Minister for Finance Michael Noonan appeared before the Seanad yesterday where he answered a range of questions on the economy. The transcript of the session is now available here. Unsurprisingly he was asked about NAMA, in particular by Senator Marie-Louise O’Donnell who was exercised by NAMA’s secrecy. Unfairly I think, she characterized NAMA as being comprised of “wide boys” which, according to my dictionary, means “a man who is prepared to use unscrupulous methods to progress or make money”. Alas NAMA made a paper loss of €1.1bn in its first full year of operation, and although it is projecting an operating profit before impairments of €500m in 2011, the fact that the Irish commercial and residential markets have continued to tank will probably mean an overall loss this year also. Maybe Marie-Louise meant the NAMA “wide boys” -whose CEO is the €430,000 plus 60% bonus Brendan McDonagh and whose headcount now numbers 200 employees who earn an average salary understood to be €175,000 – were good at making money personally for themselves.
Minister Noonan was having none of it and described NAMA’s staff as being “above reproach” and “they are good public servants who are working very hard.” Minister Noonan described NAMA chairman, Frank Daly as “an open, decent man and a good public servant”
In response to the charges of secrecy, Minister Noonan confirmed the dedicated NAMA email address for TDs and Senators first reported on here last month. There is also a dedicated phone number. Minister Noonan said “They [TDs and Senators] are forbidden under law from lobbying but they are entitled to information, which is a way around much of the confidentiality restriction. If someone feels he has been wronged, he can get a read-out by getting a public representative to make a telephone call. He is legally protected because this has been officially agreed.” If you listen very carefully, you can probably hear the stampede of developers down to their local constituency offices!
Elsewhere Minister Noonan surprised the Seanad by saying that “a senior international banker has spent the last ten days examining NAMA for me. I am to meet him tomorrow evening and he will advise me” The former banker is understood to be this man, Michael Geoghegan who was the CEO of HSBC until March 2010. Minister Noonan went on to say that he did “not propose to change the [NAMA] legislation yet. In the last three months NAMA has moved more efficiently than was previously the case” There was no evidence offered to support that contention or indeed how or why NAMA was operating less efficiently beforehand, but Minister Noonan did praise NAMA for the sale of the Maybourne loans last week.
NAMA Wine Lake 
1. Nama should be obliged to produce “shadow” corporate balance sheets based on the par value loans acquired and to account for all debt and interest write downs/offs relating to the par value of loans acquired.
2. Section 10 of the Nama Act deals with the purpose of Nama and refers back to Section 2 which states that the Act’s purposes include protection of the taxpayer and contributing to social and economic development. For the avoidance of doubt and to make matters crystal clear, the Government should amend the Nama legislation to indicate that maximising the recovery of original debts, over and above the actual cost of acquiring loans and recovering expenses, is an explicit objective under Section 10 Subsection (2) (c).
These changes would increase transparency and eliminate any possible misunderstandings amongst taxpayers or Nama’s borrowers about Nama’s objectives.
Ooops meant to preface these points by saying:
If the the Minister is considering updating Nama’s legislation then I’d like to see the following changes:
I took “wide boys” to mean that Nama is populated by individuals who tend advance themselves by throwing their weight around. Certainly, it seems an apt moniker for many developers.
It’s the single worst video streaming service I’ve ever used, but in theory, you can watch a video stream of the Minister speaking to the Seanad at this link
http://media.heanet.ie/oireachtas/asx.php?Channel=Seanad&Date=20111006&StartTime=02:45:00.000&Duration=03:00:00.000
I doubt this will work properly, but I said I’d mention it. The video is incredibly flaky and never seems to work properly, but what does in the the oireachtas when you come to think about it.
on what basis do you believe the average salary of the 200 employees to be 175,000?
@DPP, that is based on the NAMA CEO’s evidence to an Oireachtas Committee for Public Accounts hearing in November 2010. He said that its core annual operating costs “including rent for the floor and all other overheads” were in the region of €25m and that “probably” 70% of this total represented salary costs. Translating this into hard numbers would mean that less than 100 people cost the agency €17.5m. This was in November 2010 when NAMA’s headcount was to be 100. That target headcount has since risen firstly to 150 (in Jauary 2011) and then 200 (announced in June 2011)
https://namawinelake.wordpress.com/2011/01/04/nama%E2%80%99s-core-operating-costs-set-to-increase-by-50/
thanks for the ref NWL. I won’t be firing my CV in on Monday based on this though; I think it is a little bit of a jump to assume that the current average ‘salary’ earned by an employee is 175k.
I think that in late ’10 the average cost to NAMA of each employee at that time may have been of that order with NAMA having to pick up Employers PRSI of 10.75%. Additionally NAMA may be paying salaries that reflect the PS pension levy that recruits from the private sector would not have been paying.
Finally, I would imagine many of the very biggest salaries (and I expect that there are some very substantial ones) would have been among the first in the door and that as they built their teams through 2011, with more junior staff, the average would likely have dropped.
I suppose the other question that arises is that of comparables or what alternatives exist . . . what would be appropriate? No easy answers occur to me there I’m afraid
@DPP, as to the current position with the extra 100 employees, pass, NAMA hasn’t provided a new annual cost estimate. The only anecdote that has cropped up here recently related to a €190,000 salary payable to a NAMA-employeed architect. NAMA has also advertised for new tenders recently – view here http://www.nama.ie/TendersIntro.php – eg legal, tax services so the NAMA headcount is being bolstered by external suppliers of services, and it seems that NAMA is keeping supervisory functions inhouse and these tend to be expensive senior positions, so you might be right about the later recruits, you might not.
@Brian Flanagan: You have the proverbial “two chances” of that happening, Brian. NAMA’s current objective is firmly based on disposal at whatever price is available in the market. You can forget sweating the assets to extract the maximum value. The mantra is “sell”
My suggestions for updating Nama’s legislation apply irrespective of Nama’s disposal strategies. They are primarily concerned with increasing transparency, clarifying objectives and honest accounting. If implemented, they could, of course, also help focus minds on developing the most optimal disposal strategies which as you suggest might be, for the more valuable assets, hold for the longterm rather than to sell for a quick buck.
@Brian; They say that the forces of darkness fear light. Let it shine, Brian! But as much as I agree with you, it will never happen. Oh, they will protest that there is total transparency, but you know what Mandy Rice-Davies thought about that.
In Namaland, spin and media perception is all and the agency’s reputation and public image must be protected, whatever the cost. The truth is disguised and the debtors are afraid to talk about it for fear of reprisal.
Did you ever think that if the debtors were to talk about it, what would happen?
Nama monitors this site day in day out. What would happen if people mutinied? There are many rumors surrounding the review and what it will result in.
The salary issue is accurate. And yet people quibble about management fees for the debtor?
Our brightest lost! We’re left with Brendy frank and their glorious legions. Time to pack unless there are changes. Get the finger out Michael!