Dáil Éireann debate -
Tuesday, 14 Jul 2015

Vol. 887 No. 1

Leaders' Questions

Deputy Micheál Martin

Last week I asked some questions about the sale of the National Asset Management Agency, NAMA’s Northern Ireland loan book to Cerberus, the circumstances surrounding it and the need for a commission of investigation to examine it. Prior to that, we had tabled several questions on the issue to the Minister for Finance, Deputy Michael Noonan. We note that representatives of NAMA appeared before the Committee of Public Accounts last week on the sale of these assets.

There was a policy drive to accelerate the sale of NAMA’s loan books in this country and elsewhere in six months, as in the case of the Irish Bank Resolution Corporation, IBRC. The Minister for Finance made these comments at an Oireachtas committee and suggested it to NAMA. Apart from this, it emerges that he knew from March 2014 that a former NAMA adviser, Mr. Frank Cushnahan, was to be paid in a three-way split of a £15 million fee between him and two solicitors firms for the sale of the Northern loan book to Pimco, the first company which had come along looking for a closed deal with NAMA. We also note that there seems to have been significant interaction between Northern politicians and Pimco, the Northern Ireland Executive, the Northern Ireland First Minister, the Minister for Finance, Deputy Michael Noonan, and NAMA. For example, the principal private secretary to the Northern Ireland First Minister sent a copy of the memorandum of understanding between the Northern Ireland Executive and Pimco to the Minister for Finance who properly sent it back to them, saying they should deal with NAMA.

The fundamental question is did it not strike anybody, including the Minister for Finance, that a former adviser who had resigned some months earlier from the Northern Ireland advisory committee to NAMA was involved in doing the biggest property deal on the island of Ireland with the very company that was going to buy it.

An Ceann Comhairle

A question, please.

Deputy Micheál Martin

Did it occur to anybody that the entire process should be withdrawn and that the deal should be pulled back from? One month later it was sold on to Cerberus following a competitive bid. The bottom line, however, is that the same two legal firms were involved. What happened after the sale? We learned about an offshore account in which £7 million had been placed. We learned that a senior partner in one of the legal firms involved was no longer with that firm. The matter was then reported to the Law Society of Northern Ireland.

An Ceann Comhairle

A question, please.

Deputy Micheál Martin

From March this year, everybody else has been in the dark about this. The Minister did not alert anybody here that there were serious issues surrounding the sale of the Northern Ireland loan book. By any definition, it was a serious issue that such a senior adviser to NAMA on the Northern Ireland loan book and who was on NAMA’s Northern Ireland advisory committee was subsequently playing a central role in doing the deal.

An Ceann Comhairle

Will the Deputy put his question? We are way over time.

Deputy Micheál Martin

There are also concerns about the interaction between the Northern Ireland Executive and NAMA. The Minister for Finance had five contacts, namely, three meetings and two telephone calls, with Northern Ireland politicians on the sale of the NAMA loan book. That is separate from the biannual meetings between Northern Ministers and their counterparts in the Republic. This is a concern, bearing in mind that the original legislative template for NAMA rules out any involvement of politicians in it.

An Ceann Comhairle

Will the, Deputy, please, put his question? He is way over time.

Deputy Micheál Martin

Is the Taoiseach not concerned about this? Why was it that, when the Minister for Finance was informed of this serious development with NAMA ,that the entire sales process was not withdrawn?

The Taoiseach

The Deputy has raised several issues which have been commented on in the public for the past period. It is important to bear in mind that there are two jurisdictions involved. What he is talking about in respect of the issue in Northern Ireland is being examined by the Law Society of Northern Ireland while the National Crime Agency in the United Kingdom has recently confirmed that it is investigating allegations of corruption. The Minister for Finance and NAMA have welcomed these investigations.

The Deputy is well aware that the Committee of Public Accounts and the Comptroller and Auditor General’s office are the accountable bodies for NAMA. They should be allowed to investigate any issue that arises. Last week personnel from NAMA were before the Committee of Public Accounts which is chaired by Deputy John McGuinness, at which they issued statements and answered questions.

