Michael D'Arcy (Wexford, Fine Gael)

I wish to offer the new Ceann Comhairle my best wishes in respect of the office he now holds.

"[G]overnment of the people, by the people, for the people" - these are the immortal words of Abraham Lincoln. What the NAMA legislation represents is government of the developers, by Fianna Fáil and the Greens, for the banks. It gives me no pleasure whatsoever to contribute to the debate on this legislation. The country as a whole has been devalued by the despicable behaviour of a few.

While it is easy to accuse developers of causing the greater part of this debacle, in my view, it was the bankers who were responsible. There were a number of telling signs that we had gone off track. The two main banks, AIB and Bank of Ireland, both sold their headquarters to pension funds when the market was at its maximum. If that was not bad enough, the banks then got a tax break which is costing taxpayers additional moneys. Again, the banks are running rings around taxpayers, the citizens of this State. As always, they are self-serving and clever. When those who provide funding sell their most valuable assets, alarm bells should go off all over the place. Unfortunately, while alarm bells were going off, well-paid public and civil servants in the higher echelons of regulation chose the easiest path open to them. In other words, they did nothing.

The banks were lending tens of millions to people with no record of trading in a downturn. Funds were allocated to ensure that projects advanced, with no analysis of what would happen if the market did not remain at its height. Did no one believe a slowdown had to occur or that a crash could occur? Did no one believe our property bubble could only end like all other property bubbles worldwide, namely, that it would burst? Where are the people who were talking about a moderate correction to the market and a soft landing? They have vanished because there could never have been such a landing. That was fanciful talk by those who had an interest in keeping prices high. Who are they? They are the Government, auctioneers, bankers and developers.

It is disturbing that some of these now likely to be bankrupt developers are focusing on starting new companies in other countries in order that they might continue to trade. I must say one thing: these guys can build. What I find distasteful is the prospect that people who contributed significantly to our recession can adopt a business-as-usual attitude and commence trading in other jurisdictions. I have not mentioned builders because many have continued to operate in the area they know and understand best, namely, the building trade. Not all of them went into development.

Members might ask how I have reached the conclusion that State officials took the easy option. They need only consider the position of Mr. Patrick Neary, the former CEO of the Financial Regulator. How could this supposedly independent official cry halt when every Government Minister, the current Taoiseach and his immediate predecessor included, were saying "Party on lads, our economy is built on sound foundations"? How could Mr. Neary, who was appointed by the Government, state that everything his political masters were saying was wrong? It was, after all, former Taoiseach, Deputy Bertie Ahern, who said that independent, objective economists whom he believed to be talking down the economy should consider committing suicide. What was the outcome for the former CEO of the Financial Regulator who acted so poorly on behalf of the State? Just like Mr. Molloy from FÁS, he received a massive golden handshake. The lesson is to do one's job badly and be rewarded for it.

Fianna Fáil, which has been in Government for 23 of the past 25 years, has led us to this. God forbid that independent regulators should have acted independently. This would have been too much to ask. What were the governors of the Central Bank and Financial Services Authority of Ireland doing when these events were occurring? The fact that the European Central Bank holds sway does not mean that these individuals could absolve themselves of carrying out all further duties. However, absolve themselves they did. We, as a nation, are now paying the price.

The Minister for Finance stated that he will accept amendments on Committee Stage. The issue of valuation has received a great deal of coverage but that relating to the types of assets involved has not. In my view, we have the good, the bad and the ugly assets. There is, however, a fourth type, namely, the useless asset. I refer here to the €9 billion in rolled up interest owed to the banks. This is not an asset. Why are we giving the banks a free pass in respect of interest? Another useless asset is the €28 billion given to Anglo Irish Bank. These funds will never be seen again.

Why is the Government not facilitating small business in the same way it is assisting the banks? There are animals grazing on some of the ugly assets to which I refer and that is likely to be the case for many years to come. I am of the view that there must be a buy-back clause in respect of these assets. The banks would love to transfer them to NAMA at the supposed prices at which they were originally purchased. During its lifetime, NAMA will never realise those prices, or a fraction of them. The relevant clause will then force valuers acting for the banks to identify a realistic figure that might be achieved over time. If this does not come to pass, the banks must repurchase such assets at the price at which they were transferred to NAMA in the first instance. The taxpayers of today and their successors will, therefore, be protected and will not forced to take the most deplorable hit in respect of the poorest of assets purchased by developers in the Celtic Tiger era.

