Michael Noonan (Limerick City, Fine Gael) | Oireachtas source

I move amendment No. 1:

To delete all words after “Dáil Éireann” and substitute the following:"notes that:

— the Project Eagle loan sale was executed in an entirely proper manner;

— attempts to conflate the National Asset Management Agency's open market loan sales process with allegations of wrongdoing on the buyer side of this transaction are entirely wrong;

— despite all the confusion and conflation in the coverage of this matter, the fact is that there are no claims of wrongdoing against NAMA; and

— NAMA is already subject to a high level of public accountability compared to other commercial bodies, including commercial bodies in the State sector;

acknowledges that:

— the chairman and chief executive of NAMA are accountable to the Committee of Public Accounts and other Oireachtas committees and to give evidence to those committees whenever required to do so;

— the chairman and chief executive have appeared before the PAC and addressed the Project Eagle sale process on 9 July 2015 and 1 October 2015;

— during the most recent PAC appearance of 1 October 2015, a number of PAC members stated there were no allegations of wrongdoing being levied at NAMA;

— as part of its upcoming third section 226 review of NAMA, the Comptroller and Auditor General has confirmed he will perform a value for money review of various NAMA sales transactions; the Project Eagle sale is being evaluated as a first priority as part of this review;

— the Comptroller and Auditor General has indicated he intends to produce a draft report before year end 2015; and

— the Comptroller and Auditor General is best positioned to independently review this transaction and make such a determination; and

calls on Dáil Éireann to support the upcoming Comptroller and Auditor General section 226 review of NAMA which will examine the Project Eagle sale as part of a broader value for money review of NAMA sales transactions."

In accordance with section 10 of the NAMA Act, NAMA is obliged to operate in a commercial manner and to achieve expeditiously the best financial return for the Irish taxpayer. It is a function of NAMA, pursuant to section 11(1)(d)(i), to dispose of loans or portfolios of loans in the market "for the best achievable price". Another control in place under the NAMA Act that has received broad support in the Oireachtas is section 172, which provides that a defaulting debtor cannot acquire from NAMA or a NAMA group entity any interest in any property which secures the debtor's loans.

It is against this obligation that NAMA's activities since its inception must be assessed. That is why my predecessor, the late Mr. Brian Lenihan, ensured NAMA was held accountable over these objectives by the Oireachtas through the legal standing provided to the Committee of Public Accounts and the Comptroller and Auditor General to oversee the work of NAMA. Under section 58 of the NAMA Act, the Committee of Public Accounts has the power, under the Standing Orders of Dáil Éireann to examine the accounts and reports of the Comptroller and Auditor General, and to call on the NAMA chairman and CEO to give evidence "whenever required" to report on various matters, including the Comptroller and Auditor General's audited accounts and special reports.

The Comptroller and Auditor General and the Committee of Public Accounts are held in the highest regard and I have full confidence in the ability of both to hold NAMA to account on this and, indeed, every transaction that it concludes. In this regard, I very much welcome the fact that the Committee of Public Accounts invited NAMA to appear before it to discuss the sale of the Northern Ireland portfolio, both on 9 July 2015 and on 1 October 2015. NAMA's opening statements for each appearance are available on the NAMA website and the full transcripts of those sessions are available on the Oireachtas website.

Concerns raised by the Committee of Public Accounts focus on whether NAMA maximised value for the taxpayer through this sales process. It is entirely appropriate that the Committee of Public Accounts explore such concerns. After all, it is the mandate of the Committee of Public Accounts to ensure NAMA operated in line with its legislative objectives, and the committee is well equipped to do so through the Comptroller and Auditor General.

As part of its upcoming third triennial review of NAMA under section 226 of the NAMA Act, the Comptroller and Auditor General has confirmed to the Committee of Public Accounts that he will perform a value-for-money review of the NAMA sales and will evaluate the sale of the Northern Ireland loan portfolio as a matter of priority. The Comptroller and Auditor General is best positioned to review independently this transaction from a value-for-money perspective and has indicated that he intends to produce a preliminary report as soon as is practicable. I am confident this report will be useful to the Committee of Public Accounts in continuing its important work. This represents the institutions of the State working in line with legislation in the best interest of the Irish taxpayer. It is clear to me that we have established the appropriate mechanisms to hold NAMA accountable on its legislative mandate, and we should allow those mechanisms to function.