The Northern Ireland portfolio was sold for €1.5 billion because that was what the properties securing loans were worth. The original amount was €5.7 billion, lent by the banks prior to NAMA’s establishment, but it had no relevance to the current value of the underlying property security. The Minister for Finance has outlined the chronology of what happened. When it was brought to his attention in respect of a company called Pimco, it obviously withdrew because he saw that it did not go any further. This matter is being investigated by the Northern Ireland Assembly’s finance committee. Both the Law Society of Northern Ireland and the National Crime Agency in the United Kingdom are investigating allegations of corruption.

In so far as NAMA is concerned, the procedures and chronology have been outlined by the NAMA personnel who attended the Committee of Public Accounts last week. As the Deputy is also aware, there are personnel from the Comptroller and Auditor General’s office on the board of NAMA with access to all of the papers and documentation. Their responsibility is to audit the accounts. They have issued four reports so far which have been deemed to be positive.

Regarding the National Crime Agency's investigation in the United Kingdom, the only potential illegal activity of which we are aware is the diversion of funds due to a Northern Ireland law firm. The allegations raised in the House by Deputies are being taken very seriously by the authorities best placed to investigate them. The Northern Ireland firm in question, Tughans, has referred the alleged diversion of funds by one of its partners to the Law Society of Northern Ireland for investigation. The National Crime Agency in the United Kingdom has confirmed that it is to investigate the allegations of corruption. This specialised force has a national and international reach, with a mandate and powers to work in partnership with other law enforcement organisations to tackle organised and economic crime. The Minister for Finance and NAMA have welcomed this investigation.

NAMA has a remit, namely, to get the best value for the taxpayer.

Its remit has been expedited in that quite a deal of the properties that were in its portfolio have been moved on.

The fact is there are no claims of wrongdoing against NAMA. They paid no moneys to and had no relationship with any party on this particular loan sale against whom any allegations of wrongdoings are now being made and the portfolio was sold following the open process to the highest bidder for what it was worth.

Deputy Micheál Martin

I asked the Taoiseach last week would he set up a commission of investigation, and he said, "No". The Committee of Public Accounts would be the job, he said. There is a significant difference between the UK's National Crime Agency and the Committee of Public Accounts in terms of capacity, power, expertise etc. What is dramatic is the contrast between how the UK authorities are approaching this and how the Taoiseach and the Government are approaching it. It is quite a dramatic contrast in terms of the respective responses from the two jurisdictions.

Second, it is about ethics and whether the deal is done ethically. NAMA seems to be saying if everything is okay on the seller's side, it is not really responsible or too bothered about what happens on the purchaser's side. It satisfies NAMA that it got the best value for money, so the agency thinks. I would submit to the Taoiseach that it is equally important that we all, including NAMA, are satisfied that a deal is ethically completed, and one gets concerned when one learns, as NAMA and the Minister learned, that one's former adviser is about to get a substantial sum for assisting in closing the sale of the largest property deal on this island. As members of the committee stated last week, it is shocking.

An Ceann Comhairle

A question, please.

Deputy Micheál Martin

No one batted an eyelid. It seems neither the Minister nor NAMA batted an eyelid other than to safeguard themselves, to tick the boxes and to get the assurances, notwithstanding that it is the same legal firms involved, and lo and behold, we all are surprised afterwards when other material emerges. It is not good enough. It is an extraordinary error, at the minimum, of judgment, that the deal was allowed to go ahead and the sale of the entire northern loan book was allowed to proceed in the knowledge of what was going on in terms of involving people involved in advising NAMA a short period before they resigned. It was only in the preceding September that the individual resigned.

Also-----

An Ceann Comhairle

A question, please.

Deputy Micheál Martin

-----the memorandum of understanding that the Northern Ireland Executive drew up with Pimco is, in itself, extraordinary. Releasing all the debtors of corporate guarantees and security of borrowers etc., it is an extraordinary memorandum. It was sent to NAMA as well. In addition, the First Minister met Cerberus before the deal was closed.

An Ceann Comhairle

Would Deputy Martin put his supplementary?

Deputy Micheál Martin

Was the same deal done there? It is a kind of activity that was not happening here. In any event, it was not meant to be. To have that level of political involvement between the First Minister, the Minister for Finance etc.------

An Ceann Comhairle

I thank Deputy Martin.

