While Cerberus maintains it did nothing wrong in the course of its bid for Nama’s Northern Ireland loans, the latest accounts for the vehicle it used to buy the assets will strike a sour note for many people.
Promontoria Eagle, the entity that bought the loans, paid just €1,870 in tax last year on €77 million profits, only slightly more than what a software engineer on €60,000 a year would pay in a single month.
Or, to put it another way, an industrial worker would pay more tax in two months.
The company was able to avoid paying anything meaningful to the Irish State – which sold it the assets in the first place – by availing of Section 110 of the Consolidated Taxes Act, 1997. This means that Promontoria Eagle is complying fully with Irish tax law.
In one way, it is not doing anything that other multinationals that set up shop in the Republic, such as Apple or Google, are doing. But, in another, it is very different.
First, those companies did not buy assets from the State in a deal that subsequently sparked a series of investigations. Second, they employ large numbers of people – Google has 2,800 full-time staff in Dublin.
Cerberus employs few people here directly. It has contracted out the work on most of the the portfolios that it has bought to agents, while an obscure company called Structured Finance Management Europe handles its administration.
The US group says that it has benefitted this country, North and South, by investing here and helping to kickstart economic activity. Its chief operating officer, Mark Neporent, a director of Promontoria Eagle, pointed this out at a recent hearing of the Dáil’s Committee of Public Accounts, which is investigating Project Eagle.
He was right, but if Cerberus had not invested here, some other, similar organisation would have done so in its place. The only reason it bought portfolios such as Project Eagle was because it believed that they would give it a good return.
It is clearly getting that from its venture in Northern Ireland. While the law does not oblige it pay any meaningful tax on that return, the citizens who sold it the assets from which it is now profiting have a right to feel aggrieved. All the more so because the Comptroller and Auditor General has produced a report saying that the sale of those same assets could have cost the State’s taxpayers about €200 million.
