Project Eagle: Report criticises agency for failing to act over role of adviser

Sale could have earned £190 million extra for the State

Nama had already decided to sell its Northern Ireland loans to US company Cerberus before it learned of a potential conflict of interest involving the successful bidder and two law firms, a report reveals.

The report by Comptroller and Auditor General (C&AG) Séamus McCarthy criticises Nama’s sale of the Project Eagle loans to Cerberus in April 2014 for £1.3 billion on the grounds it could have earned £190 million extra for the State and for failing to recognise the impact that a conflict of interest could have had on the sale.

In March 2014, preferred bidder, US firm Pimco dropped out of the auction after Nama learned the company had agreed to pay a former agency adviser, Frank Cushnahan, Belfast solicitors, Tughans and US lawyers Brown Rudnick, a £15 million success fee.

Nama’s board then chose Cerberus as its preferred bidder, meaning it was in pole position to win the competition to buy Project Eagle. However, the agency discovered on April 2nd that the US company had taken on Tughans and Brown Rudnick as advisers and had agreed to pay them a success fee.


Before finally naming Cerberus as the winning bidder, Nama demanded assurances that none of the agency’s current or previous executives or advisers were being paid to work on the US company’s bid, the report says.

However, Mr McCarthy's report says once Nama discovered Mr Cushnahan's involvement, it should have sought advice from the compliance unit in its own parent body, the National Treasury Management Agency, or from Lazards, the UK bank it hired to act as its agent on Project Eagle.

The C&AG also says the involvement of Tughans and Brown Rudnick in the winning bid should then have raised concerns for Nama.

The controversy over Project Eagle arose when it emerged that Tughans's former managing partner, Ian Coulter, transferred £6 million in fees from the deal to an Isle of Man account without the firm's knowledge. Although he moved the money back, he resigned once the transaction was discovered.

Despite the assurances that Cerberus gave Nama, BBC Northern Ireland’s Spotlight programme recorded Mr Cushnahan claiming the money was meant for him. Mr Cushnahan denies any wrongdoing.

Nama said this week the report establishes no link between Mr Cushnahan and the outcome of the Project Eagle sale or the price it achieved.

Barry O'Halloran

Barry O'Halloran

Barry O’Halloran covers energy, construction, insolvency, and gaming and betting, among other areas