NAMA/government secrecy?

KyussBishop

Sorry if there's already a topic on it, I'm kind of a noob when it comes to this whole topic, but some recent things I've read have been spurring my interest in the subject.

Is it true that the legislation for NAMA has required that all talks and documentation relating to it be kept absolutely secret?

In addition, does this mean that no politicians or lobbyists (or bankers and other people involved etc. etc.) can be held accountable for their decisions/actions, because it is all secret? (i.e. that possibly criminal conflicts of interest, and corruption, may be concealed by the secrecy?)

What is the story there? If this is true, what reasons are there for all of that being kept secret, and more importantly, why has nobody leaked any information about what is going on, and the broader discussions?

Right now, from what I can see, leaking documentation like that, which is massively in the publics interest, is probably vitally important for exposing this process, and any possible corruption or serious negligence, so that there is some kind of accountability here.


If all this is true, what steps could be made to realistically encourage people involved to leak documentation, and to inform them how important that may be? (with sites like Wikileaks, it's piss easy to do these days; it would be stupid to submit leaks to any of our newspapers)

What are the laws like in Ireland with regards to whistleblowing, and solicitation of that?

AlekSmart

Is it true that the legislation for NAMA has required that all talks and documentation relating to it be kept absolutely secret?

Oh it`s true right enough KyussBishop,and it`s that very factor which I most object to in all of this NAMA shytt.

We (De Peeple)are absolutely entitled to know EVERYTHING which transpired at that,now infamous,meeting with Mr Lenihan back in 2008.

The man himself,insists that nothing can be revealed as it`s all "commercially sensitive information" and thus must remain in a "Third Secret of Fatima" state until his 1000 year Republic finally collapses.

I flatly object to the increasing problem with Open Governance which this Government,both Fianna Fail AND The Green Party,appear to have developed and adopted as official policy.

Thus far for example we only have one Mr R.Abramovich unmasked as a major player in our futures and that only via the UK Media....Name and Fcukking Shame I say....if we`re going to be hung at least let us know who`se hands will be on the lever....;)

fmcattack

this is slightly off topic but i cant seem to find one on it.

At the moment McKillian developers want to stop there loans going to NAMA.

Can someone explain to me why they wouldn't want tehm to go to NAMA, whats the difference between having to pay NAMA back and having to pay the bank back?

here is the link to the article

http://www.irishtimes.com/newspaper/breaking/2010/1005/breaking13.html

McKillen bids to halt transfers
Related

* Developer wins case on Nama challenge | 25/09/2010
* Commission letter sought for evidence at Nama challenge | 24/09/2010
* Developer recruits Nobel winner to keep out of Nama | 10/09/2010
* Going public to take a stand against Nama ownership | 05/10/2010

SIMON CARSWELL, Finance Correspondent

Businessman Paddy McKillen has told the High Court that he has been treated unfairly by having his loans transferred to the National Asset Management Agency.

Counsel for Mr McKillen, whose legal challenge against Nama and the State began this morning, said the procedures adopted by the agency was a denial of the businessman's constitutionally protected rights to fair procedures.

Mr McKillen is trying to stop the transfer of about €2 billion in bank loans to Nama, claiming that it will be "the cause of significant adverse effect on him and his companies, and particularly on their financial well-being".

Michael Cush SC, for Mr McKillen and 15 of his companies, told a three-judge division of the court that it would not be in his client’s nature to bring this action at this time but for his absolute conviction that he has been treated unfairly.

Nama was set up by the Government last year to remove the most toxic loans from the banks. It is acquiring bad land and development loans and associated investment property and other loans totalling €73 billion from five banks.

The court was told that Mr McKillen is a property investor rather than a developer. His properties are valued at between €1.7 billion and €2.8 billion and there are loans totalling about €2.1 billion secured against those properties with banks participating in Nama.

Mr Cush said that all of the loan repayments are being met and that in aggregate the income being generated on the properties amount to 1.7 times the required interest to be paid.

