John McGuinness: Nama may have misled PAC

McGuinness said “serious discrepancy” in accounts of fixer's fee

Fianna Fail TD John McGuinness Pic:

Nama may have misled the Dáil’s Public Accounts Committee (PAC) on vital details relating to the sale of the Project Eagle portfolio when it received evidence from the state agency on two occasions last year, according to the chairman of the committee.

Fianna Fail TD John McGuinness said there was a “serious discrepancy” between how Nama presented its actions to the PAC following the discovery of a £5 million “fixer’s fee” for a former agency advisor in the North at the PAC, and how the same incident was recorded in an official Nama record published alongside the Comptroller and Auditor General’s (C&AG) report last week.

“There is a serious discrepancy between how [Nama] presented themselves as being the guardian of all that is good in this, and what actually transpired, and their own document points to the fact that they misled the Public Accounts Committee on that day,” McGuinness told The Sunday Business Post.

An appendix to the C&AG’s report contains a Nama record of a conference call between Ronnie Hanna, a senior official at the agency, and Pimco, the firm which had disclosed the previous day that former Nama advisor Frank Cushnahan was due the success fee.

In it, Hanna suggests that Pimco could have stayed in the bidding process if the Cushnahan fee was removed. There is no suggestion of wrongdoing against Hanna.

The record states: “[Hanna] enquired about ‘other options’. When Pimco asked what he meant by this, [Hanna] asked if the deal could be “shaped differently for the arrangement fee to come out”.”

The record shows that Pimco later finally withdrew, telling Nama that “it could not see how any ‘change’ would allow the organisation to continue with the transaction”.

The circumstances surrounding Pimco’s withdrawal from the process were extensively discussed at PAC on two occasions in July and October last year.

Three months ago, Brendan McDonagh, the chief executive of Nama, told the Public Accounts Committee that “if Pimco had not withdrawn from the process, we would have withdrawn it”. He added: “Nama would not allow Pimco to continue.”

Frank Daly, the chairman of Nama, said later that day that “Pimco had been exited by us”, adding that Nama “got Pimco to withdraw” and “the Pimco bid was got rid of”.

McGuinness was chairman of PAC when these exchanges took place. After reviewing the public record and the minutes of the conference call last week, he said: “I believe there is a huge inconsistency. It’s apples and oranges.

“For me, reading what Frank Daly said on that day, if he knew about this document and the conference calls, how he presented the case to the Public Accounts Committee on that day was misleading.” That is a big “if”.

Nama is thought to believe that the record strengthens their position, but Fianna Fáil finance spokesman Michael McGrath, who also reviewed the transcript, said: “That’s a weakening of what we already knew. We knew they ended the process when they found out. Now we’re discovering that they were fairly half-hearted in ending it; they were trying to see if a sale could be salvaged.

“Even if [Cushnahan] had exited the stage at that point, it would not have cleansed the whole process. From our point of view, not only should the proposed sale to Pimco have been abandoned, the entire sale should have been frozen.”

In response to a series of detailed questions, a Nama spokesman said: “Your questions suggest a complete misreading of the information supplied in the C&AG report.”

When McGuinness’s and McGrath’s comments were put to Nama, a spokesman said he had no further comment.

Cushnahan has previously denied any and all wrongdoing.