I must say that for myself, I am beginning to seriously doubt Senator Mark Daly’s claims of wrong-doing at NAMA, something covered extensively on here last week (part 1 detailed the interview on the Pat Kenny show and part 2 examined the issues) following claims made by the Senator reported in the press and which formed the basis of a 20-minute interview on the Pat Kenny radio show. Over the weekend, the Senator was present in the Seanad for the debate on the Finance Bill and again raised his claims that NAMA was selling property below value and not following its own code of practice.
The reason I doubt the Senator’s claims is that he was challenged on at least three occasions to provide details of the transaction. Three times - by Minister for Finance, Brian Lenihan who was present in the Seanad to guide the vital Bill on its way and by senators David Norris and Jerry Buttimer. Yet Senator Daly demurred and made the laughable claim that he was not a Garda and that he hadn’t evidence of “wrong-doing”, just bad commercial practice. He said he would provide details of the alleged transactions to NAMA but didn’t explain why he hadn’t already done this (though he plainly had time for self-promotion last week including a 20-minute stint on the Pat Kenny show). It is beyond me why he did not respond to the challenges and provide details of the transactions under privilege. It seems that with the dissolution of the Oireachtas tomorrow that the opportunity to provide details using privilege might have passed.
Below is the transcript of the exchange in the Seanad, it ends abruptly and the Senator did not speak again, but as you can see he made the allegations again and refused point-blank to divulge details to the Seanad under privilege which could then be verified. You can draw your own conclusions – personally I think it is irresponsible for those in positions of authority (even if they might be out on their ears in 30 days) to make claims which undermine trust in public institutions and then refuse to pursue the claims. Senator Mark Daly is a 34-year old Fianna Fail senator who was an auctioneer “in a former life”.
Senator Mark Daly: As Senator Leyden said, we should make declarations about this and I, as an auctioneer, was involved in selling section 23 properties.
Senator Shane Ross: Shame.
Senator Mark Daly: I felt at the time that some of these tax exemption sections were quite good, such as the section dealing with nursing homes, but the holiday home exemptions went on for too long. Senator Ross is right about that. They should have been closed off in many areas.
In my home town there were a number of planned developments and we were lucky they did not go ahead. If, however, the section was taken out, people who rented out a business such as a shop using section 23 relief to shelter the income from the shop would now be in a situation where the rent from the shop would no longer be sheltered and they would have to use what was left from the after tax income from the shop to pay off the section 23 mortgage because none of the section 23 properties would provide any income, not even enough to pay off management fees. We would then be left with a situation, especially for section 23 holiday homes, where the estates would not be managed properly because there was no income and they would deteriorate.
I agree with the thrust of the recommendation but it is a shame the Labour Party did not allow for more time, perhaps three months. The idea is good and the Minister is looking at the situation. I raised concerns previously about the selling off of these estates. There was a case in Kenmare where the auctioneers were involved in a fire sale. The Irish Examiner property supplement published a headline reading “Fire sale in Kenmare”. The auctioneers were telling their friends they should buy these because they are bargains. Auctioneers are supposed to achieve the maximum price, not sell bargains. The loans were held by Anglo Irish Bank – the taxpayer – which told the receiver to maximise the value of the properties, who then told the auctioneer to sell the property and the auctioneer told his friends they were bargains. They were selling them below the market rate. We told those auctioneers they were selling below the market rate, that we had sold six similar properties in the last six months and we estimated that the price being asked would cost the taxpayer €1 million.
Senator Paddy Burke: How does Senator Daly know the market value?
Senator Mark Daly: If that loss were extended to cover other fire sales in similar properties, including section 23 properties, the cost to the taxpayer would be in the hundreds of millions, if not billions, of euro. If section 23 relief is withdrawn unilaterally, there will be a double crash.
I raised a related point during the week that NAMA was not following the legislative provisions in the selling of properties under its control. It is not even following the code of conduct for State bodies. When it comes to the sale of section 23 properties and other properties by liquidators, we need transparency. Legislation provides for that but NAMA, in the case of numerous properties being sold on its behalf by the banks, is not following the provisions laid down. People have come to me disgusted that the guys who had borrowed the money originally are buying back their own debt for 50% or 75% less, knowing well that the properties were undervalued. I will speak against my profession in this regard. The valuers undervalued the property initially, because most of their valuations were desktop valuations. They undervalued it and the banks took a haircut of 40%. In the case I came across the original loan was €12 million and the haircut was €6 million, while the actual value of the property was €9 million. The developer went back and arranged for a buddy to buy the property at the haircut price of €6 million and sold it on for €9 million, costing the taxpayer.
An Cathaoirleach: We will be debating this until 12.30 with the way Senators are making speeches.
Minister for Finance (Deputy Brian Lenihan): The Senator should supply the details of that transaction to NAMA.
Senator Mark Daly: I will.
Deputy Brian Lenihan: The Senator has not done so to date.
Senator Mark Daly: I have not. I am not an investigator, but NAMA is not following the code of conduct. It says it does do not have to. Transparency is the key factor in this matter, but NAMA is not following the code of conduct.
