Project Eagle sale strategy ‘flawed’

The Oireachtas report into sale of NAMA’s Project Eagle loan portfolio, which is expected to be severely critical of the agency’s sale strategy in getting value for money for the Irish taxpayer, has been delayed further over disagreement among members of the Public Accounts Committee (PAC).

In the melee surrounding the delay in the publishing of the Public Accounts Committee (PAC) report on NAMA’s controversial Project Eagle report and a battle by Fine Gael to have criticism of Finance Minister Michael Noonan omitted from the report, an interesting exchange between NAMA Chairman Frank Daly and the Dáil’s Public Accounts Committee passed somewhat under the radar.

The exchange, which occurred during one of Daly’s numerous appearances before the committee, referred to the destruction of documents containing information from meetings critical to the controversial €1.6 million Project Eagle deal.

It was revealed that the agency did not keep notes used to prepare the minutes for two meetings, during which the NAMA board decided to sell its Northern Ireland loan portfolio. The PAC is investigating the sale of the portfolio to US firm Cerberus, which the Comptroller and Auditor General (C&AG) estimates could have cost the Irish taxpayer up to €200 million.

Responding to questioning from PAC Chairman Seán Flemming, Daly defended the destruction of evidence which referred to board discussions on the value of portfolio, prior to them going on the market, at meetings in both December 2013 and January 2014, saying that a secretary destroyed the notes used to compile the agreed minutes as they were no longer needed.

“This is the practice which NAMA operates and which, I understand, applies throughout the public service and elsewhere in line with best practice in corporate governance,” said Daly.

However, he did concede that it would have been “easier” for the agency had it kept the records.

NAMA and the Irish Comptroller and Auditor General have locked horns over the C&AG’s valuation of the how much the Project Eagle loans may have been worth had they not been put on the market at that time by NAMA.

NAMA dismissed the €190 million shortfall highlighted by the C&AG as “fundamentally unsound and unstable”.

The Oireachtas report by the PAC was expected to be published already but a failure to reach agreement on a draft document within the committee on some key elements have caused further delay. One of the main disagreements centres on perceived criticism of Minister for Finance Michael Noonan. The draft report concludes that it was “not appropriate” for him to meet with representatives of Cerberus the day before the bidding process ended.

Fine Gael have argued that the line be removed from the report, stating that Noonan was not questioned on the aforementioned meeting during his appearance before the Oireachtas committee, denying him due process and implying wrong doing. Noonan has also stressed that the minutes of the meeting have been printed in full on the Department’s website.

Fine Gael have identified the criticism as a red line on signing off on the document. Other concerns they have raised include the recommendation for a commission of inquiry to be established.

It is believed that the final report will be heavily critical of NAMA and how it conducted the sale of Project Eagle. Among suggestions that the agency should have conducted a much more detailed risk management process, the report also suggests that advisor to NAMA, Frank Cushnahan, should have been removed from its advisory committee in Northern Ireland, due to his connection with up to seven debtors, whom he also consultant with. Cushnahan disclosed his interests to NAMA but was allowed to continue in his role.

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