The biggest property transaction in the history of Northern Ireland and the former US Vice President

13 Jul 15

Ireland would not have a Peace Process but for America. The island of Ireland owes a debt of gratitude to Senators Edward Kennedy, Christopher Dodd, Daniel Patrick Moynihan, Alfonse D’Amato, George Mitchell and President Bill Clinton.

Enter Dan Quayle.

The former US Vice-President is embroiled in a controversy which has uncharacteristically united both sides of the Irish border in outrage. Quayle’s US investment firm, Cerberus Global Investments, won the NAMA tender to buy the €1.6 billion Northern Ireland property portfolio last year. Prior to Cerberus’ successful bid, Quayle met the Northern Ireland First Minister. The timing of this meeting those who attended are curious.

The questions surrounding the biggest property transaction – €1.6 billion – in the history of Northern Ireland has rocked the Dublin and Belfast parliaments. Politicians across the border and the political divide have called for an inquiry after evidence has emerged which alleges that those close to the property deal failed to exercise probity in their dealings. The circumstances surrounding an alleged fee of €9.8 million is now the subject of a criminal investigation by the UK National Crime Agency. 

I also made a complaint to the FBI. The same provision the FBI relied on with regard to the recent FIFA allegations may apply in this instance. Specifically, the Travel Act, 18 U.S.C. § 1952 which form part of the guidelines of the Foreign Corrupt Practices Act (FCPA) 1977.

Why did I do that?

It’s my job. I am a governance consultant for the European Commission. My PhD on the history of Irish corruption was published as a best selling book by Manchester University Press in 2012. I worked as a governance consultant for the United Nations and the World Bank. I held academic appointments at the University of New South Wales and Trinity College Dublin. I’m lucky enough to write for a super newspaper

By the way Dan Quayle, we spell it potato in Ireland.

Dr Elaine Byrne

 

Timeline of the biggest property transaction in the history of Northern Ireland and the role of the former US Vice President

December 2009
The National Asset Management Agency (NAMA) was established in December 2009 as one of a number of initiatives taken by the Government of the Republic of Ireland to address the serious problems which arose in Ireland’s banking sector as the result of excessive property lending. NAMA was to function as a so-called “bad bank”, acquiring property development loans from Irish banks in return for Irish government bonds, with a view to improving the availability of credit.

Five institutions (and their subsidiaries) were designated as participating institutions in February 2010: Allied Irish Banks; Bank of Ireland; Anglo Irish Bank; Irish Nationwide Building Society; and EBS Building Society. NAMA’s Northern Ireland customer base was considerable, with approximately 50 per cent of the collateral value underlying the loans lying in Northern Ireland, 40 per cent in Great Britain and 10 per cent in the Republic of Ireland.

 

24 June 2013
The Northern Ireland Minister for Finance, Sammy Wilson MP MLA, sent a letter to the Irish Minister for Finance Michael Noonan, stating that law firm Brown Rudnick were interested in acquiring the Northern Ireland loan portfolio. Noonan responded that any potential bidder should contact NAMA directly.

 

September 2013
Brown Rudnick made an unsolicited approach to NAMA and indicated that its client, PIMCO, was interested in acquiring NAMA’s Northern Ireland loan portfolio. Frank Daly, NAMA Chair, told the Irish Parliament, “PIMCO indicated a preference for a closed transaction, which did not involve open marketing of the portfolio.”

 

January 2014
NAMA launched an open-market auction of €5.7 billion Project Eagle, its entire Northern Ireland based loan book. This 850-property portfolio is the biggest property transaction in the history of Northern Ireland.

 

January 2014

Peter Robinson sent a debtors’ charter” to NAMA. Frank Daly, NAMA Chair, described the document as that which “appeared to summarise an agreement between PIMCO and the NI Executive”.

 

10 March 2014
PIMCO informed NAMA that its compliance staff had discovered that PIMCO’s proposed fee arrangement with Brown Rudnick included the payment of fees to Tughans, a Belfast law firm, and to a former external member of NAMA’s Northern Ireland advisory committee, Frank Cushnahan. A fee of £15 million which was to be split three ways among Brown Rudnick, the managing partner of Tughans Ian Coulter and Cushnahan.

  • Coulter was then the managing partner of Tughans. He resigned in January 2015.

 

13 March 2014
PIMCO withdrew from the Project Eagle process following pressure by NAMA.

 

???
US investment firm Cerberus hired US based Brown Rudnick and Belfast based Tughans as strategic advisers. Both law firms had worked for PIMCO.

