Dáil debates

Thursday, 29 September 2016

Ceisteanna - Questions - Priority Questions

NAMA Assets Sale

1:45 pm

Photo of Pearse DohertyPearse Doherty (Donegal, Sinn Fein)
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2. To ask the Minister for Finance if he will direct NAMA to suspend all sales processes under way in respect of an organisation (details supplied) in view of the Comptroller and Auditor General's report on the sale of the organisation and the forthcoming commission of investigation. [27797/16]

Photo of Pearse DohertyPearse Doherty (Donegal, Sinn Fein)
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Will the Minister say whether he accepts the Comptroller and Auditor General's report on the sale of Project Eagle without condition? The question I tabled relates to that. It asks the Minister to use his authority under the National Asset Management Agency Act to direct the National Asset Management Agency, NAMA, to cease or suspend all sales processes under way in respect of Project Gem, a €3 billion asset portfolio it expects to sell before the end of the year, in light of what the Comptroller and Auditor General said in his report and also in light of the fact that the Government has finally agreed to set up a commission of investigation into areas of NAMA.

Photo of Michael NoonanMichael Noonan (Limerick City, Fine Gael)
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It is important to recognise that in no way has the integrity of NAMA or the NAMA board or the integrity of its decisions been brought into question, so I have no intention of directing NAMA to halt sales activities. To do so would irreparably damage NAMA's positive contribution to our recovery and damage our reputation as a credible, open and transparent market. By extension, any such interference would be detrimental to the interests of Irish taxpayers. In particular, it would likely: constitute the State taking direct control of NAMA and bringing NAMA debt onto the State's balance sheet; imply a U-turn for the Irish sovereign in the eyes of the rating agencies, the sovereign bond market and broader investor community, potentially increasing the cost of Government debt and damaging confidence in the recovery of our economy; raise competition concerns which may limit NAMA's ability to recover value for the State from its assets; reduce the surplus currently projected by NAMA to be returned to the Exchequer; and negatively impact NAMA's ability to fund the delivery of residential and commercial units on a commercial basis.

We must also remember that section 9 of the NAMA Act is unambiguous when it states that NAMA is independent in the performance of its functions. Section 12 of the Act bestows the NAMA board with the power to "sell or dispose of the whole or any part of the property or investments of NAMA, either together or in portions, for such consideration and on such terms as the Board thinks fit". Clearly, from the outset the Oireachtas agreed that political interference in NAMA's independent commercial activities was highly undesirable as such interference 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.

To return to the Deputy's specific question, the Comptroller and Auditor General has raised issues for further discussion, but he has not raised any systemic concern about NAMA and its operations. He has not suggested halting its activities. The opinions expressed by him in his report, on which there is public disagreement, are being examined by the Committee of Public Accounts. With representatives of NAMA, he is appearing before the committee today to discuss the report. The committee is the appropriate forum in which to consider his report and engage in the exercise of seeking public accountability in these matters. The Government recognises that it has its own responsibilities in all matters of public concern to do with the functions of an important public body such as NAMA. As the Deputy will be aware, the Taoiseach has met Opposition party leaders with a view to seeking agreement on issues of public concern that may require further investigation and the most appropriate nature and terms of reference of such an investigation. Subject to the outcome of these discussions, the matter will be the subject of a Dáil debate. The Government's objective is to ensure all matters of public concern will be addressed in a speedy and effective manner.