Assets which involve estates that have almost been completed must be handled carefully. I have heard some talk of social housing being provided in these estates. I was previously a member of local authority and I urge caution in this regard. Ghettos are man made. God forbid that the State might allow the mistakes that were made in Limerick and Ballymun to be repeated in every town throughout the country.

The current market value of assets must be considered. What is that value at present? The market value of a residential unit is what it sells for today, irrespective of whether the sale is a forced one. A sale is a sale. Why do we have an archaic system which does not allow the public to know the actual price of something? A private treaty sale should not be private. There must be open disclosure of the amount for which a property changes hands. This can be easily achieved. When legal representatives close a sale, the Revenue Commissioners could be notified and the amount involved could be placed on the relevant website within a short period. This would stop the type of sharp practice that held sway for far too long whereby the prices related to people were incorrect. Under the system I propose, if a house is sold and a buyer wants to inquire as to the price, he or she can check the website to discover the real figure. The secrecy involved in the current system always ensures that unsuspecting purchasers overpay for properties.

The Government believes this is a "Ronseal" deal. In other words, it does what it says on the tin. My concern is that if we value these assets high enough, it will give the banks the opportunity to cash their Government bonds with the European Central Bank. For all intents and purposes, this is the European Central Bank's way of injecting capital into the economy. We thank it for that. However, there is no guarantee from our friends in the lending institutions that the funds in question will be invested to ensure that existing jobs will be protected and new ones created.

Many jobs are teetering on the brink of extinction because of cashflow difficulties. As a result of these difficulties, that banks have not, to date, facilitated sustainable businesses by providing them with funds. The banks can put the funds provided by the ECB on their own balance sheets in order to meet the requirement for them to have in place the correct ratio between funds lent and funds on deposit. The doomsday scenario is that even after all these funds have been provided by NAMA, the State will be required to further recapitalise and even nationalise the banks. That matter is for the State and no one else to decide.

I wish to take issue with the Minister for Finance, Deputy Brian Lenihan, and the EU Commissioner for Economic and Monetary Affairs, Mr. Joaquín Almunia. Mr. Almunia attended a press conference on Friday at which he stated that NAMA should be rushed through as quickly as possible. This represents an outright interference in national affairs. It is unforgivable that an EU Commissioner should make such an intervention on the night before the Green Party took its vote to keep Fianna Fáil in government.

There is a long-standing convention that Commissioners do not interfere in national politics. However, as can be seen with the NAMA legislation, all pressures are being brought to bear to ensure a successful outcome. The Green Party Members, who rolled over so easily are no longer green but are more akin to turquoise.

As for the banks, these are the same lending institutions that facilitated the transfer of funds out of the country illegally and the establishment of many offshore accounts. They set up dozens of accounts per client, in some cases with false names, to mask their clients and their fraudulent actions. Those who were caught were pursued by the Revenue Commissioners and paid the relevant tax, interest and penalties that were due. The banks paid their fines and continued with business as usual. How can one trust these people when their actions and deeds have been so dishonourable towards the State? Lending institutions have a commitment towards shareholders with no public interest remit. However, when they face ruin due to their reckless trading, they ask the State to intervene and save their industry. Other countries that have bailed out their banking sectors are finding out how grateful are these banks. The Obama Administration is highly dissatisfied with its financial institutions, which are not lending to any business, big or small. Will we find ourselves in the same position? This is not simply my opinion. Dr. Michael Casey, former head of economics at the Central Bank, described NAMA as a stroke. At the Glenties summer school, Dr. Patrick Honohan, who now is Governor of the Central Bank, stated there was no guarantee of lending from the Irish banks. The European Central Bank has noted that banks have a self-interest in hoarding money and Professor Joseph Stiglitz stated that to buy over market value was criminal. I note that Professors Stiglitz and Krugman are both Nobel Prize laureates in economics.

