Updated 14 March 2017.
Originally published September 2016
THIS AFTERNOON, THE Public Accounts Committee published its long-awaited report into the sale of the Project Eagle loans portfolio.
It was one of the biggest moments in the long-running story of the sale of Nama’s northern loan book, and found that the sales strategy for the sale was “seriously deficient”.
After the report was released, Michael Noonan refuted the suggestion that he ‘acted inappropriately’ over the loan book’s sale.
Here’s a refresher course on the story behind the controversial agency’s most controversial land deal:
In the wake of the worst property crash in living memory, the Irish government creates the National Asset Management Agency (NAMA) which purchases Ireland’s distressed property loans from the ailing Irish banks at a discount in return for government bonds in an attempt to stabilise the tanking economy.
Once established, a Northern Ireland Advisory Committee (NIAC) is set up within the agency to deal with the region’s loan book.
The agency’s acquired Northern Irish properties are known collectively as Project Eagle. Nama initially acquires the distressed portfolio for about €1.2 billion in 2010.
Northern Irish Finance Minister and Democratic Unionist Party (DUP) MLA Sammy Wilson informs his counterpart from south of the border Michael Noonan that he has been contacted by interested buyers with a view to purchasing the northern loan book.
Nama is contacted by law firm Brown Rudnick, representatives of US group Pimco, to state Pimco’s interest in buying the portfolio.
Sammy Wilson’s nominee to Nama’s Northern Ireland Advisory Committee (NIAC), businessman Frank Cushnahan, resigns from the committee citing personal reasons.
Nama officially places a ‘for sale’ sign on Project Eagle and invites bids from prospective buyers.
Pimco informs Nama that it will pay £15 million (€17.6 million) in ‘success fees’ to Cushnahan, Brown Rudnick, and another Belfast law firm, Tughans, should it be successful in purchasing Project Eagle. It then promptly pulls out of the bidding.
Tughans and Brown Rudnick switch their attentions to US property fund Cerberus Capital Management.
Meanwhile, on 25 March Northern Irish First Minister and DUP leader Peter Robinson meets with former US vice president Dan Quayle, the chairman of Cerberus, together with Ian Coulter, a partner at Tughans.
On 31 March, Irish Minister for Finance Michael Noonan himself meets with Cerberus. The appropriateness, or otherwise, of this meeting will dog a Public Accounts Committee (PAC) inquiry into the sale two years later.
Cerberus secures the sale of Project Eagle for about €1.6 billion.
Coulter resigns from his post at Tughans.
On 2 July Wexford TD, and former property developer, Mick Wallace tells the Dáil that £7 million (€8.2 million) was due to be diverted from Tughans to an Isle of Man bank account for the benefit of a Northern Irish politician or party. This money was “intended to facilitate payments to deal-makers involved in the sale”, according to the BBC.
The following day Tughans says that Coulter had left the company following a row over the diverted money, and that the money was subsequently recouped.
Wallace claims that the €1.6 billion sale undervalued the Project Eagle portfolio by as much as €3 billion.
On 7 July both the Dáil’s Public Accounts Committee (PAC) and its Northern Irish equivalent announce inquiries into the loan sale. Two days later the PSNI launches its own investigation.
On 10 July Nama tells the PAC that Cushnahan and Tughans / Brown Rudnick were to split the Pimco payment of £15 million between them.
Coulter subsequently breaks his silence and denies that any politician received any money from the Project Eagle deal. First Minister Peter Robinson likewise denies that either he or his family had benefited in any way from the deal.
US firm Cerberus tells the Northern Irish finance committee that it had no knowledge of any of the goings-on at Tughans, and that it paid Brown Rudnick directly. The US Department of Justice begins investigating the Project Eagle deal.
On 10 September, Peter Robinson stands aside as Northern Ireland’s First Minister in the political fallout of an investigation surrounding the murder of ex-IRA prisoner Kevin McGuigan.
On 23 September, Jamie Bryson, a Loyalist blogger, tells the committee that five people were set to benefit from the sale, including now former First Minister Peter Robinson. Robinson denies the claim and then threatens to sue Mick Wallace over a tweet the TD sent in relation to Robinson and Nama.
Nama accuses Mick Wallace of being ‘utterly disingenuous’ regarding the Project Eagle sale. Wallace for his part then accuses Taoiseach Enda Kenny of a cover-up concerning another Nama loan deal, Project Arrow, concerning €6 billion worth of property in the Republic, with Cerberus once again in pole position to secure the deal.
On 18 August, Sinn Féin MLA Daithí McKay resigns from the assembly over allegations that he ‘coached’ Jamie Bryson before he made the allegations about Peter Robinson before the north’s finance committee in September 2015
On 6 September, an edition of the BBC’s Spotlight broadcasts a secret recording of Frank Cushnahan allegedly accepting a £40,000 payment from a Nama borrower in 2012, when he was still working for the agency.
The programme claims Cushnahan said he would use his “insider status” to help ease the borrower’s financial problems.
The C&AG’s report into the sale is published on 14 September.
It finds that Nama lost €220m on the sale of the loan book. The findings of the report are categorically rejected by Nama.
The C&AG report finds that Nama had over-discounted the loans, giving 10-15% discounts where 5.5% would be more applicable. It adds that NAMA did not keep an “adequate record of key decisions and events even though the sales process deviated from standard”.
Frank Daly, Nama’s chairman, says that the agency had done its utmost to achieve the best price possible.
In advance of its publication Michael Noonan claims there was “nothing improper” and “nothing illegal” concerning the sale of Project Eagle.
It is announced on 15 September that there will be a Commission of Investigation into Nama over Project Eagle.
PAC invites Peter Robinson and martin McGuinness to appear over the loanbook sale.
On 29 September, Nama chairman Frank Daly appears before the PAC. He defends the organisation’s sale of Project Eagle, saying that it was the best deal the organisation could have got. Again, the findings of the C&AG report are rejected.
Finance Minister Michael Noonan answers questions over the Nama Project Eagle sale on 6 October. It’s rare to see a sitting minister appear before the Pac like this.
He tells the PAC that the sale of Project Eagle was the decision of the Nama board alone and he had no legal grounding to be involved in the process.
On 18 October, Nama appear before the PAC, and it doesn’t go well. TDs criticise Nama’s paper trail, their “rushed” sale, and response to Frank Cushnahan crisis.
The Public Account Committee’s report, released on 14 March, claims that Nama lost €800m in relation to the loan portfolio between the years 2010 and 2014.
It describes the sale strategy as being “seriously deficient”.
It also claims:
- The failure to remove controversial businessman Frank Cushnahan from the agency’s northern advisory committee was “a failure of corporate governance” (Cushnahan resigned from the committee in November 2013 citing “personal reasons”
- Key elements of the sale were “influenced” by the US firm Pimco, which made the initial approach to Nama with regard to the sale of the portfolio
- Nama has been unable to demonstrate that it got “value for money” in the sale
The report includes, among other things, a strongly worded letter from Minister for Finance Michael Noonan to the committee contesting its suggestion that his meeting in March 2014 with the US fund Cerberus (which eventually bought the portfolio in April 2014 for €1.6 billion) was “inappropriate”.