NAMA, ITS NORTHERN Ireland loan book and a businessman named Frank Cushnahan are all back in the news today.
All three featured in a BBC Spotlight programme, billed as revelatory, last night. The programme alleged that Cushnahan was caught on camera saying that he was due to be paid a ‘fixer’s fee’ of £5 million (€6.4 million) in relation to a Nama deal.
To understand the significance of that, let’s go back to the beginning of this story.
In 2009 Nama, the so-called bad bank, was set up to deal with the collapse of the property bubble in Ireland. It took on billions of euro worth of property development loans. Within that book was about £4.3 billion of Northern Ireland property loans.
Once established, a Northern Ireland Advisory Committee was set up within the agency to deal with the region’s loan book.
Former banker and well-connected businessman Frank Cushnahan was appointed to that committee by the DUP, a political party he has links with (he previously worked as the director of the Office of the First Minister and Deputy First Minister).
Nama decided to sell the entire £4.3 billion property loan book – a portfolio that became known as Project Eagle within the organisation.
Once that plan to sell it was in place, Cushnahan began talking with US investment fund Pimco about the possibility of buying the entire portfolio.
He did this without Nama’s knowledge – or permission – at the time.
Pimco expressed an interest in buying the property portfolio so Cushnahan met with the group as they prepared to make their bid to Nama.
He was due to be paid for his help if the deal got over the line. However, that deal collapsed when Nama learned of Cushnahan’s dealings with Pimco.
Well, now that Pimco couldn’t buy the loan book because of the conflict of interest, a new buyer was needed.
Another US company called Cerberus popped up and bought the large portfolio for £1.241 billion (€1.5 billion). The deal was struck on assurances that no one involved in Nama (which would include Cushnahan) was involved.
The deal went ahead.
Importantly, there were two law firms involved in advising on the deal: one based in America called Brown Rudnick and Belfast firm Tughans. The latter firm was paid £7.5 million for its work.
Tughans – the law firm advising Cerberus on this side of the pond – carried out its usual annual audit in January 2015.
However, something wasn’t quite right. A transfer for £6 million (€7.7 million) to an Isle of Man bank account was spotted. The firm’s managing partner Ian Coulter resigned following the discovery and the UK’s National Crime Agency began a probe.
Cushnahan denied the money was meant for him, claiming he was not involved in the Cerberus deal at all.
Last year when the controversy last raised its head, he told the inquiry charged with investigating the disposal of Nama’s Northern Ireland portfolio that he never had any “meetings, dealings, correspondence or contact of any kind” with Cerberus or its representatives.
The BBC Spotlight programme showed Cushnahan claiming that he was due to be paid a fixer fee in relation to the Cerberus deal.
The investigative journalism team, which has been working on the project for over a year, used covert recording to catch Cushnahan on camera talking about Coulter to a number of other businessmen – one of whom corroborated the version of events as portrayed by the show.
“He actually moved £6 million of it into an escrow account,” Cushinan is heard saying. Someone else at the meeting then exclaims that his biggest mistake was putting his own name on the escrow account.
Cushnahan replies:
He did that because he was then able to say, ‘There’s this, Cushnahan’s done all this work, therefore, he’s entitled to his fee’.
The recording also shows him stating the importance of his role, outlining that it was deliberately hidden because of objections from Nama.
You know when I was working on that Cerberus thing to get that thing out, he worked with me to get that. And basically all the work was done by me and him.
Not only was Cushnahan allegedly in line for payments from those who wanted to buy the property portfolio, the BBC Spotlight team claims he was also set to be in the pay of some developers who could benefit from the sale.
That would make him a triple agent in the scandal, with fingers in the Nama, property developer and new buyer pies.
Developer John Miskelly was the businessman who confirmed the details of the meeting televised last night. In a statement to the programme late on Sunday, he made clear that he had – over several years – gathered extensive evidence and records of his business meetings and dealings.
I realised that, in view of the continual suppression of my complaints to financial institutions, that this would be the only way to expose their financial misconduct and their corrupt dealings.
He said he has sent the records to the US Securities and Exchange Commission (SEC) in relation to the Project Eagle sale.
Police in Northern Ireland have already launched a criminal inquiry into the sale of Nama’s Northern Ireland property portfolio.
Well, it is. This first hit headlines in the Republic when Independent TD Mick Wallace stood up in the Dáil and told TDs that a property portfolio was sold for €1.5 billion to US private equity firm Cerberus, despite having been worth €4.5 billion.
As stated previously, Nama was established in 2009 in the aftermath of the Irish banking and property crisis. Nama’s job is to get the best return for the tax payer on the sale of property portfolios gone bad during the bust. If questions are being raised about conflicts of interest and the selling of property privately while not securing the most bang for your buck, then it is the taxpayer getting a disservice.
Today, Sinn Féin leader Gerry Adams has called for a Commission of Investigation to be set up into the sale of the Northern Ireland loan book.
Following last night’s broadcast, he said Michael Noonan, Enda Kenny and Joan Burton have repeatedly refused to recognise “mounting public concern” into the sale.
He questioned why NAMA and Minister Michael Noonan failed to abandon the sale when the other bidder, Pimco, made disclosures to them about ‘fixers’ and fee arrangements.
“There has been zero accountability from the outgoing Government on this issue and again, the taxpayer is left to shoulder the cost.”
Meanwhile, reacting to the programme last night, Wallace tweeted:
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