Dáil Éireann debate -
Thursday, 1 Oct 2015

Vol. 891 No. 2

Leaders' Questions

Deputy Billy Kelleher

Last July, serious allegations were made regarding fixer fees and other improprieties worth millions of euro in regard to aspects of the Project Eagle deal, the sale of the NAMA loans in Northern Ireland. Deputy Mick Wallace made serious allegations which the Taoiseach agreed were serious and should be taken seriously. However, there has been deafening silence in terms of our ability to investigate these allegations and other aspects of the concerns around the purchase of the loan book in Northern Ireland. This is a property portfolio valued at approximately €1.6 billion and the integrity of the State is coming into question as allegations are being made on a continual basis. There is no doubt there are huge competing interests in Northern Ireland, both at political level between political parties and between various property developers and others who have expressed interests in the local scene in Northern Ireland.

However, this goes beyond Northern Ireland. NAMA was established by the Houses of the Oireachtas and it is the credibility and integrity of this House that is being brought into disrepute, because we are unable or unwilling to set up some form of investigation or to facilitate NAMA to co-operate with investigations in the North, in Belfast. The idea that we will continue to allow drip-feed allegations to be made and go unanswered or go without investigation is not credible or tenable. It does a disservice to NAMA, which acts as an agent of this State, and undermines that organisation's integrity.

Does the Tánaiste accept that the allegations are serious enough to warrant investigation? Second, should we not facilitate a proper, robust investigation? This would mean allowing NAMA to appear before the inquiry in the North. It has been said previously, and NAMA has said, that it is only answerable to the Houses of the Oireachtas, but that is not good enough. The issue goes beyond this State and is clearly important. Stormont has set up a committee of investigation and the US Securities and Exchange Commission and Department of Justice are also investigating the issue. However, this country is doing nothing other than having the Committee of Public Accounts have a look at the matter.

There is a lot at stake on this. There are competing interests politically and in terms of property developers in Northern Ireland. More importantly, the integrity of NAMA, which was established by this Parliament is being drawn into question. We are obligated to ensure we do everything we can to ensure all allegations are investigated and the truth discovered. We owe that to this Parliament.

The Tánaiste

I thank the Deputy for raising this matter. He has done so in a very helpful manner. I do not believe there is anybody in the House who is not interested in hearing some of the responses to allegations that have been thrown around.

I am conscious that the Deputy's colleague, Deputy John McGuinness, is leading an all-party Committee of Public Accounts inquiry committee in regard to the position and that both Brendan McDonagh, CEO of NAMA, and Chairman Frank Daly, have been speaking very frankly for an extended period to the members of the committee. Those members are acting on behalf of the Oireachtas in pursuit of appropriate, straight and honest answers to questions that have been raised.

We need to be very clear about what happened and what the mood in the country was at the time when NAMA was established. The Labour Party did not support the establishment of NAMA. We saw flaws in the set-up and expressed our reservations at the time. Two underlining principles were put forward regarding the establishment of NAMA and as far as I am aware, all of the parties in the House at the time and the Independent Members agreed with them. The first principle cuts to the heart of some of the current soreness, including of complaints we hear in this House. This principle was that developers - this was the will of the people - would not be allowed to buy back their loans at heavily discounted prices through the back door. Some people in this House who were themselves successful developers unfortunately lost out. Everybody in the House was involved in the debate. Deputy Michael McGrath was heavily involved in the discussions as a backbench contributor to the debates and the late Deputy Brian Lenihan, as Minister for Finance, led at the time for the Government. Developers were not going to be offered a back door through which to buy back their loans.

The second principle, on which everybody in the House agreed, and I presume still agree, was that politicians would not be directly involved with NAMA. This was for all the reasons we know, which I will not go into, in the history of the bubble and its development, of overly close connections between some political parties, developers and banks.

I am not going to go into that. We have all seen the different reports, such as the Nyberg report. Politicians were not going to be involved in the detailed line decisions on NAMA. When NAMA was established, the Committee of Public Accounts was given an overriding authority on behalf of everybody here to be the investigating body to which NAMA could be properly and fully accountable. I agree with the Deputy on this.

