Nama deal: debtors helped uncover £7m at centre of Northern Ireland loan sale scandal
Dossier contains allegations that money was earmarked to pay 'small group' of Northern Ireland politicians
A team of special investigators working for a group of disgruntled Nama debtors managed to trace the £7m payment at the centre of the Northern Ireland loan sale scandal.
Businessmen hired a leading international legal firm to investigate the sale of the 'Project Eagle' portfolio for a huge discount to US investment firm Cerberus last year.
In the process, they uncovered the £7m sum in an Isle of Man bank account, controlled by a Belfast solicitor.
It is the latest twist in the controversy which erupted last week, when Independent TD Mick Wallace claimed in the Dáil that the money had been earmarked for a Northern Ireland politician or party.
On Friday night, sources close to the private investigation confirmed that the dossier in the hands of the businessmen contains allegations that the money was in fact earmarked to pay a "small group" of Northern Ireland politicians from two political parties.
The sources revealed that investigations have identified the names of up to four politicians from two Northern Ireland parties who, it is claimed, stood to be paid from the Isle of Man account.
"The enquiries carried out so far have thrown up the names of up to four politicians from political parties who we believe were due to be paid from the £7m," said a source with knowledge of the investigation.
"There are a lot of people in the North very, very concerned about this matter and what is due to emerge in the coming weeks," said the source.
Stormont's First Minister Peter Robinson denied he had any involvement in the Nama sale, and maintained his family has been the victim of a witch hunt.
He maintained the interest of any minister involved in the sale was to get the best deal for Northern Ireland.
The Irish Independent has also revealed that the group of businessmen has also been in contact with the US Department of Justice, which has a foreign corrupt practices investigations unit, and will be handing over the information in their possession.
It is understood that the Nama debtors have known about the Isle of Man money since January. However, the background to the controversy dates back even further.
In April 2014, Nama agreed to sell the Northern loan book, comprising distressed loans on 850 properties once valued at over €5bn, for €1.6bn to international investment company Cerberus.
After the deal went through, £7m was transferred to an account in the control of Ian Coulter, who had been the managing partner of Belfast law firm Tughans.
Tughans had acted for two bidders for the portfolio - firstly global investment firm Pimco, before it dropped out of the bidding process in March 2014; and subsequently, its rival and successful bidder, Cerberus.
Mr Coulter left the firm when an internal audit found that the fees had been diverted to the account. Nama said it was unaware of the £7m - and that it had nothing to do with the transaction.
The UK's National Crime Agency has launched a criminal investigation. The sale is set to be investigated by the Republic's spending watchdog, the Comptroller & Auditor General.
Hearings are also planned by the Northern Ireland Assembly's finance committee, which has already drawn up a list of potential witnesses.
In the US, a spokesman for the Department of Justice declined to comment.
"As a matter of policy, we generally do not comment on whether a matter is under investigation, which would include whether or not a complaint has been made," he said.
The Dáil Public Accounts Committee was told by Nama's chairman that Finance Minister Michael Noonan did not object to the agency going ahead with the sale of the Northern Ireland loan book despite learning that it had run into controversy.
Former banker Frank Cushnahan, who had been a member of Nama's Northern Ireland Advisory Board, had stood to earn £5m in fees if one of the bidders, Pimco, was successful. In March 2014, Pimco informed the agency that it proposed to pay a success fee of £15m - which was to be split three ways to US law firm Brown Rudnick, Belfast firm Tughans, via its managing partner Ian Coulter, and Mr Cushnahan.
Mr Cushnahan resigned from the Nama board in November 2013 for "personal reasons".
Nama then excluded Pimco from the bidding process in March 2014. A month later, the deal was agreed with Cerberus, which was also represented by the same law firms, Brown Rudnick and Tughans.
Q & A: The Nama deal explained
What was Project Eagle?
It was the largest single disposal of loan assets undertaken by Nama since its establishment and related to 55 debtors from Northern Ireland. The loans were secured on around 900 properties. At one point, the loans were worth €5.7bn.
Where were the properties located?
Around 68% of them were located in Northern Ireland, 18% in the rest of Ireland, 12% in Britain, and 2% elsewhere.
Why did Nama want to sell the loans and why were they sold in a job lot?
Nama's chairman Frank Daly accepted that the Northern Ireland property market was in the doldrums and that there was a lack of liquidity.
However, he said the decision to sell was influenced by the agency's need to focus on assets in the Republic of Ireland and in London. Mr Daly said there were very few of the assets which would have interested purchasers if they had been sold individually.
Could Nama have got a better price if it had waited longer before selling the loans?
Nama chief executive Brendan McDonagh doesn't believe so.
The "carrying value" of the loans when Nama bought them at a discount was €2.1bn. Nama sold them to global investment company Cerberus for €1.6bn and made €1.4bn from the sale when costs were taken into account.
