RTE’s new season of Prime Time continues with a NAMA special this evening. Presented by former Sunday Business Post chief news correspondent, Ian Kehoe, it will be the first major RTE documentary on NAMA since Rita O’Reilly’s special last December 2010 which questioned why so-called bust developers still enjoyed wealth (that was the Prime Time Investigates programme which famously featured secret filming of Gerry Gannon and the wife stuffing the boot of a Range Rover with Brown Thomas shopping bags).
According to Ian Kehoe’s blog in advance of tonight’s broadcast, the programme set out to answer two simple questions – what is NAMA and is it working?
With respect to the first question, I hope we get a more considered answer than would be suggested with Ian’s claim that NAMA is “the largest property company in the world”. NAMA is no such thing. NAMA is an asset management company with approximately €30bn of loan assets under management. In a small number of cases, NAMA has foreclosed the loans and appointed receivers but the 887 properties currently foreclosed represent but a fraction of the 16,000+ properties securing NAMA loans. So at best NAMA is a property loans focussed asset management agency. There are a great many property asset companies whose physical property assets run into many billions – GE Capital Real Estate claims to have USD $68bn (€50bn) of property under management. And in terms of managing property loans which represent most of NAMA’s assets currently, as we painfully know many of our banks have equally large property portfolios. So let’s kill off that “largest property company in the world” rubbish – NAMA isn’t, and that fact may well be an important consideration if NAMA is broken up in future (remember FG’s manifesto and its proposal to offload NAMA’s assets to 3-4 asset management companies?)
Ian’s blog indicates this evening’s programme will deal with NAMA’s treatment of developers and asks “while the country is facing austerity, why are many developers are being paid six-figure salaries by NAMA, and are even being offered a cut of profits on deals” NAMA claims that paying a developer is cheaper than appointing a receiver and given that property receivers in Ireland typically cost €200+ per hour (and up to €800+ per hour for share receivers), paying a developer might represent value for money. NAMA has not confirmed salaries on offer – from recollection the only statement from NAMA which directly addressed the issue was about the rejection of a €1.5m salary request – but sources have claimed that salaries in the €192-200,000 a year range are on offer. The profit share issue was examined on here recently and is controversial, but NAMA claims it incentivises developers who are entrepreneurs at heart to over-deliver on projects being managed, and NAMA takes the lion’s share of the over-delivery.
The programme will also examine what it terms a “so-called cultural dividend” about which “we heard much” when NAMA was being established. I must say that I can’t recall hearing the term “cultural dividend” at all when NAMA was being established. Nor has Google, so if you search for “cultural dividend” + NAMA, you get nine results, only seven of which are to do with Ireland’s NAMA and none of these entries predates 2011. The programme will focus on one venue, The Complex in Smithfield and pose questions about NAMA’s non-commercial remit. The blog claims that “the agency is obliged by law to provide a social dividend” which seems like a bold statement presumably based on section 2 (b) (viii) of the NAMA Act which says one of the purposes of NAMA is “to contribute to the social and economic development of the State” – it’s a bit of a leap from that to say that NAMA is “obliged by law” to provide a social dividend and one heck of a leap to claim that NAMA is required to provide subsidized rents to specific arts facilities.
There’s an inevitable temptation on here to be sniffy about RTE’s presentations on NAMA. In the past they have been riddled with basic factual errors which made for laughable factual programming. Rita O’Reilly’s programme last December 2010 was a step-change for RTE and seemed to get its facts right and there was no doubt that it delivered visually iconic programming. Though in the end, the programme didn’t really provide very much information that wasn’t already in the public domain. I can’t immediately see from RTE’s annual report, the cost of an hour of RTE 1 current affairs programming but I’d expect you’d be looking at well over €100,000, particularly for a programme that has apparently been months in the making – “we have spent the past few months journeying deep into NAMA-land. We have gained exclusive access into NAMA HQ, and over a number of months, conducted a series of interviews with the people who run the agency” – so let’s see what €50,000+ of our money gets us in terms of information. And to what extent you will have learned “what is NAMA and is it working”
RTE Prime Time NAMA-land is on RTE 1 this evening at 9.35pm and should be available online, both as a simulcast and for future viewing.