I have listed to Members in this House who are former developers. I have great sympathy for some of the misfortunes that befell them. I have heard them say, with great passion, that at the height of the bubble property values were, say, €6 billion or €7 billion and when the crash came, unfortunately those values often fell below a billion. In fact, when I watched him on television for a short while this morning, I heard Mr. Daly say that in many cases, loan values fell by 50%. In some cases, he said, the loan values fell to below 10%.

What we are getting is a terrible regret on the part of developers that they did not get to buy their loans by the back door and a wish that the bubble values, which they want to keep in front of our eyes as the amounts that should have been realised and magicked up by NAMA, would actually represent what business would pay for them. That, of course, has not happened. We have had Deputy Wallace raise this time after time, as a man who has worked hard in development and produced good developments all his working life. Of course he, like other developers, had a terrible fall in terms of his business. We all sympathise with this, across the House. However, the argument that people should be allowed to buy back their loans was a critical issue in the period around the establishment of NAMA and that is what is in the legislation. I think it was Fianna Fáil that sponsored this legislation. That is why there has to be an arm's-length process of selling.

Deputy Billy Kelleher

The Tánaiste's reply reminds me of the Light Brigade. It started out very well but ended very badly.

Deputy Ciara Conway

Like Fianna Fáil.

Deputy Eric Byrne

They do not like the history, do they?

Deputy Arthur Spring

They might have to live it soon enough.

Deputy Billy Kelleher

The core of the issue here is that the integrity of the sales process has been compromised. That is the core of the allegation. The legislation is clear. Developers cannot buy back their loans. That is in the primary legislation that was passed here. The Committee of Public Accounts is also able to investigate and hold NAMA to account.

Deputy Noel Harrington

Grand so.

Deputy Billy Kelleher

The broader issue is that allegations are being made that there was large bungs being paid to facilitate the purchase of properties in the Northern Ireland Project Eagle loan book from NAMA and that the sales process was compromised. Those allegations compromise the integrity of the organisation which was to oversee the sales. I am not saying that developers can buy back their property loans, or that politicians in the Republic are making representations to NAMA. The legislation does not allow it to happen.

The Tánaiste

Exactly.

Deputy Billy Kelleher

The point is that NAMA and the sales process are being questioned. We need to be able to facilitate NAMA appearing in Belfast before the relevant committee in Stormont so that it can defend its integrity and stand over the sales process. The integrity of the organisation should not be undermined. If the sales process has gone through with probity, why would NAMA officials fear appearing before the Stormont investigation?

There are many competing interests in the North that want to keep this going and keep undermining the process. There is a lot to be gained on either side politically, and also in the context of developers. We owe it to NAMA to facilitate its appearance before the committee so that it can vindicate and stand over the sales process. That is the core of the issue.

A lot of nonsense has been expressed about the historical problems but NAMA has been established in this State for one purpose and that is to clean up the bad banking system and dispose of assets. It is in all the primary legislation to which the Tánaiste referred. Purchasing loans back is illegal and cannot be done. It is wrong. The prohibitions on politicians making representations is also in the legislation. This has nothing to do with the core issue, which is that allegations were made by Deputies in this House and elsewhere that bungs were paid to facilitate the purchase of loan books from NAMA.

Deputy Eric Byrne

Would the Deputy like to tell us if he has faith in NAMA?

Deputy Barry Cowen

It happened on Deputy Byrne's watch.

The Tánaiste

Let me be very clear. Deputy Kelleher's colleague beside him will remember the long debates in this House that went through the night on several occasions, in which I represented the Labour Party.

Deputy Billy Kelleher

They were historical debates. Get the popcorn, this could take a while.

The Tánaiste

The Deputy should bear with me now. The point is that we made a decision collectively, for good or for bad, as a Parliament. I think it was for the good - I supported the late Mr. Brian Lenihan in his position - that politicians should be removed from the process. Otherwise, every little developer and every big developer in the country could be involved. I was a member of the old Dublin County Council where the developers used to pull my sleeve as I was walking along saying, "Joan, would you like to come to breakfast, dinner or tea and could you have a look at a bit of land that I have a proposition on". When we had the debate on NAMA, we wanted to take that out of the picture.

Deputy Dara Calleary

The Tánaiste should answer the question.

Deputy Michael McGrath

That is done. That is not the issue.

The Tánaiste

I am glad that Fianna Fáil now supports that approach.

