Seán Fleming (Laois-Offaly, Fianna Fail) | Oireachtas source

I welcome the opportunity to contribute on this motion, which calls on the Government to establish a commission of inquiry into the sale of NAMA's Northern Ireland portfolio. That is what it means in straightforward English, as people might not understand titles like "Project Eagle" and so on.

There was a loan book of €5.4 billion. NAMA paid €2 billion and received proceeds of €1.6 billion, representing a loss to the Irish taxpayer of 70%, or €3.8 billion. No matter how one views this, it is a disastrous day's work. Commissions of inquiry have been established for much less. That €3.8 billion is probably as much as is collected in USC in a full year. Imagine if we had that we would not need to have a chat about how long it would take to reduce the USC. The Minister might claim that NAMA was not responsible for all of the loss because it got the loans at a discount, but NAMA has had a duty from the beginning to recover as much for the taxpayer as possible, not just to set a target identical to the amount at which it took over the loans. I have discussed this matter at the Committee of Public Accounts.

NAMA has been clear on a couple of points, the first of which is that the £7 million that showed up in a bank account has nothing to do with its side of the sales process. That is correct in so far as it goes, as the money was on the purchaser's side, but that is not the full story. Instead, the full story is that the purchaser made that £7 million available to secure the purchase of the Northern Ireland portfolio. As such, the £7 million should have gone to NAMA. NAMA has claimed that the fee had nothing to do with it because it did not get that money, but the people making the purchase knew that they could allocate some of the amount they were bidding to other purposes, proving that the €1.6 billion was not the maximum amount that NAMA could have got.

I am not questioning NAMA's integrity, but its commercial competence. Its members are honourable people, including the former chairman of the Revenue Commissioners, against whom no one in the House would say a word. He is a man of integrity. However, when a process ends with one bid on the table, any sensible business person would cancel the process and return to it another day. Proceeding with just one live bid, one that was close to the price that NAMA had stated it would accept, was wrong. This is the crux of the matter. From a commercial point of view, the process should have stopped at that point. No one even knew about possible conflicts of interest.

Some probably misunderstand where the loan book was based. Geographically, 50% of the properties were in Northern Ireland, with 33% in the rest of the UK. Of that, 40% was in Scotland and 23% in the north west. In addition, 6% of the properties were located in rural counties in the South, 1% were located in Dublin, 6% were outside Ireland and the UK and 4% were in London. To fixate on the Northern property market not being great and that this was a scrappy portfolio does not reflect the truth. Only 50% of the underlying distressed assets were in the North. It is important that this fact be taken into account, as it is slid past in all of the discussions.

Regarding conflicts of interest, the question of Mr. Cushnahan has been raised several times, including at the Committee of Public Accounts. Since the committee's last meeting, I wrote to NAMA to ask whether it had been aware of the possible conflict of interest involved in that situation. I thank the person in NAMA who recently sent me a letter in response. NAMA confirmed that Mr. Cushnahan had not disclosed to it the "alleged" shareholding in Mr. Graham's company. That shareholding is a matter of public record, yet NAMA called it "alleged". According to the letter, NAMA understands that it is a matter of public record that Mr. Cushnahan's solicitor has stated that Mr. Cushnahan disposed of his shareholding in Mr. Graham's company in 2008.

I wish to refer to an extract from a Companies House record relating to the company in question, Fernheath Developments Limited, company registration No. NI055085. The date of the return sourced in the Companies House was 9 May 2010. The address is Oyster House, 12 Wellington Place, Belfast. Mr. Frank Cushnahan was listed as a shareholder on 9 May 2010. NAMA has accepted an assurance that the shareholding was sold in 2008. Elsewhere, I believe at the Northern Ireland committee, it was stated that the shareholding was sold in 2009. And yet the Companies House asserts that he was still a shareholder in May 2010. The Companies House record is the true version. Wrong information is being put about and people are accepting it at face value when it suits them not to pursue the matter in greater detail.

For shorthand, we have been calling it the "Northern Ireland" portfolio, but that is not what it is. Only half of it was located in Northern Ireland. As I have pointed out in immense detail, the rest was located outside Northern Ireland. For now, though, we will call it the "Northern Ireland" portfolio.

Why did NAMA feel the need to bundle all of the loans together and sell them off and why is it doing the same thing again? I referred to the reason recently. The Minister met some people in Davos who told him that they were not interested in scrappy little projects of 200, 300, 400 or 500 properties, and that they would only buy anything on the cheap if he gave them a decent bit. Given the scale of the projects being made available for sale, only a limited number of organisations in the world have the necessary resources to compete for them. We are removing the possibility that people in Ireland will buy back some of the loans. I am not referring to those whose loans these were in the first place, but to other people who could have put the loans to good use. NAMA took its lead from the Minister, put the loans up in large lots and sold them quickly.

The Northern Ireland portfolio process was fraught with political involvement at every stage. There were letters from the Minister and letters to Members of the Northern Ireland Assembly and the Assembly's finance committee. It is essential that there be no political interference in NAMA's activities, yet I have never seen such political involvement in anything that was not meant to have any as I did in this sale.

Intriguingly, everyone believes that a commission of inquiry is required. The Committee of Public Accounts has examined the issue, but there is a limit to its powers. The Northern Ireland finance committee also has limited powers to examine it. A commission of inquiry would have more teeth and the ability to go where neither committee has gone to date. It is remarkable how the Minister has resisted establishing a commission. Why is he the only one holding back a proper investigation? I do not understand it, as I do not believe that he has anything to hide. He will recall the issue with Siteserv and IBRC from some time ago. He set up a commission of investigation. I do not know how it stands now, although I believe it is to report in the near future. When the Minister saw that there was a genuine rather than frivolous public demand from people who had an issue with how that situation was handled, he believed that it was right for the reputation of everyone involved, including the Government's, to set up a commission of investigation. While that has long-fingered the matter to beyond the next election, as we do not expect the commission to report by next spring, people will be happy to get the truth in a report somewhere along the line. The Comptroller and Auditor General is also examining this matter and will report on it shortly.

That will be helpful in this context because he will have access to information that will not necessarily be available even to the members of the Committee of Public Accounts or, perhaps, the Minister. However, I must put the conflicts of interest I mentioned on the table. NAMA was a little naive in accepting some of the assurances it was given. I have given the Minister the concrete example of people having shares in a particular company when NAMA believed in good faith — I am not questioning its integrity — a statement that the shareholdings had been sold in 2008. To return to my point, I do not believe the organisation was commercially sharp enough to deal with some of the sharks it was in the water with.

This brings us to the conclusion of NAMA's loan book activity. Let us consider NAMA's statements to the Committee of Public Accounts. It takes a very conservative view. If it is saying it expects to have a surplus of €1.75 billion on concluding its activities in the next two years or so, it will be welcome. It should come back to the Irish taxpayer. I am quite sure NAMA will have a much greater surplus because it is taking a conservative view.

As a member of the Committee of Public Accounts, I was shocked to hear a certain response to one of my questions to the NAMA representatives. The public cannot get the information in question as of now but we are going to chase NAMA to provide it. NAMA took over loans from Anglo Irish Bank, Allied Irish Banks and Bank of Ireland and it has no system in place at the end of the day to report, in respect of the €34 billion of loans it took over, how much was achieved in respect of each of the banks. Ultimately, the agency can talk about what was achieved in respect of each of the developers and the loans from individuals but it cannot give the details on the loans it took from the various banks. That needs to be examined.

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