UPDATE (1): 7th September, 2011. The programme is now available online here (click the “latest video” on the right hand side to start streaming)
UPDATE (2): 7th September, 2011. First up it should be remembered that Prime Time typically has an audience around the 500,000-mark. From recollection Rita O’Reilly’s special on developers last December 2010 attracted about 700,000 viewers. So that’s about 25% of all adults in the country. If you’re reading this blog then the chances are that you have a good idea of what NAMA does and be aware in some detail of the issues surrounding the agency but Prime Time has to cater for a wider audience that might have little or no idea of what NAMA does. So I think the programme can be forgiven in respect of some accusations of being lightweight and shallow.
But having said all of that, the programme should have had a purpose, a message to communicate, a theme. And from the perspective of my armchair, the programme failed in that respect, it had the appearance of throwing lots of different mud at a wall hoping some would stick. Non-sequitur followed non-sequitur and it was difficult to see any train of cohesive thought leading the programme on.
Specifically, I had hoped the programme would answer the questions
(1) What is NAMA
(2) Is it working
We received a partial answer to “what was NAMA” in the sense that we got a potted history of its operations. But over its 10-year lifespan, loan acquisition and moving against developers will be a footnote to what is a large asset management company – developments, disposals, demolitions will be the stuff of its operations, profit will be its ultimate financial metric, minimising interference in the normal operation of the market will be an aspiration. And I must say that the programme seemed very limited in its coverage of these issues.
In respect of the second question – is NAMA working – you’d expect the programme to have set out some metrics by which NAMA might be judged. Profit, operations, business plans, disposals, developments, distortion of the market – but again as far as I could see there wasn’t even an attempt to provide any sort of objective measurement.
So what did we get for 40 minutes which probably cost us in the region of €100,000 to produce? A sense of the size of NAMA certainly, graphically illustrated by a rooftop panorama from a central Dublin rooftop which identified some of NAMA’s most high profile assets (Liam Carroll’s Anglo HQ, Bolands Mill, the Gasworks though I’m not sure Treasury’s National Convention Centre is in NAMA).
A few developers cropped up. Ray Grehan who along with brother Danny was on the wrong end of a NAMA receivership in May and a subsequent action at the High Court which is ongoing. The RTE interview with Ray was apparently conducted before the High Court action, and the thought crossed my mind that NAMA’s legal action might in part have been prompted by the interview. Certainly the Grehan foreclosure seems to be a very bad-tempered affair with claims that Ray can’t set foot on his former pride and joy, the Glenroyal hotel. I wonder if, upon mature reflection, Ray would have a different take on his future dealings with NAMA.
Ulick McEvaddy, more an aviation businessman than a developer but involved with Gerry Gannon, offered the view that NAMA’s 10-year maximum lifespan doesn’t sit with his view of traditional property holdings which might be double that.
Niall Mellon who owes NAMA €300m according to the programme called for debt forgiveness for ordinary mortgage payers and developers. Michael O’Flynn said that NAMA was tougher on developers than the banks and that NAMA has been learning on its feet rather than through design, and more generally that there was an urgent need for funding for the property industry to get back on its feet.
British Liberal Democrat MP, John Hemming offered the view that managing for value was preferable to fire sales. Housing minister Willie Penrose spoke about NAMA’s involvement in site resolution plans for ghost estates. Phil Tily of IPD claimed that proposed changes to Upward Only Rent Review commercial leases were stagnating the market here – he expressed the view that the proposed changes are “using a sledgehammer to crack a nut”. John Corcoran’s Korky’s shoe-shop on Grafton Street complete with new banner reminding FG of its manifesto commitment was pictured.
Economist Peter Bacon expressed disappointment at what he sees as the incarnation of NAMA as a debt collection agency rather than an asset management agency. Economist Ronan Lyons claimed that NAMA had failed in its primary objective of reinvigorating the banks and that the agency has the potential to seriously damage the Irish economy in its pursuit of profit. Economist Michael Taft claimed that by reference to NAMA’s original objectives the agency had failed.
