Category: NAMA

Journalist Gavin Sheridan wins major case against NAMA

Congratulations to journalist Gavin Sheridan and solicitor Fred Logue for their major victory against NAMA in the Supreme Court yesterday.

Gavin and Fred having been working very hard on this case for over five years and their victory deserves the thanks of all those interested in transparency and accountability in government.

Two things about this case.

One: It is a major blow to the most deadly, most utilised weapon of the state – secrecy. The all pervading culture of secrecy, deeply ingrained in all government agencies, is principally responsible for the massive criminality that’s rampant in the financial, property and political sectors, to name but a few.

Two: Unfortunately, Gavin’s professionalism as a journalist, his doggedness in pursuing a story, pursuing an injustice right to the end is not the norm in Irish journalism.

This has to change if secretive state agencies like NAMA are to be successfully challenged.

Journalist Gavin Sheridan wins significant victory over Nama secrecy

Well done to journalist Gavin Sheridan for his significant victory against the oppressive secrecy of the National Asset Management Agency (Nama).

Gavin spotted a loophole in Nama’s secrecy defences by way of applying for information through a statutory instrument known as the Access to Information on the Environment Regulations.

Nama responded by claiming that it was not a public authority and so did not come under the remit of the statutory instrument. The judge in the case put paid to that particular argument.

The basis for Nama’s claim that it was not a public authority within the meaning of the European regulation was “absurd”, Mr Justice Mac Eochaidh said in his judgment.

At the core of Nama’s appeal was the claim that the words ‘and includes’ in the European regulations were to be understood as ‘may include’.

The judge rightly rejected the claim but that such ridiculous arguments can be made by Irish authorities in order to preserve the powerful weapon of secrecy is a demonstration of how warped and dangerous the thinking in such authorities has become.

Gavin, who has been fighting Nama on this issue since 2010, said that the outcome was a good day for the public’s right to access information.

Journalist Gavin Sheridan forces NAMA into the High Court

RTE gave great coverage to the ‘good news’ that NAMA made an operating profit in 2010.

Unfortunately, the broadcaster seems to have no interest in covering the much more important story concerning the ongoing battle by journalist Gavin Sheridan in trying to extract information from NAMA.

Gavin spotted a chink in the almost impenetrable armour of NAMA’s secrecy laws when, instead of submitting a Freedom of Information request, he asked for information by way of an Environmental Information regulation request.

The Ombudsman and Information Commissioner, Emily O’Reilly ruled in favour of Gavin forcing NAMA to take the case to the High Court.

State secrecy: A powerful and extremely destructive weapon

On 31st January last I rang the Office of the Director of Corporate Enforcement (ODCE) to inquire whether the Bailey brothers case was still ongoing.

Over the years I have made many such calls to the ODCE to check on the progress of various cases.

My questions were always basic – Was the case still active, how was it progressing, if it was complete what was the outcome and so on. Invariably, my questions were answered and I was happy enough.

On this occasion the shutters were pulled down.

The ODCE refused to answer even the most basic of questions and when I persisted I had secrecy legislation quoted to me as justification for refusing to answer questions.

I submitted my questions in writing to the ODCE and received, by post, a letter from an Assistant Principal Officer informing me that not only would my questions not be answered but that the ODCE did not have tell me, or anyone else, whether a specific company or individual was even under investigation.

It was obvious from the content of this letter and the tone of phone converstations with ODCE staff that the submission of a Freedom of Information request would be a waste of time so, instead, I made a formal complaint to the Ombudsman.

To my surprise the Ombudsman said that she could not examine complaints concerning the ODCE as it was outside the remit of her office.

I was advised to contact the Department of Jobs, Enterprise and Innovation for assistance.

My request to this state agency was also met with a brick wall. I was informed that the Department did not have the authority to instruct the ODCE to disclose information.

So, in summary:

The ODCE refuses to provide even the most basic information regarding its activities, citing secrecy legislation.

The Ombudsman has no power to compel him to release any information.

The government department/minister under which the ODCE operates is also powerless to act.