There are 62 properties and they are shopping centres, hotels and offices, generating €150 million in income a year. They are 96 per cent let to "blue-chip tenants" on 25-year leases, said Mr Cush, which was a "truly remarkable figure in the current climate".

The interest cover might have fallen below the permitted ratios on some loans as agreed with the banks but in aggregate terms it was well above the typical level of 1.2 times interest cover.

Mr Cush said that 26 per cent of Mr McKillen's property portfolio is in Ireland, with most of the remainder in the UK, France and the US. Just 2.5 per cent of his portfolio was land and development.

Representing the State in court is the Attorney General, Paul Gallagher SC, with two other senior counsel, before the President of the High Court, Mr Justice Nicholas Kearns, with Mr Justice Peter Kelly and Mr Justice Frank Clarke.

Counsel for Mr McKillen claimed that the definition of development loans in the Nama legislation was "exceptionally broad" and that the powers of the agency were "extensive".

The definition on eligible bank assets for transfer to Nama was "extraordinary broad" and had a "cascading effect" bringing in other loans held by a borrower.

The legislation also stacked the odds against the banks in seeking to object against the transfer of particular loans, Mr Cush told the court.

Borrowers moving to Nama are not entitled under the legislation to know if their loans are moving to the agency and the grounds for which they are moving. They also cannot make representations to stop them moving, said Mr Cush. Borrowers "can do absolutely nothing", he said.

"This must be the most complete statutory shut-out that has come before the court," he said, adding that Nama's procedures were a "total abrogation" of fair procedures.

Sand

@fmcattack

Can someone explain to me why they wouldn't want tehm to go to NAMA, whats the difference between having to pay NAMA back and having to pay the bank back?

Well, if you were meeting your repayments you might not want to be cast into the same pool of public hatred and spite as the NAMA bound developers. Certainly wouldnt be good for your public image to be presented as a guy whose loans are held by NAMA. Most people wouldnt look past the headline to see that hes actually one of the "good" loans.

It would also have a pretty heavy impact on the ability to raise other funds - some disinterested lenders abroad might simply see: NAMA, and think the guy was in default or behind on payments.

ei.sdraob

Secrecy in an organisation entrusted with so much power and money

will only lead to some serious abuse, waste and corruption

mark my word

Scofflaw

Sand wrote: »

@fmcattack


Well, if you were meeting your repayments you might not want to be cast into the same pool of public hatred and spite as the NAMA bound developers. Certainly wouldnt be good for your public image to be presented as a guy whose loans are held by NAMA. Most people wouldnt look past the headline to see that hes actually one of the "good" loans.

It would also have a pretty heavy impact on the ability to raise other funds - some disinterested lenders abroad might simply see: NAMA, and think the guy was in default or behind on payments.

And following that logic also tells you why the details of whose loans are in NAMA is commercially sensitive.

cordially,
Scofflaw

Sand

@Scofflaw
Should we be assisting insolvent developers errect a blanket of silence around their circumstances? Surely a responsible course of action would be to ensure lenders are aware of the developers circumstances, if developers in NAMA are attempting to raise loans outside of NAMA. Otherwise two situations arise:

- The Irish government is complicit in assisting a developer raise external funding whilst hiding his true ability to repay.

- With a lack of oversight and transparency, lenders assume *all* developers with NAMA administered loans are dodgy or in trouble. Or even worse, that *all* Irish developers are dodgy or in trouble. So the truly insolvent contaminate the well run businesses.

I dont blame McKillen for doing everything in his power to underline he has nothing to do with NAMA and exercising every option to ensure hes not bound to the failures held there. Nobody will be able to differentiate between McKillen and the true basket cases because NAMA is hidden beneath so many layers of obfuscation.

I dont see that as an argument for supporting the secrecy around NAMA. If you arent upfront and realistic about the situation, people always assume the worst. The typical Irish belief that honesty and realism is dangerous has hamstrung policy makers from the very beginning.

Happyman42

Could some of you financial types explain in layman's terms exactly what is going on between McKillen and Nama and why it is so important?

