Q&A: What exactly is the ‘Project Eagle’ scandal and why should we care?

The Government is coming under increasing pressure to establish a commission of investigation into the sale of Nama’s Northern Ireland loan book. Joyce Fegan sets out the what, who, why and when of the story.  

What is the Project Eagle scandal?

In April 2014, Nama said it had completed the auction of a huge bundle of distressed loans, known as the Project Eagle portfolio. The sale involved loans advanced during the boom years by Dublin banks to property developers in the North.

“The portfolio has a par value of £4.5bn (€5.3bn). The terms of [the] transaction are commercially sensitive and are not being disclosed,” Nama said at the time.

Who bought it?

Cerberus Capital Management, a US equity fund, was named as the purchaser. It subsequently emerged that Cerberus had paid €1.6bn for the portfolio, but only after a rival bidder, Pimco, had pulled out of the auction, in March.

Pimco had informed Nama about its concerns over the destination of legal fees.

What was in the portfolio?

The loans portfolio was secured on approximately 860 properties, mostly in the North, including large swathes of new Lagan-side commercial offices in Belfast city centre.

When did it become a contentious issue?

In January 2015, Ian Coulter, a managing partner in Belfast legal firm Tughans unexpectedly resigned. Then on July 2, 2015, Independent TD Mick Wallace made allegations in the Dáil regarding the Belfast legal firm and Project Eagle.

What were the allegations?

Deputy Wallace alleged that £7.5m in fees paid to Tughans for its work as an adviser on Project Eagle, “ended up” in an Isle of Man account. He said those monies were “reportedly earmarked for a Northern Ireland politician”.

The BBC Spotlight programme and the Irish News in Belfast, in subsequent months, reported on more allegations.

How did Nama respond?

“If there was wrongdoing on the part of some parties involved on the purchase side of the transaction in Northern Ireland, including those who acted as professional advisers to potential purchasers, we in Nama have no more knowledge of that than what has been publicly disclosed to date,” Nama chairman Frank Daly told the Oireachtas Public Accounts Committee, in October 2015.

What and when was the Northern Assembly Project Eagle Inquiry?

It was announced in the summer of 2015 that the Finance Committee of the Northern Ireland Assembly would hold an inquiry into Project Eagle sale.

It released its report in March 2016, stating there were concerns around the sale and purchase process of Project Eagle.

What happened next?

Politicians continued to call for a Commission of Investigation to be set up to look at the sale. In Dublin, the Comptroller and Auditor General (C&AG), launched an investigation into the sale of Project Eagle. The C&AG has reportedly found “shortcomings” and “irregularities” in the sales process. It has reportedly found that taxpayers have lost out on “hundreds of millions of euros” as a result of the deal.

READ MORE ON THIS STORY: Government under pressure to probe Nama’s ‘Project Eagle’ sale.