Michael McGrath (Cork South Central, Fianna Fail) | Oireachtas source

I am pleased the Minister for Finance is present to discuss this issue. On 2 August last, the National Asset Management Agency, NAMA, was advised by a journalist from The Sunday Times that a senior executive in the agency, Mr. Enda Farrell, purchased a five bedroom house in Dublin last December from the agency's portfolio in a private deal without the property being put up for sale on the open market. NAMA's response was to appoint its internal auditor, Deloitte, to carry out a review of the transaction. The newspaper ran the story on Sunday, 5 August.

On the question of the property transaction, Deloitte subsequently found that the National Asset Management Agency approved the transaction without apparently realising that the purchaser was one of its employees. The agency stated the failure of Mr. Farrell to disclose the transaction was a breach of its internal procedures. Incredibly, it appears there is no explicit rule in place to prevent NAMA employees from entering into private deals to purchase agency properties. This position needs to change.

This story should have set alarm bells ringing in the National Asset Management Agency and Department. The response from NAMA, in appointing its internal auditor to carry out an investigation, was entirely inadequate. However, the story gets much worse. During the course of the review carried out by Deloitte, evidence was found that pointed to the removal by Mr. Farrell of confidential commercial information from the National Asset Management Agency. High Court proceedings were initiated by the agency in this regard and lawyers for NAMA told the High Court that the information had been taken in a premeditated way over a number of months. This raises a number of serious questions about the internal control and governance arrangements in the agency. How is it possible that information of such a commercially sensitive nature and pertaining to more than 11,000 loans, with a nominal value of approximately €74 billion and underpinned by approximately 16,000 properties, could be compromised in this manner? The very essence of the work of NAMA was potentially compromised by the breach of confidentiality surrounding this information.

It is my understanding that the information technology controls in the National Asset Management Agency prohibit the sending of e-mails to personal accounts, for instance, Hotmail, Gmail and Yahoo accounts. However, as the recipient e-mail address in this case was a professional services firm with which NAMA engages in some work, the e-mail left the agency and was received. Recently and belatedly, NAMA referred the matter to the Garda Síochána. On 5 August, the day this story broke, I immediately called for the matter to be referred to the Garda as it was always one for Garda investigation. Offences under the National Asset Management Agency Act are criminal offences. It was never adequate for NAMA to carry out an internal inquiry into the private sale of one of its properties to an employee without the property being placed for sale on the open market. In the course of the investigation into this matter it subsequently emerged that highly valuable commercial information had been potentially compromised. This issue is of extreme importance and goes to the heart of the role of the National Asset Management Agency. Members of the Oireachtas and citizens have placed their faith in the agency fulfilling its role. NAMA is among the largest - if it is not the largest - property portfolio owners in the world. It is entirely unacceptable to have information of this nature potentially compromised in this manner.

If, as the lawyers for the National Asset Management Agency have stated, this was done in a premeditated fashion over a number of months, it calls into question the governance and control arrangements in the agency. It is well past time the Minister appointed an independent person to find out exactly what took place in this case and carry out a root and branch review of the governance arrangements and control procedures that apply in the agency.

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