This, in effect, makes the ODCE an untouchable State agency. No authority in the land possess the power to question its decisions.

Not even a High Court judge can question its activities.

This was highlighted recently when Mr. Justice Peter Kelly was firmly and publicly rebuked by the DPP for having the temerity to challenge the ODCE’s handling of the ‘investigation’ into Anglo Irish Bank.

This granting of absolute and unquestioning power to a State agency poses serious dangers not just to Ireland and its people but also to the officials working within that agency.

If an official was suffering from some sort of personal crisis, say, for example, an addition to gambling, he would be extremely vulnerable to exploitation from any number of sources intent on perverting the course of justice.

If an official, observing that he is subject to little or no oversight and that his actions/decisions are protected by an impenetrable wall of secrecy laws, could easily exploit the situation to his own advantage.

If an official was beholden to a political party for his position he could find himself coming under pressure not to pursue a case against a friend of that party.

I want to stress that I am not for a moment suggesting that anyone within the ODCE is involved in any such activity.

I am making the point that such activities are a reality in every country in the world and Ireland is no exception.

All humans are vulnerable to such dangers and it is because of such vulnerability that functional democracies ensure that a system of checks and balances are in place which are designed to protect the office holder, the state and its citizens.

Checks and balances such as a proper Freedom of Information Act and a strong, independent oversight authority with the power to demand answers from government agencies that are clearly unable or unwilling to do their jobs properly.

Ireland does not and never has had such checks and balances in place.

If such checks and balances were in place in Ireland no State authority would be allowed to refuse to say if an individual or company was under investigation or not.

Such basic and completely harmless information is immediately and unquestionably available in all functional democracies.

If such checks and balances were in place in Ireland no State authority would be allowed to endlessly prolong investigations into the activities of powerful and influential people.

The key sentence in the letter I received from the ODCE is:

I regret that it is not possible to make public details of any of our cases, nor even to discuss whether a specific company or individual is actually under investigation by the Office (my emphasis). This is because of the statutory duty of confidentiality imposed on the Director of Corporate Enforcement and his officers under Section 17 of the Company Law Enforcement Act 2001.

I do not accept that the State/ODCE has the right to take upon itself the power of such absolute secrecy and, at the same time, claim Ireland is a functional democracy.

The denial of such basic information by a state agency moves the scandal from one of routine investigation into alleged corruption to that of a serious abuse of power by a State agency.

The assumption by the ODCE of such draconian power, whether legitimate or misguided, places Ireland within that category of undemocratic states where the interests of the state and its friends are deemed to be more important than the interests of ordinary citizens.

The methods used may differ but the results are exactly the same – the complete denial to citizens of any information whatsoever.

Citizens living in such undemocratic state are denied the right to know what their government/state agencies are doing, or perhaps more importantly, not doing in their name.

Such absolute denial of information, has the effect, whether intentional or not, of protecting the corrupt and the interests of those who benefit from protecting the corrupt.

And we can see, by even the most cursory examination of the hundreds of scandals over the past few decades, that in practically every case it is the corrupt who win out and Ireland’s reputation and ordinary citizens who pay the price.

Unwarranted and unexplained delay, in addition to absolute secrecy, is also a feature of the dysfunctionality of Ireland’s administrative system.

Again, whether intentional or not, secrecy and delay have the undeniable effect of protecting the corrupt and, as a consequence, damaging the best interests of Ireland and its people.

Despite claims by politicians and officials, the Bailey brothers case is not particularly complicated. The facts of the case have already been well established.

Briefly; the Bailey brothers:

Made a corrupt payment to a politician and to a civil servant.

Obstructed and hindered an Oireachtas tribunal on several occasions.

Gave false evidence under oath.

Engaged in massive tax evasion.

There is not the slightest doubt that if such activities were engaged in in a functional democracy the case would have been dealt with immediately by the police and courts and would almost certainly have resutled in long jail sentences.

In Ireland the ODCE has been ‘investigating’ for over six years with the absolutely minimal aim of banning the Bailey brothers from acting as company directors for a limited period of time.

Yet here we are, more than six years into the case, and not even a hint of accountability.

