Gerry Horkan (Fianna Fail) | Oireachtas source

I thank the Minister of State for joining us again in the House. He is getting quite used to being here on various matters. Fianna Fáil supports this motion and a commission of investigation into the sale of NAMA's Northern Ireland loan book, known as Project Eagle. This was agreed by the Government last autumn and the commission of inquiry will be the responsibility of the Taoiseach, as it would obviously not be appropriate for the Department of Finance and its Minister to be responsible for investigating something in which they were involved from the start.

We support the gradual and responsible winding down of NAMA, which will involve the paying off of the debt NAMA holds and returning a surplus to the taxpayer. That will involve the gradual and responsible selling of assets currently owned by NAMA. As we know, NAMA was established in 2009 to acquire impaired property loans from banks, protect or enhance the value of those assets and to dispose of them over time. In doing so, NAMA was required to obtain the best achievable financial return for the State. The figure of €74 billion is regularly mentioned in reference to NAMA but it would be unfair to say the €74 billion should have been recovered. Equally, if there is €74 billion in book value written down to €31 billion, with €32 billion being realised, there may be a theoretical surplus but it still results in a very significant loss to the State and, ultimately, to all of us.

The Minister of State mentioned that NAMA issued debt amounting to €31.8 billion, of which €30.2 billion was senior debt and €1.6 billion was subordinated debt. That was guaranteed by the State. NAMA’s objective is to redeem senior debt in full by 2018 and up to the third quarter of 2016, €26.6 billion has been redeemed. It looks as if NAMA is on target to redeem its debts as issued of €31.8 billion, which is a definite positive, as people might have said at the time. It is great that it is going to exceed it somewhat. We all know assets were sold in 2012 and 2013 that were ultimately flipped for multiples of their value, so it is unfortunate that certain speculators managed to make the gain rather than the State. There was a particular office building in the Dublin docklands that was sold by the State for €13 million and then flipped a year or two years later for €100 million. It would have been preferable if NAMA had held on to the asset for a couple of years longer. Again, hindsight is wonderful.

There have been issues with NAMA. People went through years of austerity in part because of the funding required for NAMA and as a result of the banking crisis. The extensive write-down of the debt from €74 billion left us with a big black hole that the taxpayers ultimately had to fill. This meant that taxes rose and services had to be cut to fill the gap. This cost came to approximately €60 billion and pushed Ireland into a bailout. Many of the issues were not restricted to NAMA and related to Government policy and specifically the way in which the Government failed to put in place adequate consumer protection when NAMA sold some of the loans to private vulture funds. It was only as late as 2015 that the Government responded to this and by that time, most of the loans had been sold to vulture funds and borrowers, homeowners and small and medium enterprises, SMEs, were left significantly exposed. Today, some 14,000 mortgage holders have their loans owned by unregulated entities and the Central Bank does not know how many SMEs have their loans owned by such unregulated entities.

With many assets it is suggested that the Minister for Finance instructed NAMA to sell assets sooner rather than later. This direction meant that NAMA did not make as much money as it otherwise would have had. To be fair, the Minister, Deputy Noonan, denies ordering NAMA but admits to advising the agency. In his view, the sale of NAMA assets facilitated Ireland’s return to international markets. Ultimately, NAMA may have received more of a return if it waited but it would not have received the €74 billion.

With Project Eagle there has been a significant loss and the Minister of State outlined much of it in his opening remarks. The sales process has been a matter of considerable debate involving the Comptroller and Auditor General, the Committee of Public Accounts and, ultimately, the Dáil and Seanad. There was a significant debate in the Dáil in March that was marred by the Minister, Deputy Noonan, questioning the integrity of the Committee of Public Accounts, which distracted from the findings on Project Eagle. This attack revolved around Deputy Noonan’s own meeting with Cerberus on the eve of the closing bid date for Project Eagle and was unhelpful, to say the least, to the process. The report never suggested that Deputy Noonan influenced the sale but rather that it was procedurally inappropriate. This effectively means that it was ill-judged. Despite the fact that only two paragraphs of the 102-page report referred to the meetings, the Minister, Deputy Noonan, focused heavily on that point.

There were also issues relating to advisers to the Northern Ireland advisory board of NAMA relating to Cerberus and PIMCO, along with certain individuals. We all know the topic involved and although I will not mention individual names, I have no doubt Mr. Justice Cooke will examine these issues. I wish all of those involved in the commission well in their efforts to get some answers to fundamental questions that remain outstanding. I welcome the report but it is important that when we consider any report and commission, we get a timely and efficient report. We want everything investigated accurately and properly. We do not want what we could have had in the past, with tribunals going on for 15 or 20 years and nobody ending up punished for actions if found not to have served the State well.

I welcome the motion and my party will support it. I certainly hope the first module of this commission of investigation on Project Eagle will be satisfactory for the interests of all taxpayers and people in this State. If further modules are required, so be it, although I do not wish for it. I hope more issues are not uncovered, although the likelihood is there is a possibility of it happening.