Deputy Micheál Martin

The Deputy First Minister met them afterwards, after the deal was done.

An Ceann Comhairle

Would the Deputy please put the question?

Deputy Micheál Martin

The bottom line is, will the Taoiseach agree to the establishment of a commission of inquiry?

The Taoiseach

I am not sure whether Deputy Martin is making an allegation or accusation here against anybody, either in NAMA or down here in the Twenty-six Counties.

Deputy Mattie McGrath

Deputy Martin wants the truth.

The Taoiseach

Deputy Martin has gone through a range of comments there now. He needs to be clear if he is making an allegation or accusation against anybody in this jurisdiction, either from NAMA or in the political process. For the record of the House-----

Deputy Micheál Martin

On a point of order, I have made no allegation. Why is the Taoiseach deliberately answering the question he was not asked?

Deputy Barry Cowen

It is an old tactic.

An Ceann Comhairle

Deputy Martin should resume his seat.

The Taoiseach

Deputy Martin is not making any allegation.

Deputy Micheál Martin

It is the old sleeveen approach again.

An Ceann Comhairle

Deputy Martin should resume his seat.

Deputy Micheál Martin

The Taoiseach should answer the question I asked, for God's sake.

An Ceann Comhairle

Deputy Martin should resume his seat.

Deputy Micheál Martin

The Taoiseach should stop that old sleeveen carry on.

Deputy Paul Kehoe

Deputy Martin should withdraw that.

Deputy Micheál Martin

The people are fed up with it. There is a lack of integrity.

Deputy Paul Kehoe

The Deputy should withdraw that.

An Ceann Comhairle

Would the Deputies allow the Taoiseach to respond?

Deputy Paul Kehoe

It was a disgraceful comment.

The Taoiseach

I am glad to know that Deputy Martin is not making any allegation or accusation against anybody down here.

Deputy Micheál Martin

The Taoiseach knows damn well I did not.

The Taoiseach

Even he will be aware that a commission of investigation down here does not have jurisdiction in Northern Ireland.

Deputy Timmy Dooley

NAMA is down here, in case the Taoiseach had not noticed.

The Taoiseach

That is why I mentioned the crime agency, the financial affairs committee in Northern Ireland and the Northern Ireland Executive. For the record, the Minister for Finance received an expression of interest via the Northern Ireland Minister for Finance, Mr. Wilson, from Brown Rudnick on behalf of its clients. The Minister for Finance advised the Minister, Mr. Wilson, that Brown Rudnick should approach NAMA directly with its expression of interest and clarified-----

Deputy Micheál Martin

He said all that.

The Taoiseach

-----that NAMA would not run an exclusive process but would have to run a competitive and transparent sales process. NAMA subsequently received a third-party approach from a potential buyer to sell the loan portfolio on an exclusive basis. NAMA did not agree with this and instead decided to appoint a lone sale broker, who openly marketed the portfolio of Northern Ireland debtor loans. Later in the process, one of the bidders for that, Pimco, disclosed a proposed fee arrangement to a former member of NAMA's Northern Ireland advisory committee, NIAC. The NIAC had no role in the sale process and while the individual was not a member of NIAC at the time-----

Deputy Micheál Martin

We know all this. The Taoiseach is time-wasting.

The Taoiseach

I will repeat it for Deputy Martin because he tends to confuse matters.

An Ceann Comhairle

The Taoiseach without interruption. I gave Deputy Martin the time to make his point and I am allowing the Taoiseach - this is an important point - to clarify.

The Taoiseach

The person never had access to confidential portfolio information. NAMA told Pimco that it would have to withdraw, as this arrangement could undermine the integrity of the sale.

Deputy Finian McGrath

The Taoiseach has been watching "The Sunday Game" too often.

The Taoiseach

Having concluded that sufficient competitive tension remained among the two remaining bidders, Lazard, which was NAMA's loan sale broker, went on to engage with the remaining interested parties and Cerberus paid the highest price.

Deputy Timmy Dooley

It is a kind of Hansel and Gretel story.