Journalist Fintan O’Toole encapsulated the apparent unfairness of developers making an “excellent living” and “doing pretty fine” out of NAMA whilst the economy and population generally suffers. Journalist Neil Callanan suggests that there will be further examples of developers filing for bankruptcy in theUK, in the steps of the pathfinder, John Fleming.
A funny old breakfast club meeting with Peter Mathews, Carol Tallon, Nick Leeson and Richard Curran seemed like an odd gathering though the conclusion from the cacophony seemed to be that NAMA was playing for time and was still capable of being reversed.
The only piece of news that I noticed was: (from 15:00 approx) “Amazing as it may seem, Prime Time has learned that banks have not yet handed over the due diligence, that basic paperwork behind any loan transaction for €17bn of loans. That means that many of them may be entirely unenforceable, more billions we may never see again” It’s not clear what NAMA has paid for these loans and if there will be any potential future adjustment to NAMA’s acquisition costs or profitability.
The programme concluded with a remark from the NAMA Chairman, Frank Daly
“I have spent all of my life, fortunately or unfortunately, collecting money on behalf of the citizens of this state I didn’t think I’d be doing it but I will probably be doing it again for another few years at NAMA but I am absolutely confident that it can be done and that it will be a success”
NAMA Wine Lake 
@NWL
While you are correct that much the information will be in the public domain already, I think many people in the country will be completely unaware of it.
@D_E, indeed that’s a fair point and was readily conceded with the Rita O’Reilly Prime Time Investigates programme on the developers last December 2010, it was one of the most watched programmes of the year on TV (after the Rose and Toy Show) and deservedly so. I would guess it cost well north of €100,000 to make but it did inform a wide audience about NAMA’s activity.
How will this evening’s programme be judged? Again, Prime Time has a wide audience but you’d hope it will be left with a decent idea of what NAMA is doing and how well it’s doing it.
“I can’t immediately see from RTE’s annual report, the cost of an hour of RTE 1 current affairs programming but I’d expect you’d be looking at well over €100,000” Is pat Kenny an external cos centret? A kind of private SPV?
Of course we all know what the cost of running the NAMA SPV for an hour would be? As for nomenclature, the vast majority of people passing a NAMA property or site go “See that one, that’s a NAMA property” and what is more they are right! If you hold the little bit of paper that controls the property then you own the property. The fact that you pull the strings like a marionette and hide behind “we only hold he loans” is laughable. Much of law is based what the ordinary person believes to be the meaning of something. Ordinary people believe that NAMA is a property holding company.
I hope the program concentrates on what NAMA was supposed to achieve and what NAMA has achieved besides the losses to date. I would love to see loads of “this will get lending going” “we must avoid nationalising banks at all costs ” or “we will be holding these properties/loans for their LTEV’s etc” . I need cheering up so let’s hope it provides a bit of light entertainment.
You have to think of the RTE “investigative” approach in a different way.
Think more Tony Soprano.
Negative/Investigative NAMA programme = fancy spending some money?
Positive/non-investigative NAMA programme = see what your money buys?
This is an news media organisation that missed a massive property bubble.
This is an commercial media organisation that reaped huge advertising revenue from a massive property bubble.
This is a news media organisation that has failed to uncover any scandal in the fallout.
This is a commercial media organisation that has not had one legal case taken against it by a high profile figure in the fallout.
I can’t see anyone in NAMA or government buildings having a sleepless night after this.
“This is an commercial media organisation that reaped huge advertising revenue from a massive property bubble.”
I don’t remember RTE gaining huge advertising revenue from the property lunacy. Apart from myhome radio advertising I didn’t see a lot of property porn unlike the print media especially that bastion of morality the Irish Times.
Did I miss something?
@ What Goes Up…
“I can’t see anyone in NAMA or government buildings having a sleepless night after this”.