Deputy Billy Kelleher

We implemented that proposal.

The Tánaiste

I have no difficulty, nor has the Government, with NAMA going to any institution in the North of Ireland. We do not dictate to NAMA----

Deputy Timmy Dooley

There is a big difference between getting your sleeve pulled----

The Tánaiste

The Fianna Fáil Deputies are trying to have their cake and eat it.

Deputy Timmy Dooley

The Tánaiste is trying to pull the wool over everyone's eyes.

The Tánaiste

Their party caused the bank crash. That was bad enough. It established NAMA. I was a critic of it and am still-----

Deputy Dara Calleary

There is an allegation of bribery. The Tánaiste should deal with it, please.

The Tánaiste

The Deputies should hold on and listen. As far as I am concerned it is a decision for NAMA if it chooses to go to the North. I would be perfectly happy----

Deputy Billy Kelleher

It can go.

The Tánaiste

I cannot tell them----

Deputy Billy Kelleher

This Parliament can send them.

The Tánaiste

It is an agency which operates as far as possible with a remit which is free from the day-to-day pressures of politics-----

Deputy Billy Kelleher

This has nothing to do with politics, it has to do with the integrity of the State.

The Tánaiste

It was established in order to get the country out of a mega debt problem which unfortunately we inherited courtesy of Fianna Fáil, along with a mega crash.

Deputy Timmy Dooley

This is about whether the taxpayer gets an appropriate return.

The Tánaiste

I have no problem with NAMA going North but I want the NAMA board and executives to reach a business decision.

Deputy Timmy Dooley

A business decision on whether they should be called in to question their own business decisions?

Deputy Peadar Tóibín

It is not a business decision.

The Tánaiste

NAMA is currently before the public accounts committee chaired very ably by one of the Deputy's colleagues.

Deputy Michael McGrath

The Tánaiste is throwing out the compliments.

The Tánaiste

All of these issues are now being debated there. I do not have a difficulty as Tánaiste, nor am I aware that anyone else in Government has a difficulty with NAMA making a decision to go before the committee in the North. It is a decision for it to reach.

Deputy Billy Kelleher

It is a decision for this Parliament to reach.

Deputy Peadar Tóibín

The Tánaiste is not a bystander in this.

Deputy Noel Harrington

Deputy Tóibín is not either, apparently. Do not say anything about Deputy John McGuinness.

The Tánaiste

That is unfair, the Deputy is not jealous of John McGuinness. We know that.

Deputy Timmy Dooley

We know the state when people are jealous of Deputy Alan Kelly.

Deputy Aengus Ó Snodaigh

Go raibh maith agat. Yesterday, my party colleague, Deputy Mary Lou McDonald raised with the Taoiseach the appalling prospect that up to 600 people who are living in Longboat Quay will be forced out of their homes unless they come up with €4 million by today.

The Tánaiste

This is the other side of the NAMA story.

Deputy Aengus Ó Snodaigh

These are the latest innocent victims of reckless and unscrupulous property developers who, in their drive for profit, have and are playing Russian roulette with the lives of families.

They have been building substandard and unsafe housing in a property frenzy, particularly during the boom years. Priory Hall, under McFeely, is the most infamous example.

The Tánaiste

One of the Deputy's.

Deputy Aengus Ó Snodaigh

It has nothing to do with me; I will tell the Tánaiste that much.

The Tánaiste

I was not talking about the Deputy personally.

Deputy Aengus Ó Snodaigh

The residents of Longboat Quay, the development with which we are dealing, must now suffer the consequences of bad planning regulations, or a lack of such regulations and enforcement. Residents of such complexes have been exploited by Fianna Fáil developers, like Bernard McNamara and others, in the past. These are the same individuals who collapsed regeneration projects right across the city. The individual in question slithered off to England to escape from bankruptcy in Ireland. He is now back building in the city. He is the rebuilder of the former Canada House in St. Stephen's Green, which he is building on behalf of Denis O'Brien. There is the golden circle. Once again, the Government is facilitating that by not introducing proper legislation. It is interesting that Canada House may be the future headquarters of Irish Water.

