Mick Wallace (Wexford, Independent) | Oireachtas source

I move:

That Dáil Éireann calls on the Government to establish a Commission of Investigation under the Commissions of Investigation Act 2004, that would be sufficiently mandated to conduct a full and proper examination of all the facts surrounding the sale, by the National Asset Management Agency, of the Northern Ireland loan book portfolio, Project Eagle; and to establish a deadline for the completion and publication of the report by the Commission of Investigation.

I will share my time with Deputy Clare Daly.

The sale of Project Eagle by NAMA to Cerberus for £1.241 billion was, at the time, the largest ever property deal to take place on the island of Ireland. It was also the first time that NAMA packaged up a loan book to sell in its entirety - 850 loans to be precise. Project Eagle is now under investigation in two different jurisdictions. The Securities and Exchange Commission in America is investigating it and so is the National Crime Agency in Britain. Repeated claims by the Taoiseach and the Minister for Finance, Deputy Michael Noonan, that allegations of wrongdoing have not been directed at NAMA are not true. I have alleged wrongdoing by the two former NAMA employees, Frank Cushnahan and Ronnie Hanna, in their role in the sale of Project Eagle. Both men have now been arrested by the NCA in Northern Ireland. The Minister said last week that all known allegations are being investigated by the appropriate authorities, but I do not agree. Ronnie Hanna worked for NAMA in Dublin as head of asset recovery. He is currently on bail in Northern Ireland on fraud offences relating to Project Eagle. The man who held one of the most powerful positions in NAMA for over four years has been arrested, is on police bail and has to come back to answer further questions. A file has been prepared for the Director of Public Prosecutions, DPP, and this Government has not batted an eyelid. NAMA is ours. Its assets belong to the people and they bear every euro of loss that it incurs. The people pay its salaries. They paid for Frank Cushnahan and Ronnie Hanna's salary. Unfortunately, it appears that others were paying them too. We owe it to the people at least to investigate whether there is any material indication of wrongdoing. Every other country that was tangentially involved in Project Eagle has seen the same indication and has opened an investigation. Only Ireland, to its shame, has not. With every passing day, the Government is losing credibility.

Project Eagle cannot be split into two separate transactions no matter how NAMA attempts to distance itself from the deal. I am hopeful the ongoing investigations by the Securities and Exchange Commission and the NCA will help to shed light on the deal. Neither is investigating the specific role played by NAMA in this deal. NAMA is a sideshow to them because they are only concerned with offences committed in their jurisdictions.

NAMA has repeatedly misled anyone who will listen to it when answering questions on its role in Project Eagle. I will give some examples. I was told by NAMA in response to a written question that Ronnie Hanna, David Watters and Frank Cushnahan never met any prospective purchaser of that portfolio, which is not true. I have had it confirmed by the chief executive of one of the bidders. Frank Daly stated that in his role on the Northern Ireland Advisory Committee, Frank Cushnahan was not involved in any decision-making and did not have access to confidential data. If so, why, after Frank Cushnahan resigned in 2013, did NAMA insist that he confirmed that all his confidential files at Tughans had been destroyed? Brian Rowntree, who was also on the Northern Ireland Advisory Committee, contradicts NAMA on this, stating that it was privy to confidential information. In his reply to NAMA, Frank Cushnahan said, "I am returning herewith as requested the enclosed letter confirming that all documentation has been securely disposed of." What in God's name would he be disposing of if there was nothing to dispose of? Why was he entitled to £5 million if he had no confidential information? It does not stack up.

Frank Cushnahan had confidential information on borrowers. NAMA said he did not have confidential information on the sales process. The sales process was not so relevant but he had enough inside information for it to be worth an awful lot of money. NAMA said the Northern Ireland property market was not looking good in January 2014 and that it believed the best approach was a sale of the entire loan book. I will read some extracts from CBRE, Savills and Lisney. A CBRE report on 28 January 2014 on the Northern Irish commercial property market said of 2013, that:

Last year marked a major turning point for the commercial property market in Northern Ireland with the first tentative signs of recovery emerging in the second half of the year. The most notable trend was an increase in activity in the investment sector as the process of deleveraging kicked off in Northern Ireland in the last six months of 2013. There was strong demand from both institutional and local buyers for the assets that came available for sale.

