Dáil watchdog slams Nama for failure to remove Frank Cushnahan as adviser

Nama should have removed its adviser Frank Cushnahan when connections to the bad bank's debtors were declared, the public accounts committee said

NAMA's decision not to remove adviser Frank Cushnahan after it emerged he was representing some of its northern debtors was a "failure of corporate governance", the Dáil's public spending watchdog has said.

The Public Accounts Committee's (PAC) report into the sale of Nama's Northern Ireland portfolio in 2014 also concluded that the Republic's 'bad bank' lost £162m in the deal with US vulture fund Cerberus.

Nama has insisted that the sale provided a better financial outcome than any alternatives.

The £1.24 billion disposal of 'Project Eagle' hit the headlines in 2015 when independent TD Mick Wallace alleged that £7m lodged in an Isle of Man bank account was earmarked for a Northern Ireland politician or party.

Mr Cushnahan, a former chairman of Belfast Harbour Commissioners and Red Sky, was appointed to Nama's Northern Ireland Advisory Committee in 2010 on the recommendation of Stormont's then finance minister Sammy Wilson.

During his three-year stint on the committee, he was also advising seven companies whose debts were controlled by Nama.

Despite declaring this interest to the bad bank, he continued to hold his position.

Last year, BBC Spotlight broadcast secretly taped conversations in which Mr Cushnahan appeared to accept a £40,000 cash payment from Co Down developer and Nama debtor John Miskelly.

Mr Cushnahan has consistently denied any wrongdoing and Mr Miskelly also said "payments made by me to any persons have been lawful".

Mr Cushnahan was also linked to a bid for Project Eagle by US investment fund Pimco, which withdrew from the process over concerns about paying 'fixers' fees'.

The PAC said the Belfast-based businessman's alleged involvement with bidders could damage Nama's reputation and have "negative implications" for any future disposals.

Elsewhere in the report, PAC chairman Sean Fleming said it was not "procedurally appropriate" for finance minister Michael Noonan to meet senior Cerberus representatives the day before the Project Eagle bid closing date.

Mr Noonan and committee members from Fine Gael have contested the finding.

"It is disappointing that unjustified and unfounded views have made their way into the final iteration," the finance minister said.

"I refute absolutely the validity of any suggestion that I or my officials acted inappropriately in meeting with Cerberus in March 2014."

Taoiseach Enda Kenny later rejected any suggestion Mr Noonan should quit over his involvement in Project Eagle.

"The PAC has always been an independent committee of the Oireachtas and I respect that, but Michael Noonan has acted entirely appropriately in this matter," he said.

"He went before the committee in a voluntary capacity, he spent five hours in front of the committee, he was asked no question about this and clearly his own letter that is included in the report points out the distinction between the role of the minister for finance and the commercial activities of Nama."

According to the PAC chairman, when the Nama board was deciding to set its minimum price for the sale, it already had an indicative offer on the table from Pimco.

Mr Fleming said: "When you compare the Pimco offer to the actual sales process approved by Nama, there are remarkable similarities in terms of sales strategy, sales price, sales process and financial conditions.

"I believe that Nama was influenced by the Pimco offer when deciding on the minimum reserve price and key elements of the sales process."

He said the confidentiality of the sales process was later lost through media reports and Nama refused entry to the competition to eight of 10 firms expressing an interest in joining the sales process.

Ultimately only two firms submitted bids.

Mr Fleming also said the decision to destroy contemporaneous notes of board meetings has undermined Nama's ability to explain and account satisfactorily to the PAC for its decision-making processes.

Sinn Féin leader Gerry Adams last night said the PAC's report showed a commission of investigation was needed into the sale.


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