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Nama: Irish government agrees to Project Eagle probe as SDLP calls for joint investigation team

Published 15/09/2016

The Republic's so-called 'bad bank' is subject to numerous investigations.
The Republic's so-called 'bad bank' is subject to numerous investigations.

The Irish government and opposition parties have agreed that there should be a statutory investigation into Nama following a report by the Republic's spending watchdog.

The report found Nama lost up to £190m on the Project Eagle sale to US investment fund Cerberus in 2014.

The Comptroller and Auditor General (C&AG) said Nama undervalued loans associated with the 800 properties in the portfolio when it slapped on a £1.3bn price tag.

An outline for an inquiry is now expected to be debated in the Dail when it returns at the end of the month.

It warned Nama that it should have been concerned after one bidder, US investment fund Pimco, alerted it to a "success fee" payment of £15-16m for three parties behind the scenes and pulled out of the process.

The C&AG said Nama was warned by Pimco that the money was to be shared equally by Frank Cushnahan, Nama's former Northern Ireland adviser, Brown Rudnick, a US law firm that ultimately acted for two bidders, and a managing partner of Tughans, a Belfast law firm subcontracted to assist in the deal. Mr Cushnahan has denied any wrongdoing.

The watchdog's audit found Nama was subsequently told by Cerberus that it had a separate "success fee" arrangement with Brown Rudnick and Tughans and money would be split 50/50.

The C&AG report also revealed that Nama reported a net loss of £162m on sales of assets held by Northern Ireland debtors in 2014.

The Project Eagle deal with Cerberus has been dogged by scandal for more than a year, including £7m linked to it being found in an Isle of Man bank account.

Former managing partner of Tughans, Ian Coulter, resigned after it was unearthed.

Nama said it categorically rejected the C&AG's findings and insisted it got the best price and one that could not be beaten today.

"There is nothing in the report that changes the unanimous view of the Nama board that the Project Eagle sale was the best achievable outcome for the State either back in 2014 or now in a post-Brexit environment," chairman Frank Daly said.

One of the big issues in the midst of the controversies has been the cross-border aspect of the deal, in particular the inability of parliaments to compel witnesses from overseas.

Investigations have been launched by the UK's National Crime Agency, the US Department of Justice's Securities and Exchange Commission, as well as a parliamentary inquiry in Stormont.

SDLP leader Colum Eastwood MLA has called for a joint investigation team comprising the PSNI, NCA and Garda Síochána.

Mr Eastwood also said that his party would publish a draft Bill to amend Westminster legislation to allow for joint North-South investigations.

He said: "It is time for action and certainty on getting to the truth around NAMA. This is challenging, there’s no doubt about it - the cross-border nature of the issue and the resistance to truth by some are just two examples. But every effort still needs exhausted.

"It simply does not fly that any inquiry must wait for the NCA investigation. There was a public inquiry and a police criminal investigation running in parallel following the murder of Stephen Lawrence. We can and should learn from that approach.

"Today the SDLP is publishing proposals to help get to the truth. The party has been in contact with the Irish Government, we have had discussions with Irish Labour and next week I’ll meet with other parties, all in the effort to develop thinking and identify how to get to the truth. 

"The SDLP proposals are complementary to those published by the Irish Labour Party in Dublin today. We welcome and endorse those proposals.

"One requirement is to establish a joint PSNI,NCA and an Garda Síochána investigation team in relation to criminal allegations. Provision exists for this approach and it should be deployed now. This would help build confidence that all the evidence will be pursued. I have written to the PSNI, an Garda and the Justice Ministers North and South to recommend this approach.

"A second requirement is legislation for joint North-South investigations. The SDLP has a draft Bill to amend the flawed 2005 Westminster Inquiries Act which would make precisely this provision in relation to public inquiries. This will now be circulated at Westminster and elsewhere as further legislation is developed to make fresh provision for North-South models of investigation.

"A third requirement is to attempt to make it harder for those with information to evade any Dublin inquiry or commission of investigation. There must be requirements on the NI government, its departments and agencies in addition to other financial regulatory bodies to co-operate with a Dublin inquiry.

"A change in the law in Dublin authorising an inquiry or commissions to approve memoranda of understanding in relation to the production of papers and attendance of persons from outside the jurisdiction would expose those who refuse to share information or refuse to attend to give information. The party has shared this proposal with Irish labour.

"The SDLP will work with the Irish government and parties in Dublin to advance all of this. I will urge the PSNI Chief Constable to adopt joint investigation when I meet him next Thursday."

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