There has been much coverage of various aspects of NAMA's sale of its Northern Ireland loan portfolio, most of which focuses on what may have happened on the purchaser side of the transaction, particularly in Northern Ireland. Serious allegations have been made against various individuals within the Northern Ireland business community in regard to their behaviour surrounding the acquisition of this portfolio. There are a number of investigations under way, including those with the UK National Crime Agency, NCA, the US Department of Justice, the Northern Ireland Committee for Finance and Personnel and the Law Society of Northern Ireland. Furthermore, I believe Deputy Wallace has brought his allegations to the attention of the Garda. I welcome these investigations. Such serious allegations should be, and are being, thoroughly investigated. However, to my knowledge, these investigations concern activities on the purchaser side of the sales process and do not involve NAMA's role in the process.

The NCA, supported by the Police Service of Northern Ireland, is conducting a criminal investigation into alleged inducement payments among parties involved on the purchase side of this transaction. The Northern Ireland Committee for Finance and Personnel has undertaken a fact-finding mission focusing on the Northern Ireland Department of Finance and Personnel's relationship with NAMA, its interest in the assets of Northern Ireland and the basis and rationale for any actions it may have taken in regard to this sale.

The Law Society of Northern Ireland is investigating the behaviour of a former partner of Tughans solicitors, based in Northern Ireland, regarding allegations around the diversion of advisory fees paid to that firm. The CEO and chairman of NAMA met the NCA some weeks ago to provide an overview of NAMA and the chronology of the sale process. It is their clear understanding, based on that engagement, that the NCA investigation is not concerned with NAMA's role in this transaction. The NCA's focus appears to be very much on the purchaser side of the transaction. Both NAMA and the Department of Finance have supplied extensive documentation to both the Northern Ireland Committee for Finance and Personnel and the Oireachtas Committee of Public Accounts. NAMA provided both committees with a detailed 300-page response to 73 questions posed by the Northern Ireland committee. This response is available on the NAMA website. My Department has also provided extensive documentation to the two committees. These documents are available on the Department of Finance's website. The Northern Ireland committee has indicated that it may submit further questions to NAMA, and NAMA stands ready to assist the committee with responses.

I would encourage the signatories of the current motion to read the materials that have been made available by NAMA and my Department as a thorough review and understanding of these materials may quench their desire for an investigation. It is important to state that, through all of this disclosure and investigation, there has not been a single allegation of wrongdoing directed at NAMA.

Attempts to conflate NAMA's open-market loan sale process with allegations on the purchase side of the sale process are entirely wrong and misleading. As I have previously confirmed, NAMA is not being investigated as part of any of the ongoing inquiries. We should ask ourselves who stands stand to gain from the establishment of an investigation when there is no allegation of wrongdoing. Who stands to gain from drawing a halt to current sales processes while an investigation is undertaken?

With the millions or potentially billions of lost value that would likely result from such an action, it is clearly not the taxpayer who stands to gain.

In any case, the Deputy has put this motion to the House without any indication of wrongdoing by NAMA and may have created questions in people's minds, so I will again set out the facts surrounding the sale of the Northern Ireland loan portfolio which raise no question regarding NAMA's behaviour in this process. These events and the documents supporting these events are a matter of public record and can be found on the Department of Finance and NAMA websites.

In late June 2013, I received a letter from the Northern Ireland Minister for Finance and Personnel, Mr. Sammy Wilson. With his letter Mr. Wilson enclosed a copy of a letter he had received from a law firm, Brown Rudnick, which indicated that a client of theirs was interested in acquiring NAMA's Northern Ireland loan portfolio. The Brown Rudnick letter advocated a semi-exclusive sales process and considered a number of suggestions regarding the future management of the portfolio, which suggestions were for the Minister, Mr. Wilson, to consider.

In my reply I pointed out to the Minister, Mr. Wilson, that parties interested in acquiring NAMA loans or assets securing NAMA loans should contact NAMA directly. I also drew attention to NAMA's policy that loan and asset sales should be openly marketed and pointed out that NAMA did not favour granting exclusive access to any potential purchaser as that would militate against achieving optimal value for the assets concerned.

In September 2013, Brown Rudnick made an unsolicited approach to NAMA and indicated that one of their clients, PIMCO, was interested in acquiring NAMA's Northern Ireland loan portfolio. In its subsequent engagement with NAMA, PIMCO indicated a preference for NAMA not to market the portfolio openly. The NAMA board agreed that senior NAMA staff should engage further with PIMCO but with a view ultimately to completing an openly marketed loan sale in line with board policy.

On 27 September 2013, at his request, I met the First Minister, Peter Robinson, in Stormont Castle. At that meeting we discussed, among other things, NAMA's Northern Ireland portfolio. I explained that NAMA's policy was that loan and asset sales should be openly marketed and that NAMA did not favour granting exclusive access to any potential purchaser. The First Minister, Mr. Robinson, while completely understanding NAMA's position, expressed his reservations that an open process may attract buyers seeking to profit at the expense of the Northern Ireland economy.