The Taoiseach

NAMA's legal adviser on that sale was Hogan Lovells, not Tughans, and no moneys from NAMA sale proceeds went to Tughans or any party linked to Tughans.

Deputy Dara Calleary

And we all lived happily ever after.

The Taoiseach

Cerberus gave NAMA written confirmation and has confirmed again that no fees were paid to any party that ever had a relationship with NAMA, including any current or former NAMA board member, current or former committee member, or current or former staff member.

Deputy Finian McGrath

Tell us The Three Bears.

The Taoiseach

The alleged division of funds is internal and it has no relevance to NAMA's open competitive sales process.

I repeat that NAMA is responsible to the Oireachtas through the Committee of Public Accounts, which is chaired by Deputy McGuinness. The Deputy had the principals from NAMA in before his committee last week. Both the Committee of Public Accounts and the Comptroller and Auditor General are the agencies in this jurisdiction for dealing with issues of NAMA. When it became known that the compliance section of Pimco brought it to the attention of the Minister that there was a reference to a fee being paid, an end was put to that particular company's process in so far as that loan portfolio is concerned-----

Deputy Timmy Dooley

They did it another route.

The Taoiseach

-----and that was done immediately.

Deputy Mary Lou McDonald

For the purposes of clarity, there are, of course, two jurisdictions currently on this island but there is one NAMA. The person who is answerable in the final instance for the behaviour of that State agency is not the Comptroller and Auditor General but, in fact, the Minister for Finance. Second, the Comptroller and Auditor General does not have staff or personnel on the board of NAMA, as the Taoiseach asserted a few moments ago. Finally, NAMA has refused to appear before the finance committee in the North to which the Taoiseach referred.

As with each scandal that unfolds on the Taoiseach's watch, the scale of what is going on in the secret world of NAMA is only slowly, piece-by-piece emerging into the light. No information has surfaced through any action or admission by the Government or its agencies. For instance, the £15 million kickback for fixers involved in the original sales process for the Northern book were only brought to NAMA's attention by a potential US buyer, Pimco. One proposed recipient of this kickback was Mr. Frank Cushnahan who, incredibly, had been a member of NAMA's northern advisory committee and appointed by the Minister. NAMA chairman, Mr. Frank Daly, told the Committee of Public Accounts of which I am a member that he briefed the Minister for Finance, Deputy Noonan, in full on this scandal, including the size of the proposed payment of £15 million. The question has already been asked, but not answered, as to why Deputy Noonan did not at that point suspend the sales process. There is a further question as to why the Minister did not inform the Executive of this turn of events and the pollution of the sales process.

Mr. Daly also says that NAMA was fully aware that the Belfast solicitors, Tughans, who by the way had a close relationship with Mr. Cushnahan, also acted for NAMA debtors.

Imagine - they were potentially on two sides of a transaction. Will the Taoiseach tell the Dáil whether Tughans acted for debtors on the Northern loan book?

Perhaps the most breathtaking aspect was the revelation over the weekend that Mr. Frank Cushnahan was a NAMA debtor when appointed to the Northern Ireland advisory committee. Will the Taoiseach comment on this? NAMA's chairman, Mr. Frank Daly, did not give this piece of information when he appeared before the Committee of Public Accounts. Was the Minister for Finance, Deputy Michael Noonan, aware of this fact?

In the light of these glaring questions and to ensure the interests of taxpayers are fully served, will the Taoiseach establish a commission of inquiry into the management and operation of NAMA?

The Taoiseach

I wish to clarify what I said about the personnel from the Office of the Comptroller and Auditor General. I think I said they served on the board of NAMA, but that is not true. They are part of the NAMA company from the Office of the Comptroller and Auditor General but not board members.

The Deputy asked about what she called the "kickback". When the compliance section of Pimco brought to the attention of the Minister for Finance the fact that there was a proposed reference to a fee in the documentation, an end was put to Pimco's involvement forthwith. The sale was not pulled because there were other potential buyers interested in the loan portfolio in Northern Ireland. I do not have details of for whom Tughans acted.

The Deputy also asked about a former board member, but the legislation regarding NAMA allows for recommendations to be made of people who might be able to serve on the board. I understand a number of names were put forward as recommendations.