 

25 March 2014

Peter Robinson MLA (DUP), Northern Ireland First Minister, met with Dan Quayle, Simon Hamilton and Ian Coulter.

  • Quayle is the former US vice president and now chair of Cerberus Global Investments, the international division of US-based Cerberus Capital Management.
  • Hamilton (DUP) was then the Finance Minister but was appointed as Health Minister in a reshuffle on 11th May 2015.

 

June 2014
NAMA completes the sale of its Project Eagle €5.7 billion loan book for €1.6 billion to Cerberus Capital Management, at a 72 per cent write down. The “sale represents the largest single transaction by NAMA to date.”

 

16 March 2015
The UK House of Commons Northern Ireland Affairs Committee published a report which was critical of Cerberus and NAMA. The report recommended: “… we have heard disquieting stories from some businesses in NI that they were being treated by Cerberus in a less than sympathetic manner. We find it strange that no Memorandum of Understanding was agreed between the NI Executive and Cerberus, and therefore recommend that the NI Executive keeps a close eye on this situation.”

The report also stated: “The Northern Ireland Executive should keep a close eye on the relationship between Cerberus, the partial successor to NAMA, and businesses in Northern Ireland.”

 

2 July 2015
Irish MP Mick Wallace (Independent) claimed under parliamentary privilege that €9.8 million was discovered in an offshore Isle of Man account following an independent audit of Tughans. Wallace said that some of this money was “reportedly earmarked for a Northern Ireland politician or political party” associated with the €1.6 billion Project Eagle auction. The Isle of Man account where the €9.8 million fee was lodged was controlled by Ian Coulter, who has since left the firm. Tughans said the money has been recovered.

 

9 July 2015
The UK’s National Crime Agency (NCA) confirmed that it is to lead the criminal investigation into the sale of Northern Ireland assets owned by NAMA. The NCA did so following a request from Police Service Northern Ireland.

 

10 July 2015
The Public Accounts Committee of the Irish Parliament heard evidence from Frank Daly, NAMA Chair. He testified that NAMA forced PIMCO to abandon its bid for Project Eagle. He also revealed that if PIMCO’s bid was successful, a fee of £15 million was to be split three ways among Brown Rudnick, Ian Coulter and Frank Cushnahan.

 

15 July 2015
Mick Wallace MP (Independent) will disclose further information in the Irish parliament.

 

15 July 2015
Northern Ireland Affairs Committee will meet. Theresa Villiers MP, Secretary of State for Northern Ireland will attend.

Complaint to the FBI regarding sale of NAMA’s Project Eagle by US fund Cerberus

09 Jul 15

Dear FBI,

 

  • The Irish National Asset Management Agency (NAMA) sold a €5.7 billion loan book in Northern Ireland for €1.6 billion to US investment fund Cerberus in 2014. This auction sale was known as Project Eagle.
  • Mick Wallace MP claimed in the Irish parliament on 2 July 2015 that €9.8 million was discovered in an offshore Isle of Man account following an independent audit of Belfast law firm Tughans.
  • Tughans were retained by New York based legal firm Brown Rudnick to assist Cerberus in its bid for Project Eagle.
  • Mr Wallace claims that some of this money was “reportedly earmarked for a Northern Ireland politician or political party” associated with the €1.6 billion Project Eagle auction.
  • The UK’s National Crime Agency (NCA) is leading the criminal investigation into the sale of Project Eagle.

 

FBI

 

Will the FBI initiate a similar investigation? The guidelines of the Foreign Corrupt Practices Act (FCPA) 1977 state:

“The Travel Act, 18 U.S.C. § 1952, prohibits travel in interstate or foreign commerce or using the mail or any facility in interstate or foreign commerce, with the intent to distribute the proceeds of any unlawful activity or to promote, manage, establish, or carry on any unlawful activity. “Unlawful activity” includes violations of not only the FCPA, but also state commercial bribery laws. Thus, bribery between private commercial enterprises may, in some circumstances, be covered by the Travel Act. Said differently, if a company pays kickbacks to an employee of a private company who is not a foreign official, such private-to-private bribery could possibly be charged under the Travel Act.”

Ten Steps to a New Political Party

11 Jun 15

Published in the Sunday Business Post 2 November 2014
The weather. Tax. Beef prices. Traffic. House values. Who did and did not make the All Star awards. Ireland has an obsessive fascination with certain topics. The establishment of a new political party is another.

