Northern political forces pushed for portfolio sale to US fund say Nama chiefs

Political forces in Northern Ireland pushed for a massive property portfolio to be sold to a US vulture fund, Nama chiefs have said.

Nama offices.
Nama offices.

They were also at loss to explain why a prominent Belfast businessman was in line for an alleged £5 million fixer fee to secure a deal.

The so-called Project Eagle portfolio of 800 Northern Ireland properties and loans was sold by Nama, the Republic’s toxic assets agency, to US investment fund Cerberus for £1.2 million in 2014.

Before a parliamentary committee in Dublin, Nama director Willie Soffe signalled the agency came under political pressure from Belfast in the run up to the deal.

“I think there was a problem with part of the Northern political establishment or family with having somebody from the South there long-term,” he said.

Mr Soffe also told the Oireachtas Public Accounts Committee: “There were cross border issues, let me put it as diplomatically as that.”

Fellow director Oliver Ellingham said there was an “emotional factor” and Nama was being told “political forces in Northern Ireland would rather have these assets controlled by an American than an entity from the South.”

Mr Soffe, Mr Ellingham and another Nama director Brian McEnery were being cross-examined about an investigation by Dublin’s public spending watchdog which found Nama undervalued the portfolio by up to £190 million.

The Comptroller and Auditor General also found that US investment fund Pimco, which pulled out of an earlier bid, alerted Nama to a “success fee” or fixer payment of £15 million to £16 million for three parties behind the scenes.

Pimco said the money was to be shared equally by Belfast businessman Frank Cushnahan, Brown Rudnick, a US law firm, and a managing partner of Tughans, a Belfast law firm subcontracted to assist in the deal, the C&AG found.

Mr Cushnahan, who has denied any wrongdoing, was appointed to Nama’s Northern Ireland advisory committee by the Democratic Unionist Party.

Asked why Pimco would have offered Mr Cushnahan £5 million, Mr Soffe said: “I have no idea. It is absolutely amazing to me. I just couldn’t explain it.”

He added he had “never seen that man since he resigned” as a Nama adviser in October 2013.

Mr Ellingham said: “It would appear that the persons paying him that thought he was worth some input or value.”

Mr McEnery said: “I don’t want to speculate about what this is about.”

But Mr Soffe insisted he took “strong issue” with suggestions an alleged conflict of interest by Mr Cushnahan could have corrupted the subsequent sales process.

Mr Cushnahan may have sought to represent himself as a key pivot in the sale, but he had no influence with Nama or the price paid for the portfolio, Mr Soffe said.

The Nama director said the C&AG’s concern about Nama managing conflicts of interest was a “subjective opinion” based on hindsight.

In a hard-hitting rebuke, he said the key finding of a probable £190 million loss in the sale was “simply wrong” as it was derived from a mistaken assumption about a discount rate.

The toxic assets agency had applied a “market discount rate” of 10% rather than its usual 5.5% discount because of the state of the Northern Ireland economy and its outlook at the time, he said.

Mr Soffe’s attack on the public spending watchdog was described by several TDs on the parliamentary committee as being unprecedented in being so defensive and pejorative.

Sean Fleming, committee chairman, said: “I was shocked by your statement here today. I’d prefer if a state body would play the ball and not the man.

“Maybe you think playing the man is the best way of winning the game.

“If I was a referee, every Nama person here before us would have received a red card.”