do with him making a commercial call for NAMA but everything to do with him stating the blindingly apparent, that where a former member of that advisory committee was to receive a payment, clearly the process had been corrupted.

Michael Noonan (Limerick City, Fine Gael)
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So what is the question?

Mary Lou McDonald (Dublin Central, Sinn Fein)
Link to this: Individually | In context | Oireachtas source

The question is, why did the Minister not intervene?

Michael Noonan (Limerick City, Fine Gael)
Link to this: Individually | In context | Oireachtas source

I did not intervene because the issues that arose from the payment to Mr. Cushnahan, or the alleged payment to Mr. Cushnahan, were brought to the attention of NAMA by PIMCO, which at that point was the preferred bidder, and PIMCO withdrew from the sale.

Mary Lou McDonald (Dublin Central, Sinn Fein)
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We are familiar with all of that.

Michael Noonan (Limerick City, Fine Gael)
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As far as NAMA was concerned, then that issue was not relevant to the sale subsequently and its advice was, and its decision as a board-----

Mary Lou McDonald (Dublin Central, Sinn Fein)
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We will come to that.

Michael Noonan (Limerick City, Fine Gael)
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Its decision as a board, as we have recited previously, after taking advice from Lazard, was that there was sufficient competitive tension still remaining in the remaining bid-----

Mary Lou McDonald (Dublin Central, Sinn Fein)
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We will come to that, Minister.

Michael Noonan (Limerick City, Fine Gael)
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No, let me finish.

Mary Lou McDonald (Dublin Central, Sinn Fein)
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No. Do not talk down the clock, Minister.

Michael Noonan (Limerick City, Fine Gael)
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In the remaining bidders, which were not involved in any payments to anybody-----

Mary Lou McDonald (Dublin Central, Sinn Fein)
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The Minister has rehearsed all of that. He has made that assertion on the basis - it chimes identically with NAMA and it is very clear. His level of collaboration is very clear here because-----

Michael Noonan (Limerick City, Fine Gael)
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No, when facts match-----

Mary Lou McDonald (Dublin Central, Sinn Fein)
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-----because the Minister regards-----

Michael Noonan (Limerick City, Fine Gael)
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When facts match it is not collaboration.

Mary Lou McDonald (Dublin Central, Sinn Fein)
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We are dealing with facts here.

Michael Noonan (Limerick City, Fine Gael)
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We are dealing with the same set of facts. That is not collaboration.

Mary Lou McDonald (Dublin Central, Sinn Fein)
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The Minister regarded the issue of fixers' fees as simply a matter on the purchaser's side.

Michael Noonan (Limerick City, Fine Gael)
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I did not-----

Mary Lou McDonald (Dublin Central, Sinn Fein)
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I have a note of what the Minister said.

Michael Noonan (Limerick City, Fine Gael)
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What is it?

Mary Lou McDonald (Dublin Central, Sinn Fein)
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The Minister said that the issue of the fixers' fees or success fees, in any event, was an issue on the purchaser's side, not on the seller's side, so it was not a dilemma for NAMA.

Michael Noonan (Limerick City, Fine Gael)
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Is not that correct?

Mary Lou McDonald (Dublin Central, Sinn Fein)
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That is absolutely incorrect.

Michael Noonan (Limerick City, Fine Gael)
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Why?

Mary Lou McDonald (Dublin Central, Sinn Fein)
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For the very reason that Mr. Cushnahan had been on the Northern advisory committee. The very reason that PIMCO blew the whistle and stepped forward was because it was not just a problem for it - it was a problem for NAMA. NAMA has acknowledged that.

Michael Noonan (Limerick City, Fine Gael)
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Yes, but Mr. Wilson recommended to Brian Lenihan-----

Mary Lou McDonald (Dublin Central, Sinn Fein)
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I am not asking about Mr. Wilson.

Michael Noonan (Limerick City, Fine Gael)
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-----the appointment of-----

Mary Lou McDonald (Dublin Central, Sinn Fein)
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Or Mr. Lenihan.