Why has the Government not acted on the systematic failure of government and local authorities to follow up on reports that some of the complexes in this city and elsewhere throughout the country are too dangerous to live in? Why has no legislation been produced to address the problems with those buildings and help the victims? It is not just a question of Priory Hall as there are many similar buildings throughout the country. Another of which I am aware is Riverwalk Court in Ratoath. In Newbridge, six houses burnt down. The local authority identified that 90 houses had the same flaw, yet the onus is on the residents to fix it. In Gallery Quay, some of the residents have been forced out but, a year and a half later, there is still no move to do the remediation work required.

Does the Tánaiste agree the public, property owners, tenants and residents need a proper audit of all the properties built during the boom, particularly the docklands developments, but also others throughout the country, to ensure they are given a clean bill of health?

The Tánaiste

I express my sympathy to the people living in the development at Longboat Quay. I can imagine how worrying it is for people who have bought apartments there and who took out mortgages over a long period. Dublin Fire Brigade, in seeking to ensure there are proper fire regulations in respect of those apartments and every other set of apartments, is performing a very important public service on behalf of the citizens of Dublin, and particularly on behalf of the residents living in and paying mortgages on the apartments in question.

As this development was initially within the remit of the Dublin Docklands Development Authority, and as that authority is in the process of moving over to the local authority, which is Dublin City Council, there is plenty of scope to ensure the relevant work is done. I would like to see it done as quickly as possible. I know people living in the complex, as I am sure does the Deputy. Some people became residents through shared-ownership schemes while some bought on the open market. Therefore, we are talking about a huge investment by people in their own lives and the lives of their families in order to obtain good quality accommodation. I am familiar with the outside of the apartments. They are in a very nice location near the River Liffey. They appear to have serious issues concerning fire safety. There is enormous scope for Dublin City Council and the Dublin Docklands Development Authority, which is moving under the remit of Dublin City Council, to address the really important issue of fire safety with the fire brigade as quickly as possible.

There was a similar set of circumstances with Priory Hall, as mentioned by Deputy Aengus Ó Snodaigh. The developer's political movement affiliations were well known. That case was resolved through a process of mediation which was incredibly difficult for the residents and took far too long. I hope we have all learned from what happened there and that we can now have a resolution of a more attractive nature.

The fire brigade worked very closely with the Dublin City Council authorities to address what I understand must be enormous fears among families with children and individuals over the fundamentals of fire safety in the apartments in question. I have spoken to a number of residents and various politicians who represent those in the area and believe that with goodwill from Dublin City Council, which is taking over Dublin Docklands Development Authority, this issue can be resolved and the safety of the residents ensured. We can actually deal with the matter in the here and now.

Deputy Aengus Ó Snodaigh

I do not believe the Tánaiste has managed to persuade anybody that the matter will be resolved.

The Tánaiste

Why not?

Deputy Aengus Ó Snodaigh

She has just kicked it to touch until such time as Dublin City Council has full charge of Dublin Docklands Development Authority. Why does the Government not take the initiative? This case is but one in the media at present. There are several. I do not want to repeat the long drawn-out saga concerning Priory Hall or the many other developments, not all of which had fire safety problems but which were substandard in other ways. Does the Tánaiste agree that there is a need for legislation to ensure surveyors, architects, planners and, in particular, developers can be held to account over their failures? What is the role of HomeBond? Has the Tánaiste any intention of replacing it? Does she intend to underpin future builds with something similar? Can she ensure that every single build in the country, not just in this city, will comply fully with fire regulations? The Tánaiste mentioned Dublin City Council but this is not just a Dublin City Council problem. That is the council identified today by me but some of the affected units are in County Meath and in Newbridge. Will the Government commit to ensuring local authorities have the funding to employ additional planning enforcers and inspectors so they can go on-site at various stages during a build to ensure shortcuts are not taken?

Can the Tánaiste ensure money is set aside for residents, such as the woman who wrote to me who has bought an affordable home in the complex under discussion? She said she bought it in good faith in 2008 under the affordable housing schemes under the Dublin Docklands Development Authority. She claims she is caught up in a mess left by Bernard McNamara, who left the building an unsafe fire-trap. She now has to pay €10,000 for his mistakes. In fact, it may be more. According to the woman, she does not have the money and will not be paying it. She states the Department of the Environment, Community and Local Government failed to deliver a correctly specified building because of the failures of its building control legislation and monitoring. The key is to ensure this does not happen in the future. There is a need to deliver immediately for the people living in the building, so they will have peace of mind if they are to be forced to continue to live in a home that is unsuitable and dangerous.