This Government is so determined to operate on a business-as-usual basis that another major concern arises. Instead of lending to small businesses, what if the banks trade conservatively and purchase Irish Government bonds? In this scenario, the Government provides its bonds for the six covered financial institutions, which in turn cash these bonds with the European Central Bank. The aforementioned banks then buy Irish Government bonds on the international markets. While this is not allowed, if it happens it will be nothing short of a three-card trick.

Astonishingly, our six institutions, which are small by international standards, are placing their corporate identity ahead of everything else. Members should recall the belligerence shown towards the Minister for Finance when the idea was floated about a merger of some of the aforementioned institutions. Their corporate identity is much more important than safeguarding taxpayers' money. The Minister for Finance must ensure that the observation of NAMA is open, transparent, and unquestioned by all because, otherwise, the public will not believe this one-party Fianna Fáil State will not favour those who have funded them throughout the Celtic tiger era boom.

The Minister for Finance must ensure that taxpayers are not compromised by developers whose loans have been transferred to NAMA but whose liability to the State remains the same. This can be no developers' charter for them to renege, file for receivership or go into examinership only to reappear some time later to continue trading as though nothing has happened. These are the same people who helicoptered, jetted and lived like merchant princes of the 1700s. Taxpayers will not accept funding NAMA to allow developers re-establish business as usual. There are concerns that many developers have placed properties with no mortgages into family members' names. While their companies may be bankrupt at a corporate level, such individuals still will retain a huge asset value that is out of reach and in effect is being paid for by the citizens. This is not acceptable. The personal guarantees are a legal minefield and may not be worth the paper on which they are written. I do not doubt there will be many legal challenges before a clear corridor is available for officials within NAMA.

The Zoe group's court cases over the summer require comment as to have two cases heard within a few weeks in this State's superior courts is unique. However, the Supreme Court headed off the Zoe group at the pass and criticised the concept of future economic value by stating the only value is current market value and that anything beyond that is a guesstimate. The banks covered by the State guarantee and NAMA have a huge question to answer. How can NAMA deal with a covered Irish institution that has a property with a mortgage on it when a non-covered bank trading within the State also has a mortgage on the same property? Will NAMA pay off the cross-mortgaged properties of those non-covered institutions which trade in the Republic?

The civil servants in our one-party State who chose not to tell the emperor he was wearing no clothes will be the same individuals who will attempt to force the banks to provide capital to business and who failed us at the peak of the boom. Do the State's employees have sufficient financial, legal and administrative abilities to compete with the hired guns that the major banks and developers are likely to draft in? I do not believe so.

Will the Government bail out citizens as quickly as the banks? The Department of Social and Family affairs will not provide mortgage interest relief for a household with any source of earned income. In the case of a dual-income household that is working to pay for its house, even the loss of one job and reduction to part-time status of the other will elicit no help for such people from the State, which is highly unfair. When will a NAMA be provided for those who are earning the least and who bought the most expensive properties in the country? Such people, who did it right, should not be allowed to fail. The muscle and power of this great little country should provide support and backup for these people.

The Fine Gael proposal for a recovery bank has been dealt with by my colleagues on this side of the House. It is a good idea, which would provide €22 billion in a wholesale bank market to ensure the continuation of business. The purpose of NAMA is to allow time and inflation catch up on the €54 billion. The Bill to provide this sum is the worst legislation that has ever come before this House. The real difficulty with NAMA concerns our ability to provide funds for those within the State who need its services. The measure of any society is how well it looks after those who are less capable of looking after themselves. However, this proposal will remove our capacity and the cuts, savings, adjustments, or whatever the Government Members wish to call them, will be for naught. All our abilities to raise additional funds will be consumed by NAMA and banks are to be looked after before the citizens. If one is keeping score, the score is €77 billion to the banks and nil to the citizens.

In conclusion, I wish to demonstrate what is a million and what is a billion because figures involving millions and billions are being thrown about and people have lost sight of what they mean. While people may know what is a million, a billion is 1,000 million. I propose to count in seconds rather than in euro. If one counts 1 million seconds and transfers that number into days, it amounts to 12 days. However, 1 billion seconds amounts to 12,000 days or 33 years. If one takes 54 billion seconds, the equivalent figure is 1,750 years. We could be paying back this money forever.

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