Scofflaw

Sand wrote: »

@Scofflaw
Should we be assisting insolvent developers errect a blanket of silence around their circumstances? Surely a responsible course of action would be to ensure lenders are aware of the developers circumstances, if developers in NAMA are attempting to raise loans outside of NAMA. Otherwise two situations arise:

- The Irish government is complicit in assisting a developer raise external funding whilst hiding his true ability to repay.

- With a lack of oversight and transparency, lenders assume *all* developers with NAMA administered loans are dodgy or in trouble. Or even worse, that *all* Irish developers are dodgy or in trouble. So the truly insolvent contaminate the well run businesses.

I dont blame McKillen for doing everything in his power to underline he has nothing to do with NAMA and exercising every option to ensure hes not bound to the failures held there. Nobody will be able to differentiate between McKillen and the true basket cases because NAMA is hidden beneath so many layers of obfuscation.

I dont see that as an argument for supporting the secrecy around NAMA. If you arent upfront and realistic about the situation, people always assume the worst. The typical Irish belief that honesty and realism is dangerous has hamstrung policy makers from the very beginning.

I accept that point, but the maintenance of secrecy over the details of who has loans in NAMA really does follow directly from the points you made above:

Well, if you were meeting your repayments you might not want to be cast into the same pool of public hatred and spite as the NAMA bound developers. Certainly wouldnt be good for your public image to be presented as a guy whose loans are held by NAMA. Most people wouldnt look past the headline to see that hes actually one of the "good" loans.

It would also have a pretty heavy impact on the ability to raise other funds - some disinterested lenders abroad might simply see: NAMA, and think the guy was in default or behind on payments.

Neither the general public nor the business community will probably bother to distinguish between those in NAMA who are paying their way and those who aren't, and it would be enormously damaging to someone's business reputation to be associated with NAMA, even if they are one of the "good" loans.

Credit, even the 30-day version offered by most businesses, relies on confidence in the ability of the other person to pay. If someone asked me to do a job of work, and I found out they were in NAMA, I would be reluctant to do business with them at all unless the amount was really trifling, and at best would insist on cash up front before starting any work. Any sign of payment delay would be something I would treat as requiring immediate action, legal if necessary.

It's extremely difficult to do business under those circumstances - releasing NAMA details would have the effect of crippling every business involved in NAMA, which would be highly counter-productive, possibly to the extent of turning the whole portfolio into completely worthless paper overnight.

It's annoying, but I can't see a way around that. We need the businesses involved in NAMA to be able to pay their way out, so it doesn't make sense for us to make that next to impossible.

cordially,
Scofflaw

Sand

@OP

The problem regarding NAMA and leaks from within even to Wikileaks, is that theres only 75 people in NAMA IIRC. If you assume about half of that number is the usual chaff that spends most of their day in meetings, talking about meetings and/or issuing memos to the rest of the team, that leaves a very small pool of people who would be interrogated for releasing the details. How many of them would have widespread access? How many of them would have been hired for their expertise, and how many for their political reliability and connections? NAMA is a big trough of cash - you can be sure places were booked ahead of time for the favoured few. Why would they suddenly turn into sterling patriots?

How broken up is the information? Is there a single Seekrit Book of Reckoning? Or is there a complete and total mess of mish mash? The amount of secrecy around NAMA might not be so much clever cunning hiding evil deeds, but rather a blanket to hide the sheer and total incompetence thats there.

As for protection of whistleblowers, there is none worth mentioning in Ireland. Given the Gardai were used to pursue a painter who played a bit of a prank on the Taoiseach with an unflattering series of portraits, its very likely anyone who dared to release information on NAMA to the public would be pursued to the ends of the earth by the establishment.

Sand

@Scofflaw

Neither the general public nor the business community will probably bother to distinguish between those in NAMA who are paying their way and those who aren't, and it would be enormously damaging to someone's business reputation to be associated with NAMA, even if they are one of the "good" loans.