No, not as long as the docile and foolish tax payer stumps up and the bailout is there to be tapped. In truth, this “exposé” will be a typical Irish hand rubbing and hand wringing exercises dressed up as exposé. Terrible what’s going on kind of thing, and us plebs not able to do a damn thing about it. We all know that nobody has been held accountable for the countries independence being squandered. So why, for instance, would someone that was put in charge of NAMA or that only ruined a bank worry? Surely, they commit mere venial sin compared to the mortal sin others commit? BoI, expanded it’s loan book by 100bn in 4 years but sure that was nothing compared to what the boys at Anglo got up to, was it? The golden rule is “close ranks, nobody must be held accountable” because if ranks were broken, flood gates could open. You see, it even rhymes.
Small wonder ordinary people walk away feeling helpless, shrugging their shoulders when they see, yet another RTE “exposé”. Then, they pick up their newspapers to read about another public servant, who was at the heart of social partnership and benchmarking agreements, being handed 700,000 of their Euro’s. Meanwhile, the ESB and gas bills shoot onwards and upwards, facilitated by deregulation, competition and yet another “regulator”. Not to worry RTE can do that “exposé” of the trade union official talking about ESB workers being “spoilt”, of “gravy” being poured etc.
@paddy19
Oh… and another thing Paddy… HSBC sponsoring Drivetime on the radio, Quinn sponsoring the Late Late on the television… you tend to find the public service bit of Public Service Broadcasting gets compromised once the sensitivities of your advertisers need to be accommodated.
The Irish Times quoted the following from Maarten Van Edens’ letter of resignation from Anglo about the lead up to the collapse of the bank: “Apart from the recklessness, overconfidence and the total lack of professionalism, one sees clearly a lack of checks and balances not only within Anglo but within the country/ system as a whole……. Parties were not dealing with one another at arm’s length, transactions were circular in nature, back to back and off market pricing. There was misrepresentation, market manipulation and market abuse.”
http://www.irishtimes.com/newspaper/frontpage/2011/0905/1224303500416.html
Is there any danger that similar comments might ultimately apply to Nama? Shouldn’t taxpayers be given assurances on this via an extension of FOI to Nama and relaxation of client confidentiality rules in addition to (so-called) Dail scrutiny and CAG Reports?
It seems to me that there is a communal denial in Ireland that the country is and has been, since the sixties, riddled with corruption and cronyism. It’s obvious to me from afar but everyone that I know in Ireland, including my family, denies it. Yes, there a level of corruption everywhere but Ireland is an exception because it’s not prosecuted. The multi-nationals are insulated/protected from it because they operate at a global level.
it goes further back than that to the very founding of the state.
http://www.finfacts.ie/irishfinancenews/article_1018415.shtml
” that the Act which licenses the Sweep was so framed as to prevent the Irish public knowing the real amount of money spent in running the scheme.”
http://www.independent.ie/unsorted/features/how-i-exposed-the-sweepstakes-scandals-191645.html
RTE is about as likely to affect NAMA as a GAA ticket steward is to affect he all-Ireland final.
The purpose of RTE, like the rest of the media outlets, is to support the status quo. Under massive public discontent, they may occasionally put up an investigative fig leaf for appearances sake, but nothing will emerge tonight which will seriously impact NAMA, its operations, or its remuneration structure. It’s not worth a pension (mortgage?) to anyone at RTE for a start.
Call me when RTE manage to get a single individual to resign.
An entire investigative program on NAMA and Johnny Ronan wasn’t mentioned even once. Colour me surprised.
The entire show was a long procession of people from all walks of life griping in one way or another for a suck at the NAMA teat. Developers looking for funds, write-offs, TDs looking for finished estates, MPs looking for an end to fire-sales, artists looking for free creative space. The program devoted almost no time to alternatives to NAMA or to the prospect of winding it down. Thank you RTE.
The only happy ending to this evening was for the developer who’s just about to come out of bankruptcy in the UK. Personally, I’d use G2 at this stage.
@OMF, G2? What has the Irish intel services to do with this?
Why, it’s time to clean-up of course.
In all seriousness, given the ongoing failure of civilian agencies, the political process, or media scrutiny(pfff!) to deal with the fallout from the bubble bursting, I wouldn’t be surprised if the army decided to intervene in one form or the other. Maybe I’ve been reading too many Tom Clancy novels. Maybe…
Inaccurate and populist with no depth. Just tabloid media soundbites..
