Written answers

Thursday, 16 January 2014

Photo of Seán FlemingSeán Fleming (Laois-Offaly, Fianna Fail)
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11. To ask the Minister for Finance his views on the impact of recent allegations regarding the alleged leaking of confidential information from the National Asset Management Agency on the organisations ability to fulfil its mandate; the way security of information can be guaranteed within NAMA; and if he will make a statement on the matter. [1633/14]

Photo of Michael NoonanMichael Noonan (Limerick City, Fine Gael)
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The Deputy, as a member of the Dáil Committee of Public Accounts (PAC), will be aware that the Chairman and Chief Executive of NAMA appeared before that Committee on 20th December 2013 and robustly defended the Agency against allegations that had been circulated to certain outlets in the media and to certain members of the Oireachtas during the preceding week.

The NAMA Chief Executive stated clearly that the allegations, in so far as NAMA had knowledge of them, were unsubstantiated. The NAMA Chairman stated clearly that NAMA has no tolerance for misdemeanour or any wrongdoing and that where it is made aware of any complaint, it fully investigates it and, if appropriate, refers the matter to the Gardaí.

I am advised by NAMA that it will fully and robustly continue to defend its position in relation to any allegations made against it in such proceedings, and I am further informed that NAMA has a 100% track record in defending any such cases.

Members of this House will be aware that s.19 of Criminal Justice Act obliges anybody with information which might be relevant in the context of the potential commission of an offence by any person, to disclose that information to a member of An Garda Siochana, and this section makes it an offence not only to fail to disclose that information, but to fail to disclose it as soon as it is practicable to do so.

Valuations

Amongst the allegations was a claim that NAMA engaged in a deliberate process of manipulating the valuation of property which was collateral for its acquired loans. NAMA refuted this allegation and set out their position during the PAC proceedings in December. The NAMA Chief Executive indicated that NAMA did not in fact set the property valuations and that the entire valuations process was subject to extensive independent auditing, including on behalf of the European Commission and by the Comptroller and Auditor General. I note that the Comptroller and Auditor General, Mr McCarthy, also advised the PAC that he could not see on a broad scale how there could have been any undervaluation of loans acquired by NAMA given the Agency’s approach to securing independent valuations.

Safeguards to protect the confidentiality of information

There are extensive safeguards in place to protect the confidentiality of information held by NTMA employees, including those assigned to NAMA. Employees assigned to NAMA by the NTMA, as is the case with all NTMA staff, are subject to Section 14 of the National Treasury Management Agency Act, 1990 which prohibits an employee from disclosing any information obtained while carrying out their duties as employees of the NTMA. Employees assigned to NAMA are also subject to a prohibition on release of confidential data under Sections 99 and 202 of the NAMA Act 2009. All NTMA employees, including those assigned to NAMA, are subject to the Official Secrets Act. Contravention of these prohibitions is a criminal offence. On conviction there is a fine not exceeding €5m and/or imprisonment for a term not exceeding five years. These protections do not cease at the point of resignation but rather apply indefinitely and extend to former employees.

The NAMA Chairman outlined to the PAC in December that NAMA has enhanced IT arrangements in place that limit access to information: access for staff is now confined and limited only to the information that the individual needs to do his or her work on a day-to-day basis. The NAMA Chairman also pointed out that there is an extensive audit trail right across NAMA IT systems in respect of e-mails and documentation making it possible for NAMA to track access and printing of documents. The NAMA Chairman added that while the NAMA systems are now well advanced, the Board remains focused on continual improvement.

Progress

I would like to draw the Deputy’s attention to the NAMA’s 2013 End-of-year Review, which was published on the 3rd of January and which details the continued significant progress that the Agency is making by reference to the objectives set for it by the Oireachtas; it is also available on NAMA’s website www.nama.ie. This includes the generation of €16.5bn in cash inflows from inception to end-December 2013, some €5.8bn of which was generated in 2013, and the repayment of €7.5bn or one quarter of its senior debt by end-2013. The achievement of its first major debt repayment milestone is very significant, not only for NAMA in terms of its own progress, but also because it was a key Troika target and it reinforces, at a critical time in our recovery, the very positive international perception that Ireland as a country is resolute in addressing its difficulties and meeting its targets. I also point out that NAMA has generated sufficient cash reserves to cover its costs, including debt interest and loan servicing fees. It is important to note that NAMA is self-funding and does not draw on the Exchequer and therefore is not a burden for the Government in the context of its annual budgetary arithmetic. NAMA is also in a position, as a result of its strong performance, to invest in various commercial and residential projects which, when completed, are expected to yield returns to assist the economy.

Conclusion

When addressing the PAC, the NAMA Chairman made clear the NAMA Board’s determination that the Agency will not be deflected from achieving its objectives by the circulation of allegations designed to serve not the interest of Irish taxpayers but rather the narrow interests of individuals who are in dispute with the Agency. Members of the House should, I believe, consider carefully what both the NAMA Chairman and Chief Executive have had to say on this matter. NAMA has been the subject of efforts to spread damaging and unfounded stories about it in the past. At no stage since its inception has NAMA been deflected by these efforts from doing its work on behalf of Irish taxpayers and I fully accept the NAMA Board’s commitment that it will not allow itself to be so deflected now or at any time in the future. I would regard it as a more serious matter if NAMA was not being criticised but rather was being universally praised by debtors and others as this would tell an altogether different story of how NAMA is working to recover monies for the State. By necessity NAMA has to have a hard edge in the work it does.

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