They wont distinguish because NAMA wont offer them the ability to distinguish. By hiding the information, NAMA forces everyone to assume that every single loan in NAMA is troubled, and hence the business lent to is in trouble. Its the safe assumption to make.

If transparency was there, a bussinessman would be able to point people to his file in NAMA showing: "Heres my loan. Heres my 100% repayment record. Heres the securities under the loan" and provide certainty.

And yet, there is the knee jerk Irish reaction that truth is the enemy, that honesty is the problem, that realism and information are dangerous.

It's extremely difficult to do business under those circumstances - releasing NAMA details would have the effect of crippling every business involved in NAMA, which would be highly counter-productive, possibly to the extent of turning the whole portfolio into completely worthless paper overnight.

So instead we leave a deep pall of uncertainty over the entire Irish construction industry by leaving the nagging doubt over every single developer..."Are they in NAMA? We dont know. Safer to assume the worst and not lend to them" The exact same dynamics that caused the credit crunch when banks all around the world wonders "Are they exposed to sub prime mortgages? We dont know. Safer to assume the worst and not lend to them"

So the insolvent developers drag down the good businesses. Much as the insolvent banks are dragging down the state.

Not counter-productive at all. We have a totally incoherent and contradictory NAMA/banking/fiscal/economic plan where the response to every aspect undermines attempts to fix the other aspects. It would be laughable if it wasnt so serious.

I mean, your point in bold in the above...the (supposed) purpose of NAMA is fairly simple - to provide clarity, to remove the loss from the banks balance sheets, to ensure there is certainty and information so that people can form expectations. So there is no paralysis in credit, or investment or growth. Now since then there has been so much bloody spin and plain out lying that NAMA is not only going to halt climate change, but its going to fund a space mission to seek out new life and new civillisations. But the essential and useful goal was to provide clarity. To provide information.

Instead, its now actually trying to avoid clarity and to hide information. Its a contradiction in its own purpose. Instead, now its some sort of secretive venture capital fund trying to turn a profit on its massive portfolio. This short term, narrow profit maximising goal is now hampering the wider economy by maintaining the uncertainty that hampers investment and growth. Its attempting to maintain a floor under property prices, and mortgage payments, whilst meanwhile the government is going to have to force through pay cuts that are going to mean mortgages are defaulted.

Its as if Irish fiscal and economic policy is made up by 10 different teams and they've never spoken to each other. NAMA is going to make a massive loss. We know this. It was always a lie that it was going to turn a profit. Whilst we should look to minimise the loss, we shouldnt do so at the cost of the wider Irish economy.

Look, lets start from a stunning and dangerous idea - information is a good thing? We should share information as much as possible. Lets start from that as a concept and work from there when it comes to making policy. Because the "Trust us - we know what we're doing" is just material for satire right now, as Brian Lenihan is finding out.

Scofflaw

I mean, your point in bold in the above...the (supposed) purpose of NAMA is fairly simple - to provide clarity, to remove the loss from the banks balance sheets, to ensure there is certainty and information so that people can form expectations. So there is no paralysis in credit, or investment or growth. Now since then there has been so much bloody spin and plain out lying that NAMA is not only going to halt climate change, but its going to fund a space mission to seek out new life and new civillisations. But the essential and useful goal was to provide clarity. To provide information.

Surely, it was to provide clarity in the banking sector specifically, by moving the loans out of that sector, and clarity in the public finances, by taking the hit on the balance sheet publicly?

To do that, the details of who's in or out is irrelevant - nobody suggested that the idea was to provide clarity to us, because our interest is, frankly, largely prurient, because it's entirely irrelevant to the process. Nor was there any commitment to providing clarity to people who are doing business with those entities whose loans are moved into NAMA. Entities whose loans are moved to NAMA don't get a choice in the matter, so a bad decision by NAMA could have a huge impact on their business, and in turn land the state with a huge compensatory liability.

cordially,
Scofflaw

The Raven.

