Nama did not refer breach for a month

Nama became aware that confidential data had been misappropriated by one of its employees, Enda Farrell, on Aug 12 but the agency did not notify the gardaí for another month, its chairman, Frank Daly, told the Oireachtas committee on finance.

Mr Daly said Nama had to make sure it had a strong prima facie case before the gardaí were notified. The consultancy firm Deloitte was retained on Aug 6 to look into the circumstances of the unauthorised purchase by Mr Farrell of a Nama property.

It was during this probe that it was uncovered Mr Farrell had forwarded sensitive information to his wife at Ernst & Young.

Mr Daly revealed it was not possible to download or copy Nama databases or email them to personal email accounts — only authorised counter-party email addresses including Ernst & Young. He stressed that Ernst & Young had no knowledge of this email transaction.

Moreover Nama did not jeopardise a subsequent Garda investigation through its own inquiry. Deloitte initially sifted through 160,000 of Mr Farrell’s emails between 2005 and 2012. This was narrowed to 92,000 emails between 2009 and 2012 and using keyword searches the offending 33 emails were uncovered.

Mr Daly said the leak had not compromised Nama’s commercial interests nor were any of Nama’s debtors prejudiced. He conceded that Mr Farrell extracted sensitive information such as how Nama paid for loans.

“But there is no evidence that he sent this information beyond himself.” The current market value of these loans is much more important than for how much they were acquired, he added.

He said Nama would not have become aware of this leak if The Sunday Times had not told it of Mr Farrell’s house purchase. “But we would have found out over time. It is a small country.”

Mr Daly confirmed that gardaí were investigating another Nama employee although he would not disclose any details of this case.

Fianna Fail’s Sean Fleming suggested that Nama and the IBRC should be merged because both were state-owned institutions with similar objectives to maximise returns for the taxpayer. But there was a potential conflict of interest between the two, he said. The deputy cited Nama’s €800m sale of Claridges, the Connaught, and the Berkeley hotels in London as an example. Anglo Irish Bank had been one of the original backers of this deal in 2005.

Nama chief executive Brendan McDonagh rejected Mr Fleming’s proposal. “I don’t believe so.”

The Nama heads were quizzed about potential conflicts of interests when ex-Nama employees leave and join other companies. The example of the agency’s ex-head of lending Graham Emmett was used. Mr Emmett joined ICG Longbow, which subsequently bought Nama assets. Mr Daly said ICG had agreed that deal with Nama nine months before Mr Emmett joined the firm. The chairman said Nama employees were bound by confidentiality agreements even when they left the agency.

One more Nama housing estate may have to be demolished, but Mr Daly refused to disclose the details. Nama had bank statements of affairs of all it debtors between 2004-07. It was cross-checking these details to ensure that no developers had put assets beyond the reach of the agency.

Nama was working with both the IDA and Enterprise Ireland to ensure there was sufficient office space in Dublin, Cork, Galway, Limerick, and Waterford.

Mr Daly said he was confident that Nama would recoup the €31.8bn it had paid the banks for €74bn of property loans. “We are cautiously optimistic about the property market. We do not see a homogenous recovery but the signs are hopeful.”