A Savills report in January 2014 said:

2013 marked the beginning of a new cycle in the Northern Irish market. NI is mirroring the general UK macroeconomic performance which has now returned three consecutive quarters of economic growth.

In a similar vein, Declan Flynn, the managing director of Lisney in Belfast, said, "Our 2013 research has highlighted that Property Investment transactions in Northern Ireland have increased six fold over the last two years." The notion that things were bad is wrong. Things were not wonderful but they had improved dramatically. They say that commercial property only increased in value between 2% and 3% in 2014. That is a real giveaway because it means Cerberus will come close to doubling its money on its purchase. It means they bought very low in the market because it got Project Eagle for nearly half of what it was worth. Why are we not concerned about that? NAMA will continue to get away with all these contradictions and more until an independent commission of investigation, with the ability to demand all the relevant documentary information regardless of commercial sensitivity, is initiated.

Another important question that a commission of investigation would examine is whether the Project Eagle bidding process was competitive. When asked this question, NAMA has always passed the buck and referred back to its sale adviser Lazard, which stated there was sufficient competitive tension between Cerberus and Fortress to continue the bidding process. What evidence was provided at the time to show competitive tension still existed? I have spoken to a senior executive in Fortress who confirmed there was no competitive tension. He said that the lack of tension was horrifically uncompetitive. They were his words. Cerberus bid £1.241 billion. The reserve price was £1.24 billion. Fortress bid £1.1 billion. Let us not get into the argument of whether it knew the reserve price and whether it wanted to get back into the process or not. It was not a competitive tendering process by any stretch of the imagination. It does not stack up. Fortress had to write to the Department of the Taoiseach to gain entry to the sales process. Cerberus met NAMA's head of asset recovery, Ronnie Hanna, the day before the bid was accepted. What was discussed at this meeting? Can we see the minutes? NAMA will not give them to us but a commission of investigation would compel it to reveal the truth. I have requested under freedom of information from NAMA all e-mails and other correspondence between NAMA and Lazard on the sales purchase of Project Eagle. It will be interesting to see if NAMA will release this information or hide behind the excuse of commercial sensitivity. This is information that a commission of investigation could demand. NAMA's legal advisers on the transaction were a London firm, Hogan Lovells, which it paid £1.8 million.

It would be interesting to see all the legal advice given to NAMA by this firm regarding the sale. I wonder if it was aware of the STG£5 million fee for Frank Cushnahan that PIMCO was set to pay and just what did Hogan Lovells do for that STG£1.8 million? It is nice money if one can get it. I have also requested from NAMA, under freedom of information, all e-mails and any other correspondence between NAMA and Hogan Lovells on the sale-purchase of Project Eagle.

The Government has referred to the long-awaited report of the Comptroller and Auditor General on Project Eagle. This report will examine whether NAMA achieved the best possible return for the taxpayer in the sale of Project Eagle. It will not be examining the governance of NAMA in regard to the deal and whether it was executed in a fully legal and transparent manner. It will not be investigating the role played by the former NAMA employees, Frank Cushnahan and Ronnie Hanna.

In a written reply to me on 28 October 2015, NAMA stated that "Ronnie Hanna was a senior executive who joined NAMA in 2010 who acted professionally and diligently during his time at NAMA." This is the same Ronnie Hanna who is currently on bail in Northern Ireland for fraud offences relating to his role in Project Eagle. NAMA threw Frank Cushnahan under the bus when it had no other option but it cannot do the same to a man who held the role of head of asset recovery for four years in the agency.