Michael Noonan (Limerick City, Fine Gael)
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Minister Lenihan, the late Brian Lenihan. Sammy Wilson, finance Minister of Northern Ireland, recommended his appointment to the late Brian Lenihan, and he was appointed by the board of NAMA following that recommendation. When I read this subsequently-----

Mary Lou McDonald (Dublin Central, Sinn Fein)
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How is that relevant to the question that I have put to the Minister?

Michael Noonan (Limerick City, Fine Gael)
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It is relevant because when I established the facts of his appointment subsequently, I assumed that Mr. Wilson was not speaking for himself. I understand that under the Good Friday Agreement there must be agreement across the Executive so I assume that-----

Mary Lou McDonald (Dublin Central, Sinn Fein)
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Minister.

Michael Noonan (Limerick City, Fine Gael)
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-----deputy First Minister, Martin McGuinness-----

Mary Lou McDonald (Dublin Central, Sinn Fein)
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Can I put it to the Minister------

Michael Noonan (Limerick City, Fine Gael)
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------would have agreed to this recommendation.

Mary Lou McDonald (Dublin Central, Sinn Fein)
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This is-----

Michael Noonan (Limerick City, Fine Gael)
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The Deputy can ask him the questions next week.

Mary Lou McDonald (Dublin Central, Sinn Fein)
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Chair, I have to object. I appreciate that the Minister has to answer but what he is doing is filibustering at its most classic.

Michael Noonan (Limerick City, Fine Gael)
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I do not think so.

Mary Lou McDonald (Dublin Central, Sinn Fein)
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I have put it to the Minister that when it became apparent, as a matter of fact, that a fixer fee was to be payable to a former member of the Northern committee of NAMA, this was an issue - not just on the purchaser's side - but was an issue for NAMA and that was the moment when the Minister should have, and had the authority, to intervene and call a halt to the sales process. The Minister failed to do so. He has never given an explanation as to why that was the case save today, where he said that the chairman of NAMA informed him that it was about to consult, that it had taken a decision to carry on and that it was going to get advice from its financial adviser. Is Mr. Noonan aware that as it turns out, according to Mr. Daly, NAMA did not tell its financial adviser about the fixers' fees?

Michael Noonan (Limerick City, Fine Gael)
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At-----

Mary Lou McDonald (Dublin Central, Sinn Fein)
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Did he give the Minister that piece of information?

Michael Noonan (Limerick City, Fine Gael)
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At the time of the withdrawal of PIMCO, and the subsequent assurance from Cerberus, NAMA thought this was sufficient to ensure that no former or current NAMA officials were associated with the buyer, and it decided for good and sufficient reason to proceed with the sale. If it had taken the opposite course, does the Deputy not think that a great collapse-----

Mary Lou McDonald (Dublin Central, Sinn Fein)
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I am not interested in speculating on the opposite course.

Michael Noonan (Limerick City, Fine Gael)
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One second, now.

Mary Lou McDonald (Dublin Central, Sinn Fein)
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I am interested in dealing with what happened, Minister.

Michael Noonan (Limerick City, Fine Gael)
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Yesterday-----

Mary Lou McDonald (Dublin Central, Sinn Fein)
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Can I ask the Minister on that subject?

Michael Noonan (Limerick City, Fine Gael)
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I think, Mr. Chairman, the Deputy should not frame her questions as allegations. If she wants to make allegations she should make them. But to be contorting questions into allegations, I cannot reply unless the Deputy allows me to do so.

Mary Lou McDonald (Dublin Central, Sinn Fein)
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Minister, that is not an allegation. It is a matter of established fact that he was made aware of the fixers' fees. It is a matter of established fact that he failed to intervene. He has advanced, at least in part, a rationale for doing so. I am challenging it because, quite frankly, it does not hold water. In his opening statement he said that the board were to have a discussion and it was going to take advice from its financial adviser. I am just informing the Minister, in case he did not know, that they did not even tell their financial adviser, they say, about these fixers' fees.

Let me ask the Minister as question. He had a conversation with Mr. Frank Daly, he said to him "We're gonna talk to the board, we're gonna talk to the financial adviser." It seems to me that the Minister took, on face value, that the financial adviser was informed and came back and said that everything is okay. Given the seriousness of this conflict of interest, what did the Minister or his officials do to establish what care was taken by NAMA in respect of the process and to get under the skin of what has to have been very shocking news to the Minister, in respect of Frank Cushnahan?