Chapter eight of Des O’Malley’s memoir, Conduct Unbecoming, provides a ten-step roadmap of how to actually achieve something that Eamon Dunphy, David McWilliams, Fintan O’Toole, Lucinda Creighton and Shane Ross have succeeded in only ever talking about.

Step one. Stand for Something. The back collection of country music star Charley Pride is essential listening for any would be political starlet. “You’ve gotta stand for something or you’ll fall for everything” he sings, in that irritating Mississippi twang. There has to be a unifying identity that is bigger than any individual ego or, god forbid, collection of egos.

read more »

Milk Quotas and Climate Change Fines

31 Mar 15

Published in the Sunday Business Post

Simon Coveney expressed unusual intentions before the long-awaited government reshuffle last year. “I don’t want to change Department.”

Hence the narrative that Leo Varadkar was “promoted” to Health. This implied that Coveney was demoted because he voluntarily limited his political ambitions to staying at the Department of Agriculture. In other words, Coveney had scored an own goal in the internal Fine Gael leadership battle stakes. That’s a narrative employed by those who do not understand that agriculture is the biggest good news story within the Irish economy right now.

We met last St Patrick’s weekend in Sydney. Coveney was meeting his Australian and New Zealand Ministerial counterparts and was bullish at staying in Agriculture. The Corkonian expressed an ambitious desire to make his Department as big an economic Department as that of Jobs and Enterprise. A man on a mission to find new markets for Ireland’s industrious dairy farmers as the abolition of milk quotas approached.

Irish dairy farmers were always a productive lot. My job as a civil servant in the Milk Quota section at the Department of Agriculture fifteen years ago was to field calls from farmers wondering what the super levy was. Thankfully that job is now redundant. Farmers can produce as much as they like under the new rules without throwing milk away instead of incurring heavy EU fines.

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Terms of Reference to the Commission of Investigation to Inquire into Mother and Baby Homes

25 Aug 14

SUBMISSION: Commission of Investigation to Inquire into Mother and Baby Homes
with particular reference to Irish Participation in the British Child Migration Scheme

Child Abuse Inquiry Terms of Reference

Terms of Reference

1. The terms of reference for the Commission of Investigation may focus on allegations of forced or illegal adoptions to the United Kingdom and United States and the role or involvement by Irish institutions and organisations therein.

2. It is proposed to extend this scope of inquiry to include: (1) The incidence, if any, of forced or illegal adoptions to Australia and (2) the role or involvement by Irish institutions and organisations with regard to any formal or informal child migration scheme which involved the transport of children to Australia. This role or involvement by Irish institutions and organisations may encompass a direct or indirect role or involvement insofar as instances where the transport of Irish children to Australia was conducted by such institutions and organisations via institutions and organisations based in the UK.

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Major reform is essential to tackling white-collar crime – 14 recommendations

30 Jun 13

My draft working paper assessing Ireland’s white-collar crime oversight agencies and 14 recommendations for reform can be accessed here – Fit for Purpose

 

Our system of fighting financial corruption needs to be completely overhauled

Sunday Independent 30 June 2013

I spent three years of my life writing a book about the history of scandal in Ireland since the foundation of the State. The only theme that runs through it is this sense of impunity and the absence of consequence. We are remarkably good as a country at establishing inquiries, publishing reports and ultimately complaining that nothing has changed.

The debate on the Anglo tapes is dominated by the clamour for a banking inquiry. Absent in all this is how to stop such a scandal from ever happening again.

The deaths of Sunday Independent journalist Veronica Guerin, 17 years ago last week, and Detective Garda Jerry McCabe, convulsed cross-party political will to establish the Criminal Assets Bureau (CAB) – one of the most innovative criminal investigatory organisations in the world.

We need to take this type of action again.

Ireland has failed to tackle white-collar crime. The outgoing financial regulator, Matthew Elderfield, bluntly told the Public Accounts Committee this month that our system for confronting financial crimes was not fit for purpose.

The number of white-collar prosecutions has fallen dramatically despite an increase in the number of offences. Just 178 convictions were recorded in 2010 compared with 579 in 2003. The chair of the Revenue Commissioners, Josephine Feehily, noted that although 289 cases of illegality were identified in relation to the largest tax evasion scheme in Irish history, not one person has been prosecuted over the Ansbacher tax scandal.

Why?

