€72bn Nama 'investment' just none of our business

BRENDAN HOWLIN’S attempt to blame the Referendum Commission for the failure of the referendum on Oireachtas powers of investigation was pathetic.

The commission was given the final wording of the proposal on October 3rd and then given less than a week to produce the definitive arguments in favour and against. Opponents of the referendum were not wrong to argue that the Government’s handling of the debate was in itself the best argument for not trusting politicians.

But we still badly need an Oireachtas with the power to ask questions on behalf of the people. Here’s why.

Nama is by far the biggest public project ever undertaken by the State. Remember the outrage that greeted Bertie Ahern’s proposal to spend €1 billion on his pet sports stadium and campus? Remember how much media coverage that got? Now multiply that number by 32 – that’s the amount of public money that’s directly at stake in Nama. How much do we know about how that money is being used? Very little – and by “we” I don’t mean journalists or the average punter in the street. I mean the body legally obliged to oversee public expenditure, the Public Accounts Committee (PAC) of the Dáil.

As Jad Singh of the excellent Nama Wine Lake blog pointed out to the committee last week, Nama is disposing, in terms of the original value of the bank loans involved, of €500 million worth of property a month, every month. Singh outlined just some of the things the committee, and therefore the rest of us, cannot know about these vast transactions: the gross and net profit margins, how the price achieved compares with the market as a whole and the “carrying costs” (ie insurance, maintenance, management fees etc) associated with each property.

But wait. Some of the more informed readers may have in the back of their minds a recent memory of an independent review of the way Nama is functioning. Didn’t Michael Noonan tell us that he had insisted on such a review? And indeed it has actually happened.

I can tell you one thing about the review. It was carried out by Mike Geoghegan, the recently retired chief executive of HSBC bank. In that role, he was paid £3.5 million plus £5 million worth of shares for 2007, a year for which the bank also took a charge on its accounts of $17 billion for bad loans.

What I can’t tell you are two things: why on earth Michael Noonan thought it would be a good idea to ask a classic fat cat banker to review Nama on our behalf and what Geoghegan’s review actually came up with.

Last week, the committee was told something that would, in any self-respecting democracy, be astonishing: Geoghegan’s review of Nama is a secret. Not only is it a secret, indeed, but Geoghegan explicitly accepted the task of conducting the review on the condition that it would be entirely private.

A few weeks ago, Simon Carswell reported in The Irish Times that the Geoghegan review had been presented to the board of Nama. Carswell quoted an outgoing member of the Nama board, Peter Stewart as saying: “I believe the Geoghegan review should be a watershed in the life of Nama and I hope that its recommendations will be fully implemented.”

So here’s a “watershed” report on the largest project in the history of the State. Except, it turns out, there is no report.

Nama chairman Frank Daly told the committee last week that Geoghegan has written nothing down. His report has been delivered verbally to Michael Noonan and to the Nama board. The “watershed” review of Nama is, in other words, a chat between a banker who was steeped in the culture of grotesquely excessive entitlement, the Minister and the people who are already tucked in under the covers at Nama.

And what did this chat consist of? Sorry, that’s a secret. Frank Daly refused to tell the PAC what Geoghegan recommended – his conclusions “cannot be disclosed”.

To call this contemptuous of the public whose money is at stake in Nama would be a gross exaggeration. To have contempt for something, you must first acknowledge its existence. But here the public, the citizens, simply don’t exist. We are entirely irrelevant. We’ve put up €72 billion for the Nama process (€32 billion for Nama itself and €40 billion to fill the holes its discounts left in the books of the banks.) That’s nearly €16,000 for every man, woman and child in the State. But a review of how this vast investment is being managed is simply none of our business.

There is an acronym widely used in internet discussion forums: ITK – in the know. Even after all that’s happened, ITK Ireland is even more assured of its own innate wisdom and even more certain that the plebs can’t be trusted with too much information. Having elected representatives who can demand answers doesn’t guarantee an end to that culture, but it is guaranteed that when even those representatives can be kept in the dark, ITK Ireland will remain serenely untroubled.