In functional democracies similarly long delays would attract strong and persistent questioning from media, opposition politicians, Government ministers and ordinary people.

The enforcement authority in charge of the case would, at the very least, be forced to provide a comprehensive explanation for any serious delay.

It is an undeniable fact that the legal maxim; justice delayed is justice denied, which is accepted in all functional democracies, does not operate in Ireland when it comes to investigating the activities of powerful and influential people.

Of the very many serious cases of corruption over the previous few decades involving powerful people I can think of none that were dealt with in a quick and efficient manner.

In practically all these cases those involved were never brought to justice. The indications are that the current investigations into the activities of certain bankers will result in the same predictable outcome.

But the core point I want to make here is that, unlike all functional democracies, Ireland bestows absolute power on senior individuals within its enforcement agencies.

In Ireland there is no oversight of such individuals, no state authority has the power to effectively question their decisions, motives or agendas.

No politician, even if they had the courage or will, can, it seems, challenge the activities of such individuals.

Just last week we witnessed the latest episode in the Bailey brothers scandal when NAMA, another state agency bestowed with draconian secrecy powers, refused to answer questions regarding the granting of €13 million in funding to a company controlled by the brothers.

Fianna Fail TD and chairman of the Public Acccounts Committee, John McGuinness, said that the taxpayer was entitled to precise and accurate information regarding deals done by NAMA.

This is incorrect.

NAMA, the ODCE, the Financial Regulator and indeed most government agencies operate under an oppressive cloak of draconian secrecy laws which are specifically designed to avoid releasing precise and accurate information.

Whether intentional or not these secrecy laws provide watertight and ongoing protection to the corrupt individuals and organisations that have brought Ireland to the edge of ruin.

State secrecy is a powerful and extremely destructive weapon that causes serious damage to the best interests of Ireland and its people.

Copy to:
ODCE
Ombudsman
Department of Jobs, Enterprise and Innovation

I have included below the replies to my queries from the ODCE, the Department of Jobs, Enterprise and Innovation and the Ombudsman.

Dear Mr. Sheridan,

Your request for information has been passed to me for attention. Your request was in three parts:

• Is the ODCE currently engaged in proceedings or any other action against Michael and Thomas Bailey, directors of Bovale Developments?
• If such proceedings are in place what stage are they currently at?
• If they are complete what was the outcome?
I regret that it is not possible to make public details of any of our cases, nor even to discuss whether a specific company or individual is actually under investigation by the Office. This is because of the statutory duty of confidentiality imposed on the Director of Corporate Enforcement and his officers under Section 17 of the Company Law Enforcement Act 2001:

17.-(1) Information obtained by virtue of the performance by the Director of any of his or her functions which has not otherwise come to the notice of the public, (ODCE emphasis) shall not be disclosed, except in accordance with law, by any person…
As certain information is in the public domain, you already have access to that information, as it is available on our website. To facilitate you, I have replicated below the information already published.
• Press Statement dated 31 August 2006 at PART I
• High Court Judgement dated 1 November 2007
• Supreme Court Judgements 14 July 2011
• High Court Judgement of 1 November 2007
This is the sum total of information that can be released, for the reasons outlined above. I hope this is of asistance to you.
Yours sincerely
Assistant Principal Officer

Dear Mr Sheridan,

I refer to your email below the content of which has been noted.
In response to your first question I can confirm that under Section 17 of the Company Law Enforcement Act 2001 the Department does not have the authority to instruct the Director of Corporate Enforcement to disclose information. Section 17 of the 2001 Act relates to the disclosure of information and sets out the independence of the Director.
In relation to question two, the Director is a statutory independent officer and as previously stated under Section 17 of the Company Law Enforcement Act 2001 the Director is not in a position to make available information relating to any case or indeed to discuss whether a case is under investigation.
I hope that you find this information helpful.
Kind regards

Dear Mr Sheridan,

I refer to your recent correspondence in connection with ODCE.
The Ombudsman may investigate complaints against Government Departments and Offices, Local Authorities, the Health Service Executive, An Post and bodies within the remit of the Disability Act, 2005. The Ombudsman cannot examine complaints concerning the ODCE as it is outside the remit of this Office. The Department of Jobs, Enterprise and Innovation may be able to assist you with this matter. I regret therefore that we cannot be of assistance to you in this matter.
Yours sincerely

NAMA chief Frank Daly: An attitude that destroyed our country

Last June I wrote an article entitled:

Frank Daly, CEO of NAMA, is not to be trusted.

