Putting the cart before the horse – Minister Noonan recruits a NAMA advisory board

“As NAMA has completed its loan acquisition phase and is now concentrating fully on the active management of the assets under its care, the NAMA board, with my agreement, asked Michael Geoghegan, a former CEO of HSBC, to review NAMA and report his findings to me. His report was generally positive but arising from it, I am establishing an advisory group to advise me on NAMA’s strategy and its capacity to deliver on that strategy through property disposal and the ongoing management of assets. In making appointments to the NAMA board, the advisory group will help me identify candidates with entrepreneurial and property skills. Recommendations will also be provided by the group on strategies for NAMA to attract international capital to Ireland and to provide advice in respect of lessons to be learned from asset management agencies in other countries. I will issue a direction order to NAMA under section 14 of the National Asset Management Agency Act 2009 setting out the work of the advisory group and requiring NAMA to facilitate its operation” Minister for Finance Michael Noonan announcing a NAMA advisory board during his Budget 2012 speech in the Dail on 6th December, 2011

Minister for Finance Michael Noonan is a great man for appointing people to roles which have yet to be defined. Last July 2011, he made appointments to the newly-created Irish Fiscal Council. Professor John McHale from Galway University, Professor Alan Barrett of the ESRI, Dr Donal O’Donovan lately of Limerick University but formerly of the IMF and a couple of others were all appointed to the Council which was created just in time to beat an IMF deadline. Seven months later, the Council has issued one economic report which proposed a €4bn+  budget adjustment in 2012 and which Minister Noonan ignored. The Council has also issued a report into its own mandate. The Council is still waiting to be put on a proper legislative basis with the passing of the Fiscal Responsibility Bill but alas, they may be waiting some time yet as the Bill is not due to become law until after Q2,2012. I think it can be agreed the Council has not gotten off to the best of starts, though that is not at all the fault of the Council members.

In his Budget 2012 announcements on 6th December 2012, Minister Noonan announced the creation of a new advisory board for NAMA. This came in the wake of a review of sorts of NAMA by former HSBC boss Michael Geoghegan. Over two months later, we are still waiting for the Direction. By the way a “Direction” in the context of NAMA means an order from the Minister of Finance pursuant to section 14 of the NAMA Act. Minister Noonan and his predecessor, the late Brian Lenihan have issued a total of three Directions and which are set out at the back of the quarterly NAMA management report. Whenever the Minister for Finance issues a Direction, it is to be simultaneously published.

But the absence of a Direction doesn’t seem to have stopped Minister Noonan from appointing people to a NAMA advisory board, if you believe the report by Maeve Dineen in today’s Irish Independent in which she claims Gerry Murphy, Denis Rooney and Michael Geoghegan have been appointed. She doesn’t cite sources and the Department of Finance appears not to have issued a statement, but hopefully she’s not just making it up in the same way she makes up NAMA’s Brendan McDonagh as being a former HSBC director – different Brendan McDonagh, Maeve!

Gerry Murphy has his fingers in a number of pies including media, DIY and tobacco companies. But he might be best known on here for his role as a director of Blackstone, the US financial conglomerate which has said some pretty unpleasant things about economically-crippled Europe. Always with one eye on the Northern Ireland dimension to NAMA, the Dublin government has apparently appointed Denis Rooney  to the board and its final member is Michael Geoghegan who has spent his career at HSBC.

So now we have NAMA which has a 9-member board which includes a former IMFer, Steven Seeling, which includes Michel Noonan’s director of elections in Limerick, insolvency expert Brian McEnery. We have a number of NAMA committees which include external members. We have the 700-strong Department of Finance, which has staff largely devoted to NAMA. We have the NTMA whose boss, John Corrigan is a NAMA board member. We have two Oireachtas committees which oversee NAMA. And now we will have an advisory board.  You can’t help but be impressed by the bureaucracy of it all. What we don’t have is a Direction which might shed light on the role of the board and how NAMA will interact with it. Nor do we know if the advisory board’s role will interfere with the NAMA scheme as approved by the European Commission. Let’s hope that the advisory board isn’t still floundering about in seven months time in search of a defined role.