A DUBLIN committee that examined the sale of NAMA’s Northern Ireland loan book knows as Project Eagle has concluded the agency’s strategy was “seriously deficient”.
The sale led to a recorded loss of £162m, while NAMA recorded losses totalling €800m in respect of its Northern Ireland loan portfolio between 2010 and 2014.
The Public Accounts Committee report said the process was not well designed and involved failures of corporate governance.
One adviser, Frank Cushnahan, should have been removed from NAMA’s Northern committee and key elements of the sale were influenced by one of the bidders, US firm PIMCO.
Cushnahan was arrested last year by the National Crime Agency which is investigating his involvement in the loan book sale and allegations he was to be paid a £1 million ‘fixer’s fee’.
Following publication of the report, a NAMA spokesperson said: “It was the Board’s commercial and considered judgement, in full knowledge of the financial implications, that the sale of the Project Eagle loan portfolio provided a better financial outcome than any alternative monetisation strategy.
“That was the Board’s view in 2014 and it remains the Board’s view today”.
The PAC report also finds it was not as it put it “procedurally appropriate” for Minister for Finance Michael Noonan to meet with Cerberus, the investment firm that ultimately bought the portfolio, as it could have given the perception of preferential treatment.
This conclusion was disputed by Fine Gael members of the committee who voted against the finding in the first such division since PAC was established.
At the press conference there were clashes between Fine Gael members of the committee and other politicians regarding the role of Mr Noonan.
Mr Noonan’s meeting with Cerberus was criticised by Social Democrat TD Catherine Murphy and Sinn Féin’s David Cullinane.
However, Fine Gael’s Peter Burke said using the phrase procedurally inappropriate was “unfair”, adding he disagreed with the finding.
Sean Fleming said NAMA had failed to demonstrate to the committee that it had achieved value for money for the taxpayer on the sale of project Eagle.
The report found that NAMA’s decision to destroy and not retain contemporaneous notes of meetings had undermined its ability to explain and account satisfactorily for its decision-making process to the PAC.
The report includes a letter from the Minister for Finance in which he strongly contests that finding.
Last month, Mr Noonan wrote to the Public Accounts Committee seeking a right of reply regarding adverse opinions about him in its report.
In his letter, Mr Noonan said his meeting with the US fund Cerberus immediately before it bought NAMA’s portfolio was not inappropriate.
He said the fund was represented by its chairman John Snow, a former US Treasury secretary.
Mr Noonan said it would be unusual for ministers not to meet such notable individuals and there was never any special treatment of Cerberus.
In his letter, Mr Noonan said there was a “legal separation” between his role as Minister for Finance and NAMA’s commercial operations.
He added: “My meeting with former secretary John Snow and my officials’ meeting with Cerberus representatives in March 2014 did not alter the fact that neither I nor my officials were involved in the Project Eagle sales process.”
Mr Noonan’s letter concludes by saying that he was sure that any conclusions which do materialise in the final report will be based on “available evidence, due and fair process and logical reasoning which will withstand challenge.”
Today, following the publication of the report, Mr Noonan said he refuted “absolutely the validity of any suggestion that I or my officials acted inappropriately in meeting with Cerberus in March 2014.
“At no point was I or my officials invited to discuss this meeting at the PAC nor was the alleged impropriety of this meeting raised in follow-up correspondence.
“The note of the meeting with Cerberus is on the Department of Finance’s website and is clear in stating that any issue relating to NAMA should be raised directly with NAMA.”
Mr Burke said he had a personal concern there were so many investigations into Project Eagle that there may not be merit in a Commission of Investigation into the transaction.
His position contrasted with other members of the committee, who have called for a full Commission of Investigation.
Meanwhile, Mr Fleming said he understands Mr Noonan will want to “vigorously defend” the PAC findings, but that the public will make up their own view about what happened.
Mr Fleming said that while Minister Noonan was not involved in the commercial transaction, it was the biggest sale of a State assets – with a £1.3 billion sterling reserve price – and that NAMA is accountable to him as minister on a regular basis.
Mr Fleming said that it was “remarkable” that in a meeting with the PAC for close to five hours Mr Noonan did not mention the fact that he met the chairman of Cerberus 24 hours before the bid closing .