Ombudsman Emily O’Reilly is probably of the same mind.

Arguing that the Gardai, NTMA and NAMA should all come under the Freedom of Information Act she quoted the following comment by Mr. Daly (Marian Finucane Show, Sat. 10th March).

You can have commercial viability or you can have transparency but you can’t have both.

Ms. O’Reilly likened Daly’s comment to a particular episode of Yes Minister in which Sir Humphrey says to Prime Minister Hacker, who was all for open government;

You can have openness or you can have government but you can’t have both.

The tragedy for Ireland is that while Yes Minister was great comedy and provided hilarity for the nation, Daly’s comment is sinister and is typical of the attitude that has destroyed our country.

NAMA: Accountable to nobody

The National Assets Management Agency (NAMA) came into being as a result of a panicked government reaction to the collapse of the economy.

It was given enormous powers and cloaked in a blanket of secrecy laws that would have been the envy of the most ruthless KGB chief.

The organization has not been slow in exercising its power.

The Taoiseach, allegedly the most powerful man in the state, was recently publicly humiliated by the head of NAMA, Frank Daly when he, Enda Kenny, dared to ask questions of the organization.

The Government has now expressed alarm at the latest madcap scheme dreamed up by this all powerful agency which involves manipulating the property market.

The key sentence in the report is:

The agency does not need Government approval for the scheme to proceed.

This is an incredible and extremely dangerous situation.

An all powerful organization that’s accountable to nobody, that operates outside state control; that operates in absolute secrecy, and, most disturbingly of all, that operates within a state where business and political corruption is still endemic.

The future is not bright for the people of Ireland.

Journalist Gavin Sheridan wins major victory over NAMA

Online journalist Gavin Sheridan (my nephew) is to be heartily congratulated for taking on the monolith that is the National Assets Management Agency (NAMA) and winning.

The Information Commissioner has ruled that NAMA is subject to freedom of information requests.

This ground breaking decision has come about after a great deal of technical and forensic legal work by Gavin over many months (See full details on Gavin’s blog, The Story).

NAMA is not subject to freedom of information requests in the normal sense but Gavin discovered a loophole in the Soviet style secrecy laws that prevent Irish citizens from knowing what’s going on in NAMA.

As I have said on many occasions, secrecy is the most powerful weapon of a corrupt state and Ireland is the most secretive and most corrupt state in the Western world.

Gavin’s dedicated work is helping to break down that corrosive secrecy and for that the people of Ireland should be grateful.

I include the Irish Examiner report below.

Irish Examiner

Key ruling may leave NAMA open to inquiry

By Claire O’Sullivan

Thursday, September 15, 2011

GREATER transparency around the workings of the highly secretive NAMA is expected after the Information Commissioner ruled that it is subject to freedom of information requests.
Financial experts believe the breakthrough will also help better predict when the property market will bottom out.

In a landmark ruling, the Information Commissioner has decided the agency should be subject to information requests under environmental freedom of information.

Freedom of Information campaigners also believe the decision could leave Anglo Irish Bank open to inquiry.

The ruling emerged after Gavin Sheridan, a Dublin-based online journalist, sought information on the body via the 2007 freedom to environmental information statutory instrument.

NAMA refused to supply the information, saying the refusal was justified on the grounds that it is not a public authority within the meaning of the 2007 regulations

However, Information Commissioner Emily O’Reilly found that the national property company was not justified in its action and she annulled the original refusal, saying it was a public authority within the meaning of the regulations.

It is expected that NAMA will attempt to appeal this latest review. It has up to eight weeks within which to do so.

Professor of finance at Trinity College, Brian Lucey, said the decision was important, as it should allow taxpayers to see “what business NAMA are doing, who they are doing it with and for how much”.