From figures available it appears there was an enforcement rate of between 7% and 8% against NAMA's borrowers in Northern Ireland compared to a 27% rate for NAMA borrowers in the Republic of Ireland. Why does the Minister think that a NAMA client down South was nearly four times more likely to be foreclosed upon? Why did NAMA treat business people in the Republic of Ireland almost four times less favourably than those in Northern Ireland? Is it possible that Frank Cushnahan or Ronnie Hanna might have had anything to do with that?

The sale and purchase of Project Eagle by NAMA to Cerberus involved some of the biggest players in this country, both North and South as well as the United States, as many of these players have a vested interest in ensuring that a commission of investigation never takes place. Those involved in the deal include Cerberus, PIMCO, Fortress, Brown Rudnick, Tughans, Lazard, Hogan Lovells, A&L Goodbody, Linklaters, the Northern Ireland Law Society, the Northern Ireland Department of Finance, the Office of the First Minister of Northern Ireland, the Department of An Taoiseach and the Department of Finance, not to mention the many property developers who were involved in this whole process.

I would like to know why Fianna Fáil changed its mind on seeking a commission of investigation. I find that incredibly interesting. Has some sort of deal has been done with the Government or did some of these large powerful bodies get to it. I would love to know. If this Government refuses to initiate an investigation into Project Eagle, we will never uncover the true role played by NAMA in the sale of Project Eagle. If the Government refuses to initiate an investigation into Project Eagle, how can we be certain that similar loan sales which followed Project Eagle, such as Project Arrow to Cerberus, were conducted in a legal and transparent manner? Unless a commission of investigation is initiated, all work by Ronnie Hanna in his four years of head of asset recovery in NAMA will forever be under scrutiny.

To return to Fianna Fáil, I cannot believe it has changed its position on this matter. Anyone who reads its amendment will see its excuse for not seeking a commission of investigation. It is saying now that it wants all investigations completed before we have one. First, NAMA is not being investigated by anyone at the moment. Second, the National Crime Agency, NCA, in Northern Ireland or the Securities and Exchange Commission in America are in different in jurisdictions. If we had a commission of investigation it would not interfere one iota with theirs.

On 21 October 2015, Deputy Michael McGrath stated: "I am more convinced than ever that a full commission of investigation into Project Eagle is required." He further stated: "The committee [the Committee of Public Accounts] cannot get to the bottom of this issue because they can only go so far. A full statutory commission of investigation with extensive powers is required." He also stated: "The Government is hiding behind the Comptroller and Auditor General's value for money review of Project Eagle, the purpose of which is to ascertain whether the transaction delivered value for money."

I have checked the legal advice side and I am told that all investigations will not be complete for at least three years. Are we going to postpone doing anything about what is going on in Dublin for three years? Is this serving the Irish public and Irish taxpayers properly? There are huge concerns around what is going on? The Minister is not going to make them go away without a commission of investigation. I got legal advice on this and part of it states that the only criminal proceedings that are currently under way are in a different legal and territorial jurisdiction under UK law and deal even with a different subject matter. It also states the investigation of a commission in the Republic would focus on NAMA activity and any failure to act in the public interest of the Republic's citizens and any failure by NAMA to comply with its duties; the extent of involvement and awareness; and any failure in supervision or oversight by the Department of Finance and the Minister for Finance in the Republic. It further states this is a wholly different perspective and subject matter than the focus of the investigation in the North and, as such, is much too far removed to pose any real risk of endangering these criminal proceedings.

The Fianna Fáil amendment to the motion is explicit in this regard and notes that: "NAMA have advised that the UK NCA has confirmed that no aspect of the Agency's activities are under investigation". There is very little risk of an overlap and there are no solid grounds for Fianna Fáil attempting to hide behind this argument as justification for its support of the Government position that no commission of investigation is necessary despite the admission in Fianna Fáil's amendment that there are ongoing and legitimate concerns regarding aspects of the sale by NAMA of the Northern Ireland loan portfolio, Project Eagle.

It stinks to high heaven. I believe 100% that the Minister believes that as well.

See this speech in context