The Chairman of the Committee of Public Accounts, Deputy John McGuinness, has every right to recall personnel from NAMA to ask them further questions on any new information which comes to light. I have heard no accusation or allegation being made against anybody down here or against NAMA. As I confirmed in my reply to Deputy Micheál Martin, no payments were made by NAMA to the people referred to. I am quite sure the Chairman of the Committee of Public Accounts will reflect on any new information that has been brought to light and call back the personnel from NAMA to find out the answers to the questions raised by the Deputy.

As I said to Deputy Micheál Martin, commissions of investigation operate only within this jurisdiction. The crime agency in the United Kingdom which has a different remit is investigating allegations of corruption. Some of the points raised by the Deputy will doubtless be the focus of its attention.

Deputy Mary Lou McDonald

The primary focus of the criminal investigation in the North is on a subsequent sum of money, £7 million, which found its way into a bank account on the Isle of Man. Primary responsibility for the democratic oversight of NAMA is vested in the Oireachtas, the Government and the Minister for Finance. I will put a couple of allegations, or assertions, on the table for the Taoiseach.

An Ceann Comhairle

This is Question Time, not allegation time.

Deputy Charles Flanagan

Allegation time. It is what the Deputy is good at.

Deputy Mary Lou McDonald

Pimco flatly contradicts the account given by Mr.. Frank Daly and insinuated by the Taoiseach that it was asked to withdraw from the sales process. It suggests it withdrew voluntarily. In the emerging scenario the Minister and NAMA know that things have gone very badly awry, yet, not only do they not inform the Northern Executive or pull the sales process, they are quite happy to allow things to trundle on. That is how the facts stack up. Facts are also emerging that specific law firms were acting for both bidders and NAMA debtors at the same time.

An Ceann Comhairle

The Deputy is over time.

Deputy Mary Lou McDonald

Mr. Cushnahan, appointed by the Minister for Finance, is a member of the Northern advisory committee of NAMA within NAMA's national structure, yet he has a very close relationship with one of the law firms. We then discover he was in line for a kickback of some £5 million.

An Ceann Comhairle

Will the Deputy, please, put her supplementary question? This is Question Time.

Deputy Mary Lou McDonald

Yes. Are we supposed to believe this was an isolated incident or that this turn of events, this web of relationships, the bad governance and the Minister for Finance asleep at the wheel was limited to Project Eagle? Are we asked to believe this? I believe the credibility of NAMA is on the line, particularly when one considers that some €13 billion worth of assets are on the market or are to come on the market in the near future. How is the public to have any confidence in the workings of NAMA or Government oversight of the agency, given this scenario? That is the reason a commission of inquiry is necessary. The Taoiseach could save us all a lot of heartache by not taking the long scenic route but by facing up to this issue and instigating a commission of inquiry.

The Taoiseach

The Deputy has made a number of comments. It is not the first time she has made comments and followed them by saying if anybody has evidence of illegality or criminality, he or she should bring it to the attention of the Police Service of Northern Ireland. She asks if we are expected to believe the activities of NAMA in this matter were legal. If she is insinuating that they are illegal, I advise her to bring such an accusation before the PSNI. She commented on the difference of opinion between Mr. Daly and Pimco. I expect the Chairman of the Committee of Public Accounts, Deputy John McGuinness, to follow it up.

Deputy Dara Calleary

Pass the buck.

The Taoiseach

The Deputy was in possession of material from the Committee of Public Accounts. The remit of NAMA is to return a profit for the taxpayer on its extensive sales portfolio and it is responsible to this House and the public through the Committee of Public Accounts and the reports of the Office of the Comptroller and Auditor General.

Deputy Mary Lou McDonald

NAMA is shrouded in secrecy and accountable to no one.

The Taoiseach

The Deputy either accepts this or she does not. If she suggests we should not believe the Committee of Public Accounts, or the evidence given to it before the conclusion of its report or that of the Comptroller and Auditor General, she should say so. If she is making allegations in this House that the activities of NAMA are illegal, she must base this on facts which stack up. As she has the evidence, I advise her to give it forthwith to the Police Service of Northern Ireland.