Mr McDonagh said this week he did not believe it would have got a better price had the portfolio been sold this year.
So why all the controversy about the deal now?
Things kicked off when Independent TD Mick Wallace said in the Dáil last week that £7m had been found in an Isle of Man account, with the money being reportedly earmarked for a Northern Ireland politician or party.
Various politicians have since denied that they were the person being referred to, but Belfast law firm Tughans, who acted for Cerberus in the deal, confirmed that the money was a fee it was due which had been diverted to the account by its former managing partner Ian Coulter.
It said the money had been retrieved.
Mr Coulter left the firm in January and is the subject of a Law Society of Northern Ireland investigation.
The movement of the cash is also being investigated by the UK's top law enforcement body, the National Crime Agency. It is not known who made the £7m payment.
But that is not the only payment that has raised questions, is it?
No. The Dáil's Public Accounts Committee heard how another company, Pimco, was asked by Nama to leave the sale process after it proposed making a Stg£5m payment to a former Nama advisor, Frank Cushnahan, if it was to end up being the successful bidder. Mr Cushnahan had sat on Nama's Northern Ireland advisory committee until November 2013.
The sum was part of £15m Pimco planned to pay to advisors.
US law firm Brown Rudnick and Tughans had also stood to make Stg£5m each. The payment to Tughans was to be made via Mr Coulter.
What has the political fallout been?
Northern Ireland's First Minister Peter Robinson had meetings with both Pimco and Cerberus.
One of these meetings was with former US vice president Dan Quayle, who now works for Cerberus, days before its bid for the portfolio was accepted.
Ian Coulter was also present at the meeting, as was the Northern Ireland's Finance Minister Simon Hamilton. The meeting was not disclosed at the time and both Mr Robinson and Mr Hamilton have faced criticism because of this.
Mr Robinson's spokesman said there was nothing untoward about meeting companies who were interested in investing in Northern Ireland.
Deputy First Minister Martin McGuinness said he was not made aware of the meeting and had not approved it.
Cerberus has said it was "standard operating practice to hold due diligence meetings of this nature with government ministers".
Nama is also facing criticism, isn't it?
Yes. Some TDs on the Public Accounts Committee have questioned the agency's judgment.
They believe Nama should have abandoned the sales process after learning of the proposed payment to Mr Cushnahan.
Nama said it had ensured Cerberus gave an undertaking no third-party fees were being paid in connection with its acquisition of the loans. It says the sales process was robust, competitive and secured the best outcome for the taxpayer.
Who’s who in Nama loans row?
The former Northern Ireland Finance Minister wrote to his southern counterpart Michael Noonan in June 2013 passing on a letter from US law firm Brown Rudnick, which was acting for clients interested in buying Nama's Northern Irish loans portfolio. Mr Noonan told Mr Wilson the prospective buyers should contact Nama directly.
The office of the Northern Ireland First Minister supplied Nama with a memorandum of understanding apparently agreed between the Northern Ireland Executive and Pimco, should it be the successful bidder.
The terms were favourable to Nama debtors and required Pimco to invest in Northern Ireland and to use local construction, professional and non-professional services.
Nama did not engage in any discussions in relation to the memorandum. Mr Robinson also had meetings with Pimco and Cerberus. He met with Cerberus representative Dan Quayle, and Ian Coulter, on March 25, 2015, just days before its bid was selected by Nama. The meeting was not publicly announced.
Northern Ireland's Finance Minister was also present at the meeting with Mr Robinson, Mr Quayle and Mr Coulter.
The former US vice president is now chairman of Cerberus Global Investments. The company manages $25bn in investments worldwide.
It says there was nothing untoward about Mr Quayle's meeting with Mr Robinson and that it was part of the company's due diligence process.
A Cerberus spokesman said it was "standard operating practice to hold due diligence meetings of this nature with government ministers".
The former managing partner at Tughans in Belfast, the law firm which acted for two of the companies bidding for Nama's Northern Ireland loans portfolio, Pimco and the eventually winners Cerberus.
Pimco had proposed to pay a £5m success fee to Tughans via Mr Coulter, but the payment was never made after it had to withdraw from bidding.
Some £7m in fees due to Tughans was lodged in an Isle of Man account controlled by Mr Coulter. The money was later retrieved and Mr Coulter left the law firm.
A former banker who was appointed to Nama's Northern Ireland advisory committee.
He resigned from the committee in November 2013. Five months later Nama learned that Pimco planned to make a £5m success payment to him if it proved to be the successful bidder.
The revelation prompted Nama to ask Pimco to exit the bidding process.
Northern Ireland's Deputy First Minister said he had not been made aware of the Quayle meeting at the time and had not agreed to any such meeting. He said he only learned about it as a result of a media query.