C&AG defends methods used to investigate Nama’s Project Eagle sale

The State’s spending watchdog has strongly defended methods used to probe Nama’s Project Eagle, but admitted losses from the deal may be more than the estimated £190m (€220m) for taxpayers.

Comptroller and Auditor General (C&AG) Seamus McCarthy said yesterday he did not consider the £1.3bn sale of loans linked to property in the North was not a “well-designed sales process”. He was answering questions from the Public Accounts Committee (PAC), which is examining his critical report into Nama’s Project Eagle sale.

The C&AG report raised concern about potential conflicts of interest over fixer fees, how the sales process was restricted, and how the deal potentially resulted in losses of £190m for taxpayers.

In a statement to PAC, Mr McCarthy stood over the methods used to audit Project Eagle: “I am satisfied that the team tasked to carry out the Project Eagle examination had the requisite skills, knowledge, experience, and expertise to do the required work.”

He said attempts to recruit outside consultants for the report had failed, though two officials from Britain’s national audit offices evaluated the C&AG work.

Mr McCarthy told the PAC that Nama were unhappy from day one with the report. He reiterated that Nama had taken a narrow view when it emerged that advisor and businessman Frank Cushnahan was set to receive a £5m fixer fee working for underbidders Pimco on the deal.

The C&AG report questions why more details were not sought from Mr Cushnahan about any conflict of interest and why the compliance unit of the NTMA, the parent group of Nama, was not consulted. Mr McCarthy agreed that, from his investigation, a sudden change in direction of the sale of the Northern Ireland loans had occurred. The initial focus was that there would not be a firesale and that the loans pertained to mainly Northern properties, but this later changed.

PAC member Shane Cassells questioned what Mr McCarthy thought of Nama’s “bully boy tactics” and its criticism of his report and methods used.

He accused Nama of approaching the report in a way “that strikes me as a ‘Del Boy’ attitude”.

Mr McCarthy also admitted to PAC’s Alan Kelly that, in fact, the loss figure of £190m could have been more or even less. “There is a margin around that figure,” said Mr McCarthy.

The C&AG noted how Nama had not conducted any additional valuations before the sale and also took issue with the discount applied to it.

Mr McCarthy refused to answer queries from PAC members on whether anyone made any “personal gain” from Project Eagle.

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