NTMA chief warned Lenihan not to let Nama distort pay rate

Mon, Dec 6, 2010, 00:00

NATIONAL TREASURY Management Agency chief executive Michael Somers warned the Minister for Finance Brian Lenihan in October 2009 that staff to be hired for the National Asset Management Agency should not be paid at a level that would “distort the pay rates elsewhere in the NTMA”.

In a letter released under the Freedom of Information Act, Dr Somers, then NTMA chief executive, raised concerns about the terms under which Nama staff would be recruited through the NTMA and their remuneration.

Dr Somers, who left the NTMA in November 2009, wrote to Mr Lenihan on October 27th, 2009, saying the agency would “make every effort to provide resources to Nama as you have directed”.

He said, however, that the NTMA should wait until the Nama board had been appointed and the agency’s business plan determined before deciding what type and number of staff were required.

Otherwise it “could give rise to some tension if the NTMA were to present them with a fait accompli in terms of staffing”, he wrote.

Staff would be hired for Nama on “a project-determined period, rather than for a fixed term or an indeterminate period”, he said.

“This may be a drawback for persons already in permanent employment. Issues such as what happens to existing NTMA personnel who might wish to work with Nama when Nama expires and the superannuation arrangement will need to be addressed.”

Several NTMA staff moved to Nama, including Brendan McDonagh, the chief executive of the loans agency, after it was set up last year to take the most toxic loans out of the banks.

Dr Somers, a Government-appointed director at AIB since he left the NTMA in November 2009, has been an outspoken critic of Nama, saying he had been sceptical about it “from day one”.

He has also raised concerns about the workload being put on the NTMA as a result of the Government’s decision to set up the toxic loans agency under its remit.

In his letter, he said the NTMA’s role in Nama is “quite different to that for any other functions added [to the NTMA] over the years and is limited to providing staff and other back-up services”.

“Apart from having a seat on the board, it will have no responsibility for or involvement in the policy and activities of Nama.”

Dr Somers, who was the highest paid public servant in 2008 on pay of €1 million, warned Mr Lenihan that it would take time to hire for Nama which had substantially more staff than four other businesses set up under the NTMA.

The letter was released following an appeal by The Irish Times to the Information Commissioner over the Department of Finance’s refusal to release seven letters between the Minister and the former NTMA chief executive.

The department released three of the letters, one partially.