In contrast to my normal disdain towards large scale developers on account of the sheer damage a lot of them have done to the environment (the built and natural heritage), and the Irish economy, I find myself in this instance on the side of Paddy McKillen versus NAMA. He is the first to take a legal challenge against NAMA and his action promises to expose its lack of constitutionality.

McKillen, who describes himself as an investor rather than a developer, is a highly successful businessman with a huge portfolio of investments. According to various articles, he hasn’t indulged in reckless borrowing like most of the developers during the ‘boom’, and I haven’t seen any evidence on his part of having caused any major damage to the environment. In fact he has shown concern for architectural heritage and welcomed An Taisce’s support for the same. I don’t wish to paint him as a saint, and some of his earlier associates might not stand up to scrutiny, but this particular case is of immense importance.

According to the Times article: http://www.irishtimes.com/newspaper/breaking/2010/1005/breaking13.html

Borrowers moving to Nama are not entitled under the legislation to know if their loans are moving to the agency and the grounds for which they are moving. They also cannot make representations to stop them moving, said Mr Cush [SC for McKillen]. Borrowers "can do absolutely nothing", he said.

"This must be the most complete statutory shut-out that has come before the court," he said, adding that Nama's procedures were a "total abrogation" of fair procedures.

I don’t know how anyone could argue against that. This is an appalling piece of legislation.

Mr Cush said his case centred on five key points — (1) the procedure adopted by Nama and the broad definition of “eligible bank assets” in the Nama Act denied Mr McKillen’s constitutional right to property and fair procedures.

There was no legal case which allowed complete abrogation of the right to make representations prior to acquisition of loans and Mr McKillen was shut out by the Nama Act from any remedy.

It was also argued (2) that Nama, in exercising its discretion whether to acquire the loans, failed to have regard to relevant considerations and (3) the December 11th/14th 2009 decision to acquire the loans was taken at a meeting prior to the actual establishment of Nama, was not validly ratified and was null, void and of no effect.

Having regard to the February 2010 European Commission decision approving Nama, it was argued (4) at least some of a borrower’s loans must be impaired before any are acquired but none of Mr McKillen’s loans were impaired. If that was incorrect and it was also wrong to argue fair procedures must be read into the Nama scheme, then (5), the relevant provisions of the Nama Act are unconstitutional given the breadth of the definition of eligible loans.

Nama’s only record of its decision to acquire €2.1 billion in Mr McKillen’s loans was contained in one word — “disagree“- on an Excel spreadsheet, counsel said.

It is high time that someone took up the gauntlet against NAMA and exposed it for the sham that it is. Paddy McKillen has enough money to take this risk and I say good luck to him. There would be no need for secrecy if NAMA did what it was supposed to do and only took over non-performing loans taken out by incompetent, unscrupulous developers and con men.

[Emphasis added to quotes]

fmcattack

The Raven. wrote: »

It is high time that someone took up the gauntlet against NAMA and exposed it for the sham that it is. Paddy McKillen has enough money to take this risk and I say good luck to him. There would be no need for secrecy if NAMA did what it was supposed to do and only took over non-performing loans taken out by incompetent, unscrupulous developers and con men.

[Emphasis added to quotes]

I dont think this is the point.

How would NAMA make any money at all?

NAMA needs the good loans and the bad loans. About 30%(from memory) of NAMA loans are good ones i.e. they are being repaid in full.

This was the fundamental principle of NAMA, that they take all loans over a certain value, wither it is good or bad.

Also arent NAMA supposed to issue funds over a certain value? So if mcKillian needs more funding he will have to go through NAMA?

ei.sdraob

After reading few posts a disturbing thought crossed my mind

what is there to stop "anyone" from posting to a site like wikileaks with alleged NAMA documents revealing locations and names just plucked out of air or deliberately targeting competitors and then contacting the media and pointing the fake "leak" out

since NAMA is secret and cant confirm/deny anything, the media could have a frenzy on people who could be entirely innocent in the process damaging reputations.

just thinking out loud now, if anyone wants to get at few top developers ...

fmcattack

id say all the 'top developers' are in NAMA so it wouldnt be a lie