Deputy Brian Lenihan: The Senator is under privilege in this House, but he should provide whatever information he has.
Senators: Hear, hear.
Senator David Norris: The Senator is a public representative. He should name and shame.
Senator Jerry Buttimer: The Senator should give the Minister the information.
Senator Mark Daly: As I am not a member of the Garda, I cannot do that. When I have information of wrongdoing, I will put it before somebody.
Deputy Brian Lenihan: The Senator has not suggested wrongdoing, just bad commercial practice.
An Cathaoirleach: We are on recommendation No. 1. The Senator has made his point well.
Senator Mark Daly: NAMA has turned around and said it does not have to follow the code of conduct for the sale of State assets. I maintain these are State assets because we provided the money. NAMA owes us the money. I do not care whether NAMA follows the code or not, but there is no transparency and there are bad practices going on. I do not want to be doing a post mortem here in a year’s time when it has cost the taxpayer hundreds of millions of euro.
Deputy Brian Lenihan: We would all agree with that, so please give me the information
And that’s where this exchange ended. The transcript and context is available from the Oireachtas website here.
UPDATE: 8th March, 2011. In what might be his swan song in the current Seanad, Senator Mark Daly has repeated claims that NAMA is breaking what RTE describe as “the spirit of the law” . Further it is reported that Senator Daly has written to the Attorney General Paul Gallagher asking him to investigate NAMA for alleged breaches of the law. The senator is still referring to what RTE describes as “a scam, whereby the original borrower of the loan would buy back their own loan book for less than the current market value.” The senator has yet again failed to provide any details which might be investigated. Whilst there is no evidence that the senator is continuing to make these allegations in order to raise his profile in the forthcoming Seanad nominations, it is indeed puzzling why he has not provided details of the “scam” using the privilege accorded to him in the Seanad. The Fianna Fail senator – try finding a reference to Fianna Fail on his website! – has published an exchange in the Seanad where the senator asks for a debate on the NAMA legislation. He makes no reference to the fact that he has been challenged on numerous occasions to provide details of the alleged scam.
UPDATE: 9th March, 2011. The transcript from yesterday’s business in the Seanad is now available here and the relevant extract involving Senator Daly is reproduced in full here. There is no further context in yesterday’s exchanges.
Senator Mark Daly: I will be brief in my contribution. Like other colleagues I welcome Senator Darragh O’Brien to the House and congratulate Senator Prendergast on her elevation to the European Parliament. It was the intention of the outgoing Government to bring in an amendment to the National Asset Management Agency Act. I have written today to the Office of the Attorney General to ask it to investigate NAMA for breaching the law and the intention of the NAMA legislation as passed by this House in the disposal of assets under its control. There is no transparency in the current process being pursued by NAMA. This lack of transparency has been confirmed to me by people who were asked to become involved in a scam whereby the original borrower of the loan would buy back his own loan book for less than the current market value thus causing a significant loss to the taxpayer. I have sought legal opinion from the Law Library on the matter, which has confirmed my suspicions that not only has the spirit of the law been breached, but also the law and its intent as passed by this House. Sections 2 and 10 of the National Asset Management Agency Act provided that the taxpayer must be protected, but this is not the case.
Senator Paul Coghlan: There has been no proof.
Senator Mark Daly: If it continues the taxpayer will incur losses of hundreds of millions of euro, which is why I have asked the Office of the Attorney General to investigate NAMA and the way it is selling the borrowings and the loan book.
Senator Paul Coghlan: The Senator’s allegations have been refuted.
UPDATE: 2nd June, 2011. Somehow or other Mark Daly has gotten back into the new Seanad. He wasn’t nominated by Fianna Fail leader, Micheal Martin but he’s back regardless. And today he seems to have repeated allegations in the Seanad that NAMA is up to no good in some instances. And as far as the reporting so far is concerned, YET AGAIN the Kerry senator has declined to provide details under the privilege provided by the Seanad to allow any investigation.
UPDATE: 23rd June, 2011. Senator Daly was in action again on 21st June in the Seanad, capitalising on Enda Kenny’s gaffe last week which seemed to give credence to Senator Daly’s allegations. The Senator said on Tuesday that his sources were willing to meet with the Taoiseach; he said “my sources are willing to meet the Taoiseach to explain how this is going on but I am sure the Taoiseach is well aware of it. My information comes from a confidential source. We often get information from sources who ask that their identities remain undisclosed. It helps us to do our job because, if we disclose our sources, people will not trust us with information.” Why it is that the Senator has declined to provide the address of the property in question is not clear, because presumably that would not identify his specific source. But even if it did, it is not clear why he does not provide details in confidence to NAMA. What is disconcerting is the impression that the Senator seems to be getting support in his allegations in the Seanad, with senators Jim Walsh, Labhras O’Murchu and Fidelma Healy Eames also using the claims as a basis for demanding better transparency and accountability from NAMA. These latter demands all seem well-intended and soundly based but they might be tarnished by being associated with Senator Daly’s claims which he has not evidenced in public using privilege or in private.