Michael Noonan (Limerick City, Fine Gael)
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The decision not to proceed with the sale to PIMCO, and the decision that there was sufficient competitive tension still in the process to allow the process to proceed with a sale to the remaining interested parties, was a commercial decision by the board of NAMA. I have no-----

Mary Lou McDonald (Dublin Central, Sinn Fein)
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Did the Minister see no role for himself?

Michael Noonan (Limerick City, Fine Gael)
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I have no authority to interfere in commercial decisions on the sale of property.

Mary Lou McDonald (Dublin Central, Sinn Fein)
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Can I remind the Minister-----

Michael Noonan (Limerick City, Fine Gael)
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And I have no-----

Mary Lou McDonald (Dublin Central, Sinn Fein)
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Can we move on from this matter, Minister?

Michael Noonan (Limerick City, Fine Gael)
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I have no-----

Mary Lou McDonald (Dublin Central, Sinn Fein)
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I was not inviting the Minister to make such an intervention.

Michael Noonan (Limerick City, Fine Gael)
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Well, if the Deputy picks-----

Mary Lou McDonald (Dublin Central, Sinn Fein)
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I am pointing out to him-----

Michael Noonan (Limerick City, Fine Gael)
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No, can I-----

Mary Lou McDonald (Dublin Central, Sinn Fein)
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-----that he has powers of direction, under the Act-----

Michael Noonan (Limerick City, Fine Gael)
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Chairman, can I be allowed answer?

Mary Lou McDonald (Dublin Central, Sinn Fein)
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-----and the Minister did not use them.

Seán Fleming (Laois, Fianna Fail)
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One person at a time, please.

Michael Noonan (Limerick City, Fine Gael)
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May I be allowed answer?

Seán Fleming (Laois, Fianna Fail)
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Yes.

Michael Noonan (Limerick City, Fine Gael)
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Or will I just listen to monologues?

Seán Fleming (Laois, Fianna Fail)
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Let the Minister answer.

Mary Lou McDonald (Dublin Central, Sinn Fein)
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Answer but please answer the question put.

Michael Noonan (Limerick City, Fine Gael)
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I have no authority either to interfere with criminal investigations either in the Republic-----

Mary Lou McDonald (Dublin Central, Sinn Fein)
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The Minister was not asked about that.

Michael Noonan (Limerick City, Fine Gael)
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-----or in Northern Ireland.

Mary Lou McDonald (Dublin Central, Sinn Fein)
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The Minister was not asked about that.

Michael Noonan (Limerick City, Fine Gael)
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Of course I was not asked because it did not suit the Deputy to ask but it is the context.

Mary Lou McDonald (Dublin Central, Sinn Fein)
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Why would I ask that? It is as obvious as the nose on one's face that it is irrelevant to the Minister for Finance but what is highly relevant is what he did and what decisions he took when this conflict of interest emerged. I will move on.

From NAMA's briefing document, we were told the Department of Finance, following a meeting with the Office of the Comptroller and Auditor General in early June 2016, indicated its surprise at the Comptroller and Auditor General's lack of knowledge of the loan sales market and advised that it would benefit greatly from external advice. As it happens, by June 2016 we are on draft three of the Comptroller and Auditor General report, so I am assuming the meeting happened in that context. NAMA cites a specific meeting where this allegation was made that there was insufficient expertise in the Comptroller and Auditor General's office. It is on paper.

Michael Noonan (Limerick City, Fine Gael)
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I am advised that draft one and draft two were only advanced to NAMA. Draft three was the first to come to us.

Mary Lou McDonald (Dublin Central, Sinn Fein)
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The Department had the draft at this stage. That is the point.

Michael Noonan (Limerick City, Fine Gael)
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Does Ms Nolan wish to comment on that?

Ms Ann Nolan:

I am unsure what is the question.

Mary Lou McDonald (Dublin Central, Sinn Fein)
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The question is this. Is it only at the point of June 2016 that a question mark emerges in the Department's heads around the appropriate expertise or competence of the Comptroller and Auditor General's office?