The report of the Public Accounts Committee (PAC) into the sale process for Project Eagle contains serious criticisms of the National Assets Management Agency (Nama). They are conclusions which need to be taken seriously – by Nama itself and by the Government.The agency says its stands by the process and its corporate governance and that it does not believe it could have got a better price. However, significant questions are raised by the PAC's conclusions.
Some perspective is necessary. Nama took on a book of assets from the Irish banks in the midst of an economic crash. At the time there were fears that, even allowing for the discount at which it would take on these loans, further losses would be incurred. In the event, the agency looks likely to wind up with a surplus over the initial valuation.
However, this does not make Nama immune to criticism.The PAC has raised a series of queries about the way it went about the Project Eagle sale in Northern Ireland. It is, of course, at least partly speculation to argue that a higher price could have been received for the loans. And some of the PAC’s criticisms relate to the perception given by meeting bidders close to the end of the process.
Other points are more substantive and go to the heart of the way the process was run and key decisions were made. There is no suggestion that Nama was involved in the issues now being investigated by the UK criminal authorities.
But the report criticises its reaction when it learned of the huge “ success fees” in play as well as its general conduct of the sale process. One troubling PAC conclusion is that in the initial stages, the design of the process was overly influenced by Pimco, a US investment fund which was later to drop out of the race. It is just one of a series of steps where the PAC believes flaws were evident.
A commission of investigation into the process may now be politically inevitable. However this faces significant difficulties, given the criminal investigations underway and the fact that some key players live outsider the State. Nonetheless, the Government and Nama must not try to shrug off this report. Questions need to be answered.