The Tánaiste

The one thing I do regret reading about Dublin City Council in recent days was that it took a sprightly but elderly woman - I think she was 90 - to court over a satellite television debt. To be perfectly honest, I think Dublin City Council might have been better rewarded by dealing with the issue, albeit a planning infringement, by concentrating its resources on some of the issues that Deputy Ó Snodaigh has highlighted. That is a personal view but perhaps that is something Dublin City Council should actually address.

As regards what is happening to the families who have entered into a whole series of different mortgage arrangements, it is a beautiful development. I do not know if the Deputy has been down there but it is right on the fringes of the River Liffey and externally it certainly looks wonderful. Those families have invested their hopes and dreams in it, but it has been found to be a fire hazard by Dublin Fire Brigade. Let me be clear that the fire brigade has a wonderful record of service to this city and the surrounding county.

What is necessary in this case is for Dublin City Council to step up to the table and work with the fire authority to address the issues which are really serious. The docklands authority was the original developer and, by the way, has had many fine developments in that area. It revived and recreated a whole area of Dublin with many offices, a lot of housing and much employment for Dubliners and others who have come to live and work in the capital. That is now in the process of transferral to Dublin City Council. These are the organisations that have the competency to deal with this matter.

If Deputy Ó Snodaigh would like to see further legislation, as he has suggested, the Government will examine any recommendations he may bring forward. However, the immediate issue is to take the fear away from the families living there with their small children. If there are serious fire risks, it is a matter for Dublin Fire Brigade which for many decades has been protecting all of those living in Dublin. I trust implicitly what the fire officers are saying and I think the solution is there, rather than long-fingering through Dáil legislation. We have to bring together the city council and the docklands authority, which is moving into the city council. This is in the hands of the city council, which should take action as a responsible city authority working with the fire brigade to solve this problem. Everybody living in Dublin admires the fire service so much. I have no objection to more legislation but I do not believe it is needed to address the problems that those families have now.

Deputy Aengus Ó Snodaigh

What about future problems?

The Tánaiste

The council can do it.

An Leas-Cheann Comhairle

Order please. I call on Deputy Fitzmaurice for the Technical Group.

Deputy Michael Fitzmaurice

Credit unions around this country are a shining light in the financial sector. Some 3 million people are members of credit unions which have €16 billion in assets. At the moment, they are willing to invest €9 billion if the Government is willing to listen to them. The banks have left most of the smaller towns around the country. They are either going to county towns or larger cities. Meanwhile, small businesses and working people are moving towards the credit union as their new bank because it is local.

As the Minister for Finance is sitting beside the Tánaiste, I wish to refer to regulation CP88. People involved in credit unions are afraid that if this regulation is signed into effect it will be the death knell for credit unions. The credit unions, that did not need to be bailed out to the tune of €65 billion and are not talked about in here every day like NAMA, seem currently to be getting a slap on the hand for being the best student in the class.

According to those running the credit unions, regulation CP88 is restricting the amount of money that people can have in them. Small and medium enterprises, as well as individuals, wish to become involved in credit unions rather than banks, but they are being restricted. Services such as debit cards and direct debits should be facilitated by the credit union sector due to the lack of banks in some areas.

I am asking the Taoiseach, the Tánaiste and the two other Ministers - the club of four who are allegedly running this country - to have a complete review of regulation CP88. They should work with the credit unions to ensure that this facility is given to people across the country. Credit unions deserve to have such a review undertaken.

The Tánaiste

First, I have to declare an interest as, like most people here, I am a credit union member and have been over a long period. I basically agree with the Deputy that credit unions are incredibly important to people across the length and breadth of this country. They provide a mechanism for friendly financial services that people respect and enjoy. In addition, we have specialist credit unions for teachers and civil servants, which are part of a financial powerhouse in this country.

For my part as Tánaiste, I can say that the Government is absolutely committed to having credit union movements in place. There are a number of different umbrella organisations which offer people a safe and affordable way of saving money or borrowing when the necessity arises. I think there is cross-party agreement in the House on this matter.

