Week of revelations 'almost hard to believe'
WHAT a week last week was. I don’t think anybody could deny that the biggest corporate/political scandal ever to rock Northern Ireland was revealed. It was almost hard to believe. A previously respected and well-liked managing partner of one of Northern Ireland’s top corporate law firms, Ian Coulter, transfers £7 million to an offshore account of which, according to his previous firm and its in-the-dark partners, he was the ‘sole beneficiary.’ Mick Wallace TD said the money was intended for an unnamed politician here.
As the story unfolded, through the good work of reporters at the Irish News, the BBC and via the floor and a committee room of Dail Eireann, an earlier bidder for the tranche of property debt for which the £7m was a part success fee came into view.
It was revealed that Pimco, a US fund, would have been paying another prominent and successful Northern Ireland business man, Frank Cushnahan, who had previously been our government’s nominee to the Northern Ireland advisory committee of Ireland’s bad bank Nama, a sum of £5m, in addition to another £5m going to Ian Coulter – if Pimco managed to make the purchase. Ten million quid between them! You could hear jaws dropping as that nugget was revealed in the Dublin committee room.
It was then revealed by the Irish News that Peter Robinson’s son, Gareth, who is a lobbyist and PR consultant, was known to be close to Frank Cushnahan and previously Frank had been recommending Gareth’s services to various property and property related businesses around Belfast.
The Irish News also revealed that Gareth had organised and been paid for an event at Queen’s University for Tughans, Ian Coulter’s firm, at which his father the First Minister, was the guest speaker. If anybody was drawing inferences from this web of connections, Gareth moved to quash them quickly in a strong statement of clarification as to the unrelated and purely educational purpose of the Queen’s event three years ago as well as an unequivocal denial of any connection between him and his firm and any payments or role in the purchase of the debt by the US fund, Cerberus. His statement was silent on any current or previous connections with Frank Cushnahan however.
This story is going to run and run and won’t be resolved satisfactorily until it becomes clear what Ian Coulter was going to do with the £7m. That is the key to all of this. The National Crime Agency has been brought in by the PSNI to investigate it, so maybe they can get to the bottom of it. It is going to be very interesting.
The last thing I wanted to say may sound controversial in light of all that has happened in the last week but I’m going to say it - this is an opinion column after all. It is my very firm view that on balance, Cerberus’ purchase of the Nama Northern Ireland debt has been good for the Northern Ireland economy. For too long, many of the most entrepreneurial people in this economy were being held back by Nama, a bureaucratic, cautious machine, which for the most part slowed down development and progress here albeit for understandable reasons, the protection of the Irish tax-payer.
It can be reasonably argued that a better strategy for Northern Ireland would have been to sell the debt off in smaller packages but how long would that have taken? When NAMA made the decision to sell it in one lot, Cerberus purchased it and put a strong team of respected finance and development professionals on the ground straight away.
That team have got things moving and as a result, planning consultants, roads engineers, architects, environmental consultants, commercial agents and property lawyers are all getting busier and are back employing new people again. What Cerberus and the other funds like Lonestar, Deutsche Bank, Goldmann Sachs have done is bring international mobile capital in the billions to Northern Ireland. Of course, they’ve only done so to make a fast killing and a good chunk of the profit will exit again. Cerberus for instance, in classic ‘buy ‘em low and sell ‘em high’ style has done some deals with other funds already.
These funds have bought some smaller tranches of debt out of the big ones Cerberus bought from NAMA and RBS and in some cases, this has put the actual properties back in the hands of the original owners, who these other funds have backed. That may sound a bit mad I know but actually, in one case I know well, putting the properties back in the hands of the original owner is exactly the right thing to do – he will work them, create jobs and pump money back into the economy via sites that have lying idle for years now. And not only has he bought his own portfolio back but he’s about to complete the purchase on another large portfolio from Cerberus.
In his view and I respect it a lot, having Cerberus in the frame is many, many times better than dealing with NAMA where his company was stuck treading water for a number of years. He’s back in business because he could do a deal with Cerberus and that is good for the Northern Ireland economy. Have a great summer!
:: Paul McErlean (paul @ mcepublicrelations.com) is managing director of MCE Public Relations Ltd.