Although the workloads of the agencies tasked with the prevention, detection, investigation and prosecution of fraud have increased as a consequence of the fallout from Ireland’s economic collapse, their resources have been cut.

CAB’s budget was chopped by almost 15 per cent from 2008 to 2012. There are only three forensic accountants within a team of 70 officers. Every white-collar crime investigation is heavily dependent on the specialist skills of forensic auditors.

Likewise, the capacity of the Garda Bureau of Fraud Investigation to investigate white-collar crime is limited somewhat given the absence of solicitors or barristers on its staff – and it has just two full-time forensic accountants on its books. Its budget was slashed by 21 per cent between 2008 and 2011.

The ODCE, responsible for the Anglo investigation, has had 11.6 per cent in cuts from 2010 to 2013. Mr Justice Peter Kelly remarked last year that notwithstanding the complexity of the Anglo case, the investigation was nevertheless taking “a very, very long time”. He expressed his surprise that just 11 gardai were seconded to the ODCE to work with eight ODCE officials on the “largest and most serious” investigation in the State’s history.

The Garda Siochana’s budget was cut by €39m in 2013. The Director of Public Prosecutions’ finances fell by 18 per cent between 2009 and 2011. And so on.

Privately, senior officers from different agencies have confided that diminished resources are “strangling” their ability to do their job effectively. The Croke Park Agreement means that in reality a “six-year gap between recruitment drives” now exists.

Breaking the Croke Park embargo to recruit vitally needed specialists is not the only answer. Four key reforms are also necessary: an independent audit; the creation of a new taskforce; the introduction of deferred prosecution agreements; and paying whistleblowers.

An independent audit of the capacity of oversight agencies, as a matter of urgency, must be conducted. This would consist of an overall appraisal of the operational ability of CAB, ODCE, Garda Bureau of Fraud Investigation, Central Bank, Revenue, National Bureau of Criminal Investigation, Competition Authority and so forth. This is what the UK’s Serious Fraud Office has done since the financial crisis.

Such a review has been achieved with the Department of Finance. The 2010 Wright expert report noted that the department was “not fit for purpose” and “often operates in silos, with limited information sharing”. The Wright report’s criticisms echo that made by the ODCE in its submission to the Department of Justice way back in 2010.

The ODCE noted that a disparate set of agencies have responsibility under one legislative code only – be it company, competition, revenue or financial law, etc. But white-collar criminals do not conduct illicit activity within the confines of one piece of legislation! So multiple agencies may need to be involved, but information sharing is not always possible because of confidentiality requirements. That’s madness.

In response to why an Anglo tapes investigation is difficult to conduct, the Minister for Finance said, “There are tea chests – hundreds of tea chests – full of documents, and then there are tapes as well.” Michael Noonan went on to say, “So it’s very difficult to put the book of evidence together.”

That is unacceptable. The fact something is difficult does not mean it should not done.

Political will right now is distracted by the heat generated with statements of “the axis of collusion” and “political thug and boot-boy” nonsense. Compare that to the swift response back in 1996 when a national crisis prompted the establishment of CAB after only a few weeks.

Ireland does not have a police-led multi-agency taskforce with a singular focus on white-collar crime. This is left to CAB which centres on the proceeds of crime. Such a body, with a ring-fenced budget, would be populated by officials from the Central Bank, Revenue, Fraud Squad, ODCE, the Department of Justice and other appropriate agencies.

The ODCE and Transparency International have both proposed the introduction of Deferred Prosecution Agreements. In the US, DPAs are common. Companies are encouraged to report wrong-doing in order to avoid prosecution.

The US introduced the “Office of the Whistleblower” in 2010. The UK is considering something similar. Whistleblowers are paid between 10 and 30 per cent of the money collected in cases where high-quality original whistleblower information leads to an enforcement action of over $1m in sanctions. Controversial, but it works.

Let’s fix the problem, not keep talking about it.

 

A reborn Libya must endow the Berbers with a new status

21 Sep 11

Elaine Byrne, Sunday Times, 4 September 2011

My photos of Morocco

‘Power is like being with a woman for the first time. You always want more.” Over our third pot of Berber herbal tea, the male elders of a small village in central Morocco are doing their best to explain the nature of political power to me.

The liberation of Libya has reawakened a political consciousness of events beyond its borders in a people that had grown accustomed to assuming nothing would ever change. “Gadaffi is gone because the people did not want a person who thought he was the country, they decided they wanted just a country instead,” was the verdict of Mohammed, a Berber farmer who said he was 50. Harsh mountain life has aged him by another 20 years.