The Deputy referred specifically to regulation CP88. My understanding is that it is about the level of deposits that credit unions can take from members. This issue has already been addressed and, in fact, it is in the process of being worked out and refined. The critical point is to allow members to have savings above a certain threshold and, in effect, to increase the threshold. That is actually in train at the moment.

The credit union movement provides a fantastic financial service to people, including families, up and down the country. My Government colleagues and I are absolutely committed to ensuring that it will continue to do so. In the context of the financial crash, however, we all know that unfortunately issues arose for some credit unions. Through the fund established by the Minister for Finance, those issues are well on the way to being resolved for credit unions that encountered difficulties. However, there has also been a learning process from that whereby we need robust, but not disempowering, legislation. Such legislation would protect the ordinary man's and woman's savings, as well as providing the basis for lines of credit that many people have to avail of at different times in their lives.

I include myself in that and I am sure the Deputy is probably included as well. Small businesses have also availed of them from time to time. However, certain things went wrong for a small number of credit unions when the boom was at its height. Those issues are well on their way to being resolved by the regulation system, which helps everybody, including probably the majority of Members in this House and even the members of the press who are present, to have confidence and security when they bank with their local credit unions and use their financial services.

Deputy Michael Fitzmaurice

There was a guidance note with CP88 which stated that credit unions would not be allowed to pool resources. They have €9 billion, be it for investment social housing to help our country and its people or something else, and they are willing to talk to Government about releasing that money and getting interest on it to remain viable.

Clearing houses are robbing credit unions. AIB is owned by us. If credit unions want to use the clearing houses, the prices they are being quoted are astronomical. I have talked to representatives from the credit unions in Boyle, Roscommon, Ballinasloe and Tuam and I have looked at Glenamaddy. A total of €2 million has been put into a small community and this has created jobs. It is fine talking about it here and saying we all support them. Yes, everyone supports them but one must create an environment where direct debits can be facilitated, where one can have a debit card and where one can have more banking services. If we want to have a vision for areas outside the Pale - a vision for reviving rural parts of Ireland - the credit unions and the post offices will be the new banking sector there for the simple reason that once the banks got the €65 billion, they absconded from smaller towns. I emphasise that we need those facilities and I ask the Minister for Finance to consider that and drive it forward for whatever period the Government remains in office because it is crucial for the revival of rural areas. It is also crucial that credit unions are not left to stagnate because this is what will happen. At present, it appears that other than what they lend out, the remainder of their €16 billion in assets is left as liquidity at the rotten price the banks give in interest. I ask the Tánaiste to give an undertaking to the effect that she will ensure this facility is given to the credit unions, not for their sake but for that of the people throughout this country who will be deprived of a banking sector if it is not given to them.

The Tánaiste

I am a very strong supporter of the credit union movement. It is the friendliness, approachability and quality of personal service that is available from credit unions that is extremely attractive to people who put their savings into credit unions and use their services, not just in rural areas but also in inner-city communities and new communities around cities. My Department has arrangements with credit unions in a number of instances, particularly through the Money Advice & Budgeting Service and the Citizens Information Board, by means of which we help people who may not have a particular credit record to work to become a customer of their local credit union and, ultimately, build up credit capacity, which can be very useful to them. All of the parties in this House have no difficulty in agreeing with that.

In respect of the proposal of the credit unions that they have access to a mechanism for using the funds of their members to invest directly with Government, I assure the Deputy that if the credit union movement - or any of the organisations involved with it - comes forward with a proposal, it will be very seriously examined by Government.

The Deputy referred to the banks. He is correct in stating that banks have moved away from having direct physical branch presences in inner cities, areas with local authority housing and rural areas because of the crash and the change in the way they work. I would be the first to acknowledge that the credit unions provide a vital personalised service relating to financial matters. It is an absolute priority for the Government that this should continue to be facilitated. If the credit unions have proposals they would like to see developed, particularly in respect of the issues raised by the Deputy - such as the size of deposits and the purpose for which credit union funds might be lent to Government - we would be very happy to receive them.

I am glad to say that the difficulties which beset a relatively small number of credit unions in the context of the overall banking crisis are well on their way to being resolved. We are at a point where we have a credit union movement which, even in international terms, is very well regulated so people who want to use it can be very confident that their savings will be very carefully guarded. If there are proposals for expansion, I can say on behalf of the Government that we will be very happy to hear about them from the credit union movement.