One of the basic problems with NAMA, he said, is its opaque nature.

“This opacity has hugely hampered the information discovery in property. We need such information discovery if we are to get to the true state of property and property prices.

“Secondly, NAMA’s opacity has been a huge liability on the public as they have pretended that they could not be transparent and efficient. The responsibility to be transparent cannot be dodged by a public body like NAMA.”

NAMA fails to deny very serious allegations

On the 27th January last Fianna Fail Senator Mark Daly made a series of very serious allegations on Today with Pat Kenny against the National Assets Management Agency (NAMA).

The allegations are as follows:

That NAMA is breaking the law by failing to hold pubic auctions or competitive tendering for the sale of public assets within its remit.

That NAMA is allowing some properties to be sold back for virtually nothing to the original owners.

That NAMA is facilitating a scam of monumental proportions whereby friends of the original borrowers are putting in false bids for assets thus preventing Irish taxpayers from obtaining the maximum value from the assets.

That the scam is happening wholesale and without any transparency whatsoever.

That the scam, although widely known about within official circles, is being ignored by the authorities.

That within the next six months the best properties will be cherry picked by the ‘scavengers and vultures’ resulting in a very serious loss for Irish taxpayers.

The following is NAMAs response to the allegations:

It (NAMA) had addressed this extensively at the Public Accounts Committee. We would ask any other person to advise us of incidents where they think this may be happening. For our part NAMA is determined to avoid such developments in so far as it can within the law as passed by the Oireachtas.

This infantile (non) response contains one crystal clear message from NAMA – We cannot deny any of the allegations made against us.

Pat Kenny ended the interview by saying:

We can talk about this but we cannot point the finger until we have chapter and verse.

This, of course, is ridiculous, the finger has been very clearly pointed. The allegations are extremely serious, they have been made by a public representative on live radio.

In a real democracy state authorities, including the police, would by now be conducting an investigation with the aim of bringing charges.

In Ireland – Nothing.

This scandal has all the hallmarks of previous scandals such as DIRT and Ansbacher where state authorities were fully aware of what was going on but chose to ignore events.

It proves that despite everything that has happened in the past two years nothing has changed.

For the record I have transcribed the full interview (with some minor editing) with my own comments and emphasis.

Today with Pat Kenny – Thursday 27TH January 2011

Pat Kenny: (Introduction)

It has been claimed that people who owe hundreds of millions of Euros to the banks are buying back their debt at rock bottom prices through third parties and off shore companies. Fianna Fail Senator Mark Daly claims some property is being sold back for virtually nothing to the original owners and that NAMA is not following legislation enacted by the Oireachtas.

Kenny: Exactly what are you alleging?

Senator Daly: It’s not so much an allegation as a fact. Under the NAMA legislation, section 25 of the Act, NAMA had to prepare a code of conduct for the disposal of bank assets within three months of the passing of the Act. The Act says that the sale of properties and assets including bank loans would be governed under the Code of Conduct for the governance of state bodies which was passed in 2009.

In that section 18 said any asset being sold to all the bank loans would have to be sold by auction or competitive tendering process.

Kenny: So we would all know about it?

Senator Daly: So we would all know about it. But the competitive tendering or public auction would obviously involve huge amount of advertising that we would see in all the property supplements but this doesn’t appear to be happening either. What appears to be happening is people who are in the know, the same people who are in the know who got us into all this trouble are aware through the banks, through the receivers what these assets can now be bought at, the haircuts.

In one particular case I’ve come across in the UK the original loan was twelve million, the haircut was six million but the asset itself was undervalued, was worth nine million really and the guy, the original borrower of the loan said to his friends; you pay the banks six million, they’ll be happy and we’ll sell it for nine and they made a nice three million Euro profit.(This is a serious allegation).

And that type of thing is happening wholesale because there’s no transparency.

Kenny: But why would NAMA want to do that, if the thing is worth nine million why wouldn’t they sell it for something approaching that?

Senator Daly: Because no one is trying to maximize the value because once the bank gets the haircut that NAMA imposed on them…(Interrupted).