Personality politics and terms of office being notched on bed posts are characteristics of Middle Eastern as well as northside Dublin politics. The unintended consequences of Gadaffi’s collapse have yet to be fully appreciated, but they may be consequences which Ireland can legitimately support, given our shared historical experiences with North Africa’s Berber people.

read more »

A thirst for change stops at the border of Morocco

21 Sep 11

Elaine Byrne, Sunday Times, 28 August 2011

My photos of Morocco

My interview on RTE’s John Murray Show about Ramadan, the thirty days of fasting from water & food from sunrise to sunset – from Marrakesh. Also with two Irish women who are converts to Islam, Carol-Ann Duggan & Charlotte Morshed. (about 30-40mins in)

‘You weren’t at mass this morning, of all mornings,” my sister said to me on the phone. “He praised you from the altar for representing the local community in the national media.” “He” is one of my closest friends, a Monsignor nearing retirement who is hoping that Rome will overlook him when it comes to appoint Irish bishops.

“You haven’t told him yet,” my sister guessed. A little defensively, I replied that I was going up to have breakfast with him. “Father,” I told him, “I’ve decided to do Ramadan, one of the five pillars of Islam, to experience what it’s like to be a Muslim.”

We had been over this ground before – Passover in Jerusalem, the evangelicals in Ghana, the Dublin Protestant phase, and then those factory rituals of Havana graveyards. “I’ll be travelling for a month, mostly to the Moroccan villages near the Sahara,” I told him. He laughed. “Are you sure you know what you’re letting yourself in for?” he cautioned. As it turned out, I hadn’t a clue.

read more »

Internships

29 Jul 11

I’ve been getting a lot of emails and phonecalls from undergraduates and Masters students from universities around Ireland about the “next step” – the graduate job search. Instead of repeating myself, here’s some internship and graduate programme suggestions and maybe this blog post can crowdsource some other suggestions and I’d add them to the list.

I went through the UN internship programme. Apart from the experience of living abroad, working with people from diverse backgrounds and perspectives, it provided the opportunity to translate academic training into the policy world and ultimately led to consultancies with the UN and the World Bank. Although many internships are not paid, the long-term benefits outweigh the short-term financial pain.

How to get an internship 😉

Irish Aid – interviews each Autumn
OECD – keep checking website
World Bank – Junior Professional Associate programme, also see summer internship programmes
UNDP – internship, junior professional programme
European Union stagier – (paid!)
Asian development bank – Ireland is a member of most of the international banks, therefore Irish people can apply as interns but most Irish people are not aware and they particularly promote women
UK political and policy jobs and internships
EU political and policy jobs and internships

Academic opportunities
OSCE – also contact the individual field offices
Canadian fast-track civil service programme for non-nationals (need to root around to find)
European Youth Forum
College of Bruge

Best of luck!

The Tank Field – update

29 Jul 11

If the Tank Field in Cork was in Dublin, the issues it raises would probably receive the national attention it deserves. The issues around the Tank Field are not unique to Cork but have relevance to the administration of local government nationally and the decision making process within the Department of Education. It is a case-study in governance and public policy.

The Tank Field has divided the local community, split the council and focused attention on::

  •  
    • the dominant role of the county manager in local government
    • the power of a city council to take over a community resource
    • how competing priorities within the Irish planning process are decided upon
    • the deficiencies in the planning process
    • the deficiencies in the Department of Education decision making process
    • the role of the GAA in the planning process
    • issues regarding the expenditure of public funds
    • issues regarding the preferential treatment afforded to Gaelscoileanna

 

    More information:

  • The Tank Field remains a live issue. Local councillors voted last month against a request to rezone the land for a new Gaelscoil. Irish Examiner report – Tank Field Examiner
  • Eoin English of the Irish Examiner put both sides of the argument for and against the Tank Field here. Eoin English Tank Field
  • The Gaelscoil invited public representatives to an open day today to hear its side of the story last week.
  • Dr Aodh Quinlivan from University College Cork recently published a book chronicling local government in Cork. One of the chapters of Inside City Hall examines the issues around the Tank Field.
  • My 2009 Irish Times piece on the tank field:
  • The response to my piece by the Gaelscoil:
  • FOI documents and further information on the tank field
  • Those pro the tank field have set up a website – http://www.tankfield.ie/