@WSTT, RTE might say that the programme will have a 700,000 domestic audience and it caters for that. But will the average person know what NAMA is doing and whether it is doing it well or not? The programme at least did its fact checking.
@wsst, +1 RTE another useless quango.
@NWL, Yes it did check, but it accepted what was given (it did not look behind the facade) such as NAMA’s figures on losses to date. Neither did it investigate NAMA’s statements for veracity. No discussion on NAMA’s future plans for its loan book. No discussion on how NAMA hope to make their €1 billion profit, seeing that they are already in the hole for €6 billion. No strategic answers at all. No vision for the future. Just the usual rehash of “who is to blame” and “its a silver spoon for the developers”
I remember going into Anglo Irish Bank just before it entered its death throes. The property market was collapsing and Anglo was desperately trying to get some control over the money that it had committed to its borrowers. The mantra was “Sign these personal guarantees or we will not issue the cheque that is needed to pay the builder and you will have to close the site.” If you demurred, the response was “We don’t need developers, they are superfluous. We can manage this out ourselves.” It was the hubristic misjudgment of conceited individuals who had never left the boardroom table.
Of course they couldn’t manage it out, but like NAMA in its early stages they suffered from the delusion that they could. NAMA is no developer’s silver spoon, far from it. But if there is no co-operation between the developers and NAMA, there is little hope of recovery in the domestic economy. At the present time no real communication or cooperation exists. Just a wary mistrust. And that is no basis for the working relationship that is needed to get us out of this mess.
@WSTT, fair points about the programme itself. Perhaps I need look at it again, but it did seem to suffer from the “Irish disease” of focussing on process at the expense of objectives. If the programme was to explain what NAMA was and how well it was doing, I think most people will come away uncertain (and this time not just because of the eerie background music or “Jaws light” as someone called it).
To know how well something is doing, you have to have some metric by which you can judge performance. Perhaps because of political managerial incompetence NAMA escaped with not having year on year stated objectives, as most managers would understand them. Instead there is a 10-year horizon after which we can judge success. The disposal of 25% of debt by 2013 crept in late in the day and it not clear how this objective contributes to NAMA’s overall function, and if in 2014 NAMA turns around and says we only disposed of 10% then how will that stack up against its 10-year objectives. So how well is NAMA doing? I don’t think the programme answered the question.
By the way, your recountal of Anglo in its dying days sounds like it touches on duress and might be a basis for repudiating a contract. Yes banks tend to have all-encompassing loan terms but there is also a basic principle of an unfair contract. Given the roulette wheel that is our judicial system, it might be worth a spin of the wheel (though to be clear, this blog doesn’t give legal advice).
@ OMF
The army may intervene? I don’t think so. They like most of the other government workers on this little island are among the best paid in the western world the head of the armed forces in Ireland is paid more than his counterpart in the UK which has nuclear weapons, nuclear submarines etc. Our lot can retire at 50. I would expect a military intervention from Libya or one from Iraq than our own lot.
Regarding the program it was the usual old piffle. Bacon now says it is nothing more than “a glorified debt collection agency”. A washing of the hands? Then we are informed that the ‘due diligence’ for loans has not even been handed over yet by the banks? Due diligence? Were we not told that the cheques were often given out before the paper work which could be filled in at one’s leisure afterwards. Then Ronan Lyons wearing his Oxford hat, opines, “that it could do a lot of damage”. Well spotted Ronan!
Our Labour junior Minister for housing puts all that stuff about “social dividends” not being delivered, to rest, by declaring that “it was his duty to secure the maximum social dividend”.
Michael O’Flynn wonders about where the funding for a recovery is going to come from as we still have no functioning banks “in two years time, if we were to have a recovery who is going to fund?” Well he may have said in ten years time if we have a recovery because that is a much more likely time scale. Finally, no mention of NAMA losses only that the loans had to be written down by another 1.4bn last year and that NAMA will be disgorging itself of 2.4bn in fees.
I don’t mean that the army should occupy the streets, but perhaps it is time to start using the army to tackle banks, developers, etc in the same way as it was used to tackle the IRA, and other dangers to the state et al in past years. That’s why I mentioned G2. Intelligence gathering, comprehensive personal investigations, offences against the state, etc. Even if they only uncovered kompromat, it would at least make some effort to tackle the problem.
