When the National Asset Management Agency (Nama) sold its Northern Ireland property portfolio to United States investment group Cerberus for £1.322 billion (€1.59 billion) in 2014, it was the North’s biggest real estate deal.
Sensational claims of misconduct in the transaction set off a political storm in Leinster House, a big UK criminal case examining the deal and investigations by the US authorities.
These issues remain to be settled, with the trial awaited in Belfast of two men who were on the buy side of the sale process. They have denied any wrongdoing – and there is no suggestion Nama was involved in the issues under criminal investigation.
The State’s “bad bank” was set up at the height of the financial crisis to take soured property loans from stricken banks as they were recapitalised by the State at vast taxpayer expense. Although Nama is set to finally close in December, it has faced questions and criticism for years over the Northern Ireland deal known as Project Eagle.
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The Nama commission was established in 2017 under the chairmanship of the late John Cooke, a retired High Court judge. When he died in 2022, solicitor Susan Gilvarry took command. After 20 interim reports and the recent extension of the commission’s time frame until April 2025, the findings are finally out in the open. More than 700,000 documents were examined.
At the heart of the affair were Dáil claims in 2015 by then Independent TD Mick Wallace that a “Northern Ireland politician or party” stood to gain from the deal after a £7 million lodgement into an Isle of Man bank account. The Isle of Man is not mentioned at all in the Gilvarry report so that aspect of the controversy remains unresolved.
However, the commission has upheld the price realised by Nama and found in unambiguous terms that the minimum price it set – £1.3 billion – was appropriate. In the event, Cerberus paid a little more than the minimum.
Such findings are important for Nama because the deal was criticised in sharp terms by the Dáil public accounts committee (PAC) and the Comptroller & Auditor General (C&AG). Nama always rejected such criticism but it stung – and the agency waited more than seven years before vindication, as it sees it, from a commission of investigation.
In a 2017 report, the PAC attacked its “seriously deficient” sales strategy. “It is, therefore, the opinion of the committee that Nama has been unable to demonstrate that by pursuing such a strategy that it got value for money for the Irish State in relation to the price achieved,” said the PAC.
A split PAC vote on such findings – with Fine Gael and Labour TDs dissenting – illustrates just how contentious the deal became. The committee heard no less than 57 hours of oral evidence.
That PAC investigation came on the heels of a damning C&AG report in 2016. “The decision to sell the loans at a minimum price of £1.3 billion involved a significant probable loss of value to the State of up to £190 million in [net present value] terms,” said the spending watchdog, highlighting a “significant probable loss of value to the State”.Such findings must now be measured against the commission’s conclusion that there was no better deal on the table and that the disposal strategy was appropriate.
The Gilvarry report said: “Where there is no evidence to suggest that another bidder was willing to purchase the portfolio at a price higher than that ultimately paid by the purchaser, Cerberus, and on the exact same terms, there is no basis on which the commission could conclude, had it been directed to, that anything other than that the best achievable price was obtained by Nama for the Project Eagle portfolio.”
Nama might well be of a mind to sing that from the rooftops. But there was criticism nonetheless of how it dealt with Frank Cushnahan, a former member of its Northern Ireland advisory committee who is one of those awaiting trial in Belfast over Project Eagle.
Despite his Nama role, Mr Cushnahan was one of three potential beneficiaries of a proposed £15 million “success fee” if a bidder called Pimco, another US firm, won the race. The fee was to be split equally between: Mr Cushnahan; US law firm Brown Rudnick, which introduced Pimco to Nama; and Ian Coulter, former head of Belfast law firm Toughans, which had been engaged by Brown Rudnick. Mr Coulter is the second person facing trial in Belfast.
Pimco withdrew after telling Nama of the fee proposal in March 2014. For Nama, this was a “serious and immediate crisis”. The commission said the decision to deal with the matter at board level was appropriate. While accepting the chairman Frank Daly acted in good faith, the commission said he “should have informed the board of the full extent of Mr Cushnahan’s disclosures of interest when the proposed success fee came to light”.
The commission states the obvious by saying the proposed fee posed a “serious reputational risk” to Nama. More than a decade later, it is still dealing with the fallout.