Kenny: Of course, if NAMA impose a haircut and say this asset is only worth six million and it’s actually worth nine, if they have done that then they’re exposing themselves as having undervalued the property which means that they’re not being very professional about what they’re doing. (Extreme understatement).

Senator Daly: There’s a lot of shady behaviour going on here (VERY SERIOUS ALLEGATION) and if they follow their own rules as set out in the NAMA legislation and had a competitive tendering process or public auctions then they would maximize the value but what is actually happening is, and the banks and receivers have admitted this to me, that the banks have said look once we get what we paid for, the haircut from NAMA, we’re happy.

Kenny: This is utterly; utterly dishonest if that’s what NAMA are at. If NAMA, and I’m only saying if, if NAMA is applying a haircut that is greater than the haircut that the market would suggest it should have then NAMA is not doing its job properly.

Senator Daly: All the receivers, auctioneers and banks want to do is pay back NAMA the money that’s owed. Maximising the value is not really their concern.

Kenny: As a taxpayer it is our concern.

Senator Daly: It is our concern which is why the transparency that I’m looking for. First for all that the rules would be followed, that the law would be followed (Serious allegation).

Kenny: That it would be by public tender or public auction.

Senator Daly: Exactly, and that all the banks and the receivers would go through this process but they’re not even doing that because as you can see you are not looking at papers full of advertising saying NAMA property for sale (Serious allegation).

Kenny: What interests me more, they should do that and that’s something they’ll have to rectify not that you have pointed it out, but what is more sinister is that if they applied a haircut that is too severe, rather than the medium term or long term economic value of the asset which they would be in a position to hang onto because that was the idea they could hold it in a way that the banks felt they couldn’t because of their balance sheets, NAMA could hold it longer.

But if they’re just dispatching stuff to get cash in to show off how well they’re doing for instance but they applied too severe a haircut which means the taxpayer has to put more money into the banks which we didn’t need to do and that is the obscenity if it’s true.

Senator Daly: Well, the obscenity of it is on top of that, the banks once they’re quite happy to get the money that they owe NAMA aren’t going to go after the borrowers, the original borrowers for the balance of the money, they’re just not going to do it and receivers, talking to the banks, have admitted that to me (Serious allegation).

The problem with this is that I’m not an investigator, I’m not the Guards but then again we know of plenty of cases where it’s taken two years to bring people to court for very obvious corporate governance issues.

Kenny: Let’s point this out carefully. NAMA, was expected to make a profit, that part of the whole thing that at the end of the day it might turn a small profit. It was not expected to turn a profit in the short term, it was supposed to hang onto to assets and realize the value. If it’s selling them at under the market value, disposing of them just to get cash in then it is not doing the job for which it was established.

Senator Daly: Let’s be clear on this. When the banks are appointing auctioneers and receivers to realize the money the fault lies with them in that they’re not advertising at a very minimum the property for sale and saying; this is what’s available, this is the current bid that’s on it. The transparency is required because first the citizens and the taxpayers are entitled to know that the assets which they currently own through NAMA are being maximized in value and that is not happening (Serious allegation).

Kenny: And NAMA, if it wants to, like in any commercial auction or tender, they can have a reserve, if it doesn’t meet the reserve, if they feel they’re being scammed in some way…interrupted.

Senator Daly: No, what is actually happening is the original borrowers, in these cases that have been brought to my attention, are arranging for their friends to put in the bids. Nobody else is aware that this place is for sale because no one else knows that the original borrower and the asset is in trouble and therefore this is a scam of monumental proportions (Very serious allegation).

Kenny: NAMA has responded to your claims.

It had addressed this extensively at the Public Accounts Committee. We would ask any other person to advise us of incidents where they think this may be happening. For our part NAMA is determined to avoid such developments in so far as it can within the law as passed by the Oireachtas.

Senator Daly: Now that’s not exactly encouraging, is it? Please come to us with a file that we can send to the DPP. What we’re talking about here is the transparency required and they’re not even following section 35 of the NAMA Act to this must be open and transparent. The concerning part about all this is in the next six months the cherry picks, the best property are going to be bought up by the scavengers and the vultures (Serious allegation).