Deputy Paul Murphy

It is now over two months since I asked the Taoiseach how many people had paid water charges. One would have though that was a simple question. The Taoiseach answered it by telling me he was not here to spoon-feed me, but advised me to "toddle along" to the audiovisual room at 4 p.m. on 13 May where Irish Water would give me the answer to any question I wished to ask. He then told us the purpose of Leaders' Questions was to tell us where to go. That was all before he declared himself to be a long-time supporter of the idea that Dáil questions should be answered as fully and completely as possible. As he presumably knows, Deputy Ruth Coppinger and I duly toddled along to the audiovisual room to ask Irish Water the questions raised. We were told by it that it would not be "helpful" giving us the figures.

Following that I submitted a freedom of information request which was rejected on the grounds of commercial sensitivity by Irish Water, which is a monopoly. I appealed the refusal and got the same response. Approximately one month ago, when the Minister for Jobs, Enterprise and Innovation, Deputy Bruton, was standing in for the Taoiseach, I asked the question again. Instead of getting any answers, I got a cut-price advertisement for Irish Water, which I could have got by turning on any radio station at almost any time of the day. The Minister did say, however, that we should direct our questions to the Minister for the Environment, Community and Local Government, Deputy Kelly. In fact, Deputy Ruth Coppinger had submitted a written question for the next day to the Minister, Deputy Kelly, which was ruled out of order. That is six different ways, which started more than two months ago with a question to the Taoiseach, we have tried to get those figures. It is quite a saga to get very simple information.

An Ceann Comhairle

A question, please.

Deputy Paul Murphy

What is the Taoiseach hiding? What is Irish Water hiding? For one, many people can reasonably guess and surmise that what is being hidden is a very low level of payment, especially given that 30% of people have still not registered, despite the Taoiseach's promise of a free €100, which was stolen from lone parents, to get people to sign up. Irish Water was happy to give that information without any scruples about disclosing commercially sensitive information.

We return again, more than two months later, to ask two simple questions. Has the Cabinet discussed the levels of payment of the water charges?

Deputy Mattie McGrath

Turn off the tap.

Deputy Paul Murphy

Will the Taoiseach please provide information about how many people have paid and how many have not?

Deputy Finian McGrath

Two simple questions.

The Taoiseach

I understand that Irish Water will provide that information to everyone tomorrow.

Deputy Ruth Coppinger

Tomorrow.

Deputy Bernard J. Durkan

That is the wrong day.

Deputy Mattie McGrath

Turn on the tap, Taoiseach.

Deputy Paul Murphy

I will repeat the two questions. Has the Cabinet discussed the payment levels of the water charges? It is a simple question and I would like the Taoiseach not to evade it. The Taoiseach told me more than two months ago to go to Irish Water, where we would get the information. He said, "I am sure Irish Water will be happy to supply the Deputy with the details of bills that have been issued and paid". More than two months later I am asking him, being, as Taoiseach, democratically accountable to this House, to provide this information.

It is a simple request and an important one in the context of the Civil Debt (Procedures) Bill, which has been exposed as nothing more than a Government scare tactic, being all bark with no bite. There will be no direct deductions from people's income for water charges. Two court cases will be necessary to get payment for water charges from people, the first of which cannot be taken until a bill of more than €500 has been racked up, meaning there will be no cases until the end of 2017. We need to have the figures so we can have a discussion on them. Will the Taoiseach answer the questions, given he is responsible to the Dáil?

The Taoiseach

Irish Water, as Deputy Murphy knows, has responsibility here. Deputy Murphy would not expect me to comment on matters which are discussed by the Cabinet.

Deputy Paul Murphy

So the Cabinet did discuss them.

The Taoiseach

That is a longstanding practice in this House, so I do not propose to do it.

Deputy Micheál Martin

Ministers do it every week.

Deputy Mattie McGrath

Ministers tweet it every week.

The Taoiseach

As I said to Deputy Murphy, I expect Irish Water to make the information available to everyone tomorrow. No doubt he will have the opportunity to comment again if he wishes.

Deputy Ruth Coppinger

Will the Dáil not discuss it?

An Ceann Comhairle

That completes Leaders' Questions for today.

Deputy Michael Healy-Rae

He is off the hook.