As would be expected, NAMA did not conduct an exclusive sales process. At a meeting on 12 December 2013, the NAMA board decided that the portfolio should be openly marketed as part of a competitive process. The board also set a minimum price below which it would not be willing to proceed with a sale.

At a further meeting on 8 January 2014, the NAMA board approved the appointment of Lazard bankers to advise NAMA on the appropriate marketing approach and to oversee the sales process. It was envisaged that this would involve marketing to suitable targeted bidders who would have the financial wherewithal to submit credible bids on the portfolio.

On 14 January 2014, at the request of the Northern Ireland Executive, I held a call with the First Minister, Mr. Robinson, and the Deputy First Minister, Mr. McGuinness, to discuss the Northern Ireland portfolio sales process. I reiterated NAMA's intention to conduct an open and competitive sales process. It was agreed during that call that the Northern Ireland Executive would send to NAMA for informational purposes a draft letter of intent which the Northern Ireland Executive would seek to put in place between itself and each bidder relating to the proposed management of the Northern Ireland portfolio following its sale by NAMA.

On 17 January 2014, NAMA received a copy of that draft letter of intent which appeared to summarise an agreement between PIMCO and the Northern Ireland Executive. Its purpose was to require the purchaser of the portfolio to enter into a memorandum of understanding with the Government of Northern Ireland confirming certain fundamental conditions relating to the future management of the portfolio. I am assured that NAMA did not engage further in relation to the draft letter.

On 10 March 2014, PIMCO informed NAMA that its compliance staff had discovered that PIMCO's proposed fee arrangement with Brown Rudnick included also a payment of fees to Tughans, a Belfast law firm, and to Mr. Cushnahan, a former external member of NAMA's Northern Ireland advisory committee, NIAC. While Mr. Cushnahan was not a member of the NIAC at the time - he had resigned on 8 November 2013 - and never had access to confidential portfolio information, NAMA viewed this disclosure as a very serious development and the NAMA board met on 11 March 2014 to consider the most appropriate course of action. The NAMA board decided that if PIMCO did not withdraw, NAMA could not permit it to remain in the sales process. NAMA informed me of the proposed fee arrangement at the time it was brought to its attention. On 13 March 2014, following discussions with NAMA, PIMCO informed NAMA that it would withdraw from the sales process.

Up to that point, during the first quarter of 2014, Lazard had engaged with a total of nine potential purchasers, including PIMCO. Following the withdrawal of PIMCO from the process and having concluded that there was sufficient competitive tension among the remaining bidders, Lazard went on to engage with the remaining interested parties. On 28 March 2014, I held a call with the First Minister, Mr. Robinson, to update him on the sales process. At the end of the process, the best bid from the two remaining bidders was received from Cerberus.

In light of the arrangement that PIMCO had brought to NAMA's attention, prior to NAMA accepting its bid, Cerberus provided NAMA with written confirmation that no fees were paid to any party that ever had a relationship with NAMA, including any current or former NAMA board member, current or former committee member or current or former staff member. The Cerberus bid was accepted by the board on 3 April and was announced on 4 April 2014. The transaction was completed in June 2014. I am assured by NAMA that the sale process was well managed and competitive, conducted in line with best international practice, independently overseen by Lazard, and thatNAMA took care at all stages to ensure the integrity of the process was fully protected.

There have been some suggestions that upon learning about the PIMCO fee arrangement I should have intervened and halted the sales process. It is crucial to remember that the Oireachtas, in framing the NAMA Act, ensured that NAMA would be independent in its decision-making to avoid a position where others, whether for political or commercial self-interest or for other reasons, would seek to influence decision-making in a way that would serve only certain vested interests. By extension, any such interference would be detrimental to the interests of Irish taxpayers. Political interference in NAMA's independent commercial decision-making would render the agency incapable of carrying out its work on behalf of taxpayers and would cast a major shadow over NAMA's ability to achieve its objectives.

Turning back to the proposed Private Members' motion before us, I maintain that no such investigation into NAMA is necessary. I can see no benefit of such an investigation because up to now there has been no allegation of wrongdoing directed towards NAMA. NAMA is held accountable by the Oireachtas for fulfilling its objectives, and the Committee of Public Accounts is exercising that oversight through the Comptroller and Auditor General's current value for money review of NAMA transactions. The Comptroller and Auditor General has confirmed that this review will prioritise a value for money review of the sale of the Northern Ireland portfolio. The Comptroller and Auditor General expects to produce a draft report as soon as practicable. It is entirely appropriate that the Comptroller and Auditor General would conduct such a review. I welcome and support this review and ask that Members do likewise.

I am very surprised that Fianna Fáil tabled this motion. NAMA is one of the few successes in the Fianna Fáil legacy-----

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