Kenny: You have not gone public on the particular deals that you are aware of, have you gone to the Gardai with them?

Senator Daly: The problem here is you need smoking guns; you need evidence, emails, cheques, money going over, phone calls. This is all quiet little chats in the corner over a pint. The guy who came to me on this had been approached at a dinner party to be the third party to buy a property in the UK and he would then be given a cut. He came to me because he was so disgusted that the same people who had gotten us into this trouble in the first place are now doing the same thing again (With the assistance of NAMA/the state?).

Kenny: Look, if this scandal is real, the people who are culpable, if these things are being sold to private equity funds or whatever, the valuers are the corrupt people because they’re saying this thing is worth six million to NAMA and then it’s being sold on for nine?

Senator Daly: The legislation says you must have an auction or tendering process and therefore it is now illegal to be selling any asset, the disposal of all these assets, the two billion that has been disposed so far, hasn’t been done properly (Very serious allegation).

This practice is so widespread that embassy staff know about it and it’s on the dinner party circuit around Dublin and elsewhere it is quite well known that there are fellows that are cutting deals.

Kenny: We can talk about this but we cannot point the finger until we have chapter and verse.

Senator Daly: The law should be followed; it should be done by tendering or public auction. The NAMA website should have all the assets, the loans that are up for sale, what they were originally bought for, what the current bid is and no asset should be sold within four weeks of it going on the website that way no one can say there was a scam, there was a deal done.

At the moment we’re not following the law.

Senator Daly: In the next six months the guys who caused all the trouble are going to make billions off the taxpayer because they’re buying property at less than the asset value because they’re arranging for their buddies to put in false bids and they’re buying it for less than the market value (Serious allegation).

Copy to:

Today with Pat Kenny
Senator Daly
NAMA
NTMA
ODCE
Dept of Finance

Lenihan – Incompetent

Irish Times.

Madam,

In response to Minister for Finance Brian Lenihan (July 31st), I would say either he doesn’t understand matters or else he’s being deliberately misleading.

This is the kind of confused thinking and manipulative talking that’s been promoted since he and the Government chose to introduce the far too extensive, far too long-lasting two-year (now further extended) blanket bank guarantee scheme and the hugely costly Nama Project.

Mr Lenihan asserts that “Merrill Lynch also recommended a blanket guarantee of Anglo Irish Bank, including, incidentally, subordinated debt”.

This statement is simply untrue.

This can be checked by re-reading carefully all the notes, draft preliminary analysis, memos and records presented to the Oireachtas Public Accounts Committee in relation to Merrill Lynch’s advice.

In regard to the report to Minister Lenihan by the Governor of the Central Bank on The Irish Banking Crisis – Regulatory and Financial Stability Policy 2003-2008, the conclusions are clearly set out on pages 134–136.

In the matter of the guarantee, nowhere in the conclusions, does the quotation “it is hard to argue . . . in the absence of decisive action”, cited by Mr Lenihan, appear.

It does appear that Mr Lenihan has made an inductive reasoning mistake which can easily happen, such as confirming that the sun rose today because a cock crowed at dawn!

Mr Lenihan concludes

“I agree with Mr O’Toole that governments should be sceptical. But they most assuredly should not be reckless.”

Of course governments shouldn’t be reckless. But his Government had been notably recklessly complacent for years leading up to the crisis.

If they hadn’t been so recklessly complacent for so long, the emergence of the full-blown credit bubble banking crisis and the ensuing panic would have been avoided.

It was such reckless complacency, the dereliction from duty by the Government and the supervisory and regulatory bodies to maintain regulatory and financial stability policy, that led to the September 29th panic and the sub-optimal decision to introduce the blanket guarantee for all the banks.

That panic decision, while understandable (to use Prof Honohan’s word) was not excusable.

That’s the point, but Mr Lenihan has missed it entirely.

Yours, etc

PETER MATHEWS,
The Rise,
Mount Merrion,
Co Dublin.