1:55 pm

Photo of Pearse DohertyPearse Doherty (Donegal, Sinn Fein)
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What is most interesting about what the Minister has said is what he did not say in response to the direct question I put to him, which was whether he unconditionally supported the report produced by the Comptroller and Auditor General on the sale of Project Eagle. He has refused so far to stand up and say he accepts it unconditionally. He says it would bring NAMA debt onto the books. That is complete nonsense. We are looking for him to use his powers of direction under the National Asset Management Agency Act to suspend the sale of Project Gem. He has used these powers on a number of occasions such as in the case of the Anglo Irish Bank promissory note, in respect of which he directed NAMA. We have a report from the Comptroller and Auditor General which I accept. We will find out whether the Minister accepts it. It states there was a possible loss to the taxpayer of €220 million. The Taoiseach is now saying he believes there is a need for a commission of investigation into some of the operations of NAMA, a position which is supported by us in opposition and something for which we have been arguing for a while. There are tapes which we have seen on the "Spotlight" programme on which there is talk about fixer's fees and senior people in NAMA are named as providing information on NAMA debtors and potential bidders. For the Minister to say there is no issue relating to the integrity of decision-making in NAMA is farcical. He must intervene on behalf of the taxpayer to make sure the sale is suspended until we sort out this issue and reach a clear conclusion on the matters at hand.

Photo of Michael NoonanMichael Noonan (Limerick City, Fine Gael)
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I have served as Chairman of the Committee of Public Accounts and worked closely with different Comptrollers and Auditors General. I have great respect for the work they do. I also have great respect for NAMA, the chairman of the board and the chief executive who have carried out their functions in accordance with law. No charge of irregularity, wrongdoing or improper behaviour has been laid against NAMA. There is clearly a conflict between the position taken by the chairman of NAMA on behalf of its board and the report of the Comptroller and Auditor General. There are a number of conflicts about the process and timeline in the disposal of Project Eagle, but the principal conflict that would cause a variation in the estimated value involves the different approaches taken to discounts. That discrepancy is being addressed by the Committee of Public Accounts. I will appear before it next Thursday and answer all of its questions.

Photo of Pearse DohertyPearse Doherty (Donegal, Sinn Fein)
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It is clear that the Minister is unwilling to accept the findings of the report of the Comptroller and Auditor, which in itself is a major issue in terms of the constitutional nature of the office. Even if the Minister does not accept the report and just says there are discrepancies, in the light of these discrepancies and their severity, the fact that the Comptroller and Auditor General believes there was a potential loss of €220 million, the fact that issues concerning a conflict of interest were reported to NAMA and not followed up and the fact that many other issues are raised in the report, there is an obligation on the Minister to act. He is the only person with the authority to say to NAMA "listen folks, pause. There is a serious issue here. The Comptroller and Auditor General is saying you lost the Irish taxpayer €220 million. You cannot proceed with the sale of a €3 billion asset that is owned by the Irish people. We have to clear this up." The Minister needs to use his discretionary powers. On 15 April 2014, within days of NAMA deciding to sell Project Eagle to Cerberus, I asked about the number of bidders and the process involved, but the Minister stonewalled me in the answer he gave to the House. He knew at the time about fixer's fees and that Pimco had had to pull out. He must now step up to the plate. His actions in the past two years in dealing with this issue do not warrant glory, but he now needs to do the right thing. He needs to suspend the sale of Project Gem in the interests of the taxpayer who could lose more money if the inappropriate form of evaluation used by NAMA in the case of Project Eagle is used in the case of Project Gem.

Photo of Michael NoonanMichael Noonan (Limerick City, Fine Gael)
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The Deputy is doing what his party has done in Northern Ireland. He is trying to use the issue to damage his opponents politically. The Sinn Féin chairman of the committee in Northern Ireland corrupted the inquiry by coaching a witness to cause damage to the former First Minister. I advise the Deputy very strongly not to do the same in this House. I am going before the Committee of Public Accounts next Thursday and will answer its questions. Representatives of NAMA appeared before it this morning when the Comptroller and Auditor General also gave evidence. Others are being called. The Taoiseach has consulted Opposition leaders and we will see where things go in seeing whether there are other issues to be inquired into after the Committee of Public Accounts has completed its work. We can all deal with the issue in a very fair way, but the Deputy is trying to turn it into a series of political allegations against the Government and me personally. Sinn Féin wrecked an inquiry in Northern Ireland and corrupted its report by the actions taken by the chairman. It should not try to do the same here.