Nama rejects claim Project Eagle sale lost £190m

Board members defend sale of Northern Ireland portfolio during PAC appearance

Political sensitivities in Stormont over a southern State agency controlling assets in its jurisdiction may have been a factor in Nama's Project Eagle sale, a committee has heard.

Three directors of the National Assets Management Agency appeared before the Public Account Committee to respond to the Comptroller and Auditor General's report that the £1.24 billion sterling (€1.6 billion) sale of the 800 property portfolio had resulted in a probable loss to the taxpayer of £190 million.

The head of Nama's Risk Committee Oliver Ellingham described how Nama's presence was perceived politically in the North.

"Our belief was that the political forces in Northern Ireland would rather have their assets controlled by an American company rather than an entity from the South," said Mr Ellingham, who appeared before the committee alongside fellow directors William Soffe, head of the credit committee, and Brian McEnery, head of the audit committee.


Several members of the committee, particularly Alan Kelly (Labour), Mary Lou McDonald (Sinn Féin), Catherine Connolly (Indpendent) and Shane Cassells (Fianna Fáil) argued that what they said was a hasty sales process had partly been motivated by political considerations.

Ms McDonald referred to the meeting between then first minister Peter Robinson and former US vice president Dan Quayle of Cerberus, the US company which eventually bought the portfolio, only weeks before it became the preferred buyer in March 2015.

Under questioning from Ms Connolly, Mr Kelly and Mr Cassells about the sales process, Mr Soffe said Minister for Finance Michael Noonan, after discussion with his Northern counterpart, had suggested a "discrete and confidential" sales process.

The three board members denied this essentially made the process an uncompetitive one.

In his opening statement, Mr Soffe told the committee the board stood over the sale, the sales process, the price achieved and also rejected any suggestion that Northern advisory member Frank Cushahan had any specific knowledge or bore any influence.

As Nama chairman Frank Daly had done in September, Mr Soffe said the conclusions drawn by Comptroller and Auditor General Seamus McCarthy were wrong

All of the committee members were harshly critical of the tone of the report, which they said was defensive and pejorative of the C&AG Seamus McCarthy. PAC chairman Sean Fleming said: "I am shocked by your statement that made 10 specific attacks on the C&AG".

Ms McDonald referred the directors to Nama records which showed that after Pimco disclosed Mr Cushahan's prospective success fee, its head of asset recovery Ronnie Hannah had at one stage asked could the deal be "shaped differently for the arrangement fee to come out".

The directors said this was never discussed at the board nor would they have considered it. Mr McEnery said the moment it became known of Mr Cushnahan’s “unethical” involvement there was a unanimous view on the board the deal with Pimco could not proceed.

Under questioning the board members said they became aware that the legal advisers to Pimco Brown Rudnick and Tughans were now involved as advisers with the successful Cerberus bid only hours before it was awarded in April 2014.

“For me it is astonishing there were not alarm bells or worry going off in your heads,” said Ms McDonald.

Mr McEnery did say he raised concerns of the possibility of Cerberus acting as a proxy for Pimco but received assurances this was not the case.

Ms McDonald also referred to Pimco correspondence which suggested the success fee for Mr Cushahan and others was agreed in April 2013, before the first approach was made to Nama by Brown Rudnick. Mr Ellingham replied that this might be a typographical error.

“That is one hell of a typo. Was this a ready-up for the get-go?” she asked.

Under repeated questioning during a six-hour meeting, the Nama directors defended the sale and the price achieved. Mr Soffe said if it were to be sold today, Project Eagle would sell for less than £1 billion.

Mr McEnery took issue with the claim there was no reference in Nama documentation to the 10 per cent discount (rather than the standard 5.5 per cent) that was applied in the deal. He pointed on several occasions to references to the steeper discount in Nama documentation.

Harry McGee

Harry McGee

Harry McGee is a Political Correspondent with The Irish Times