There was an odd story in the Irish Times this morning where Simon Carswell reported that NAMA had donated to our National Gallery a painting by Irish painter, John Lavery. NAMA’s largesse came after it took possession of Top 10 developer, Derek Quinlan’s assets following foreclosure action last month. There is a lack of clarity in the article – on one hand, it seems to be the case that NAMA is bartering the donation in return for curatorship services provided by the National Gallery in respect of the remainder of Derek Quinlan’s art collection and on the other there is a suggestion that the donation is (to quote the Irish Times citing a NAMA spokesman) “a goodwill gesture to the National Gallery and to the Irish people to offer the National Gallery one piece of art from the collection for free given the fact that they advised it was of importance to the heritage of Ireland”. The painting to be donated is called “The Return from Market” and according to Bourne Fine Art dealers in Scotland, it was painted in the 1880s and then passed through inheritance to a certain Lady Sempill and then sold to Sotheby’s in 1970 who sold it to the Fine Art Society in London, it was then in a private collection until 2001 when apparently it was acquired by our own Derek Quinlan.
The painting is said to be worth €300,000 now though it was apparently valued at GBP £465,000 in 2001 – €530,000 at today’s exchange rate. I found the report this morning extremely troubling.
NAMA has two codes of practice with which it complies when making disposals – one is for disposing of loans which doesn’t concern us here. But the other is for the disposal of real property; NAMA says it complies with the Code of Practice for the Governance of State Agencies 2009. That says (from page 20)
“The disposal of assets of State bodies or the granting of access to property or infrastructure for commercial arrangements e.g. joint ventures with third parties, with an anticipated value at or above a threshold level of €150,000 should be by auction or competitive tendering process, other than in exceptional circumstances (such as a sale to a charitable body). The method used should be both transparent and likely to achieve a fair market-related price. The anticipated value may be determined either by a reserve price recorded in advance in the State body’s records or by a formal sign-off by the Board on the advice of the Chief Financial Officer (CFO) or, if delegated by the Board, sign-off by the CFO or the Board Audit Committee, that, in its view, the anticipated value is likely to be less or greater than €150,000. In determining market value, regard should be had to accounting standards best practice inIreland. NAMA was asked for comment on the reported donation, and has not as yet responded.”
There doesn’t seem to any dispute that the donated painting is worth more than €150,000. The painting is not being sold to a charitable body in that this is reportedly a donation and I don’t believe the National Gallery is a charity. Even if it was a charity why should NAMA be able to select it for its largesse? So where is the auction or tendering process?
There must be a serious concern if NAMA has acted in the way suggested by the Irish Times today. Surely the agency should be maximizing the value of the painting for the taxpayer. If the value of the painting is €300,000 and NAMA is receiving €300,000 of curatorship services in return, then the donation would be consistent with the objectives of NAMA as set out in the NAMA Act. I’m no expert on art storage fees but in terms of providing insurance, security and the proper environmental conditions, €300,000 would get you a lot if you were seeking car storage for example. It seems unlikely that it is an equal barter. So has NAMA broken the code?
UPDATE: 7th July, 2011. The painting finally went on show at the National Gallery yesterday and is reported here by the Irish Times who also add a quote from the NAMA chairman, Frank Daly “We are grateful that the National Gallery continues to store a number of pieces of work on our behalf while we finalise preparations for their disposal by public auction”
UPDATE (1): 3rd August, 2011, The painting referred to above can be seen in situ at the National Gallery here.
UPDATE (2): 3rd August, 2011. On 27th July, 2011, it was reported that NAMA had sold a Jack B Yeats painting “National Airs/Patriotic Airs” for €175,000 to the National Gallery.
UPDATE: 11th December, 2011. It has been reported in today’s Sunday Independent that the Lavery painting donated to the National Gallery was bought by Derek Quinlan for “over €800,000″ in 2001.