The Irish state is bleeding out and those responsible are still sucking at the wound; and no-one in power is willing or able to stop them. Isn’t the army supposed to intervene in these situations?
One thing is for certain: we can’t rely on RTE to save us.
Two ways to judge the programme last night.
– The first is to simply look at the point that they made about NAMA buying the loans:
They said loans of €70Bn were purchased by NAMA for €30Bn with the banks having to absorb the other €40Bn.
That right there tells you exactly who’s perspective the programme adopted.
Guess no one told them who owns the banks losses or how much the taxpayer has ploughed in to recapitalise the banks and why.
Or maybe they did… but the narrative required NAMA to be shown to be doing their bit and the banks to be getting screwed.
– The second is “The tale of the two developers”:
Ray “the bitter one” Grehan locked out, sitting in rubble and leaving the country for good.
Niall “the philanthropist” Mellon inside NAMA working to pay his debts, making time in his busy schedule to chat in an airport-like setting and pleading for debt forgiveness to stop the suicides.
NAMA gets it’s moneys worth. I’ll leave the last word to the lad Willie:
Actually, I was particularly taken with Brendan McDonagh’s comment that he more or less couldn’t be bothered with trying to make a penny more from the loans that what NAMA paid for them. This doesn’t strike me as an agency out to maximise returns.
I don’t even understand what he’s so bitter about. He’s been let off scott free, all debts written down and he can start again. Same with the rest of the developers. Bernard McNamara is already sipping orange juice in Saudi Arabia according to the program, to say nothing of the developers still in NAMA who remain on six figures salaries to manage the very assets they mismanaged into ruin.
Bitter?! I can’t see how these guys aren’t as sanguine as a retiring government secretary right now.
@NWL, Thank you for free legal advice! I didn’t succumb however. I dislike being bullied.
The programme last night only gave two insights, both of which are obvious to anyone who follows NAMA. Both Frank Daly and Peter Bacon confirmed that it had morphed into a debt collection agency, rather than the asset management agency that it was designed to be and that its name implies. Because of Frank’s background, there was a fair chance that this would happen.
It also confirmed the fact that its remit had changed, from getting credit back into the economy through the recapitalisation of the banks to making €1 billion on its loanbook. It seems to accept that it failed in its first objective.
The programme itself was more notable for what it missed than what it included – down to the locked toilets in the NAMA offices!
Interesting follow on point from prior show regarding Wags and assets overseas.Appears to be a very low priority.
@Nwl
You seem to have a bit of a comments Bermuda Triangle on this ammended post. Cant be bothered to re post – even though it was the most fascinating thing you would ever have read on the internet, obviously.
@grumpy, by “comments Bermuda Triangle” do you mean a comment you posted has not been published? If so please let me know and I can alert WordPress, the people who host the NWL blog.
@NWL
did anyone ever give u 100, 000 for doing this site?
probably better value
Christy
+1
@grumpy. I think that it went “walk about” to the international investors thread. It seems to be quite comfortable there :-)
@NWL. I see that Phil Tily of IPD has been reading namawinelake and plagiarising his comments about sledgehammers and nuts from here.
to be more balanced the show should have shown the difference between a room for a dole interview and a NAMA office when you owe Billions/Millions.
no bottled water for dole applicants!!!
i thought the show was good, it was aimed at a broad audience.
I think they could have made more of the arrogance and ignorance of our politicians in the whole story, but as usual, nothing is ever anyone’s fault. It’s like the weather, your supposed to just take it.
[…] 4th October, 2011. Exactly a month ago, RTE broadcast a Prime Time special on NAMA entitled “NAMAland” in which Ray made some remarks about NAMA and his future plans. […]
There’s a lot of cackling about Vincent Browne’s article in today’s Irish Times (05.10.11). The most surprising thing for me was that he watches that bloody ‘Saturday Night Show’. Other than that, Harry Crosbie was only singing from the same Hymnsheet as Daly & McDonagh were on the Prime Time Programme. And to think that these guys are being paid bonuses etc.