NAMA is a scandal; North and South!
The recent BBC NI documentary on the sale of a huge swathe of NAMA owned property in the North confirmed the scale of corruption involved in the after-effects of Ireland’s property bubble crash. It also highlighted the rich pickings that a class of well-connected politicians, legal firms and property industry insiders are making from that crash.
Independent TD Mick Wallace had already unveiled much of the documentary’s core information: a sweetheart deal that handed a giant US equity fund a massive loan book of properties held by NAMA. Cerberus buys the loan book at a fraction of the original costs, then sells on (often back to the original property developers) again for a larger fraction of the original loans price, netting a huge profit on the backs of the Irish state and its workers
One estimate is that the US fund Cerberus has acquired over €20 billion in property debt and is raking a profit that equates to a 18% return annually, a huge and lucrative profit margin. As well as securing a huge property portfolio in the North, Cerberus recently got an equally impressive one South of the border.
This was despite being investigated amid allegations of bunging politicians and NAMA officers millions. The outfit is famous for its creativity in avoiding tax but Ireland’s lax tax regime is in fact advertised openly when the state is trying to encourage such firms to “invest” here.
While many commentators and NAMA press spokespersons have been keen to suggest this corruption is a northern problem which has nothing to do with the agency, the Spotlight documentary highlights the fact that corruption has been at the very heart of the entire NAMA operation since its birth.
The agency owned thousands of housing units and property sites that could have ended the housing nightmare facing over 100,000 families. Instead its remit was to reflate the property bubble as quickly as possible and attract vulture funds from around the globe to pick up bargains.
NAMA has systematically gone about selling prime sites and units at secret knock down prices to both global and home-grown property companies. Often former NAMA officials have set up new companies such as Hibernia REIT (Real Estate Investment Trust) and used their contacts to target prime sites and properties around the country.
NAMA have in fact worsened the housing crisis. They have even made funding available for previously bankrupted developers but only in cases where the development is at the high end of the market such as the houses now selling for over €1.5million at Thormanby Hall in Howth or new luxury apartments at John Rogerson’s Quay
While NAMA claims all sales are done via the open market and competitive bidding, the same faces and real estate companies lurk at the back of each deal; Savills, Lindsey, DNG etc. etc.
There is an incestuous relationship between these firms and many now involved in luring the global hedge and vulture funds to Ireland. Far from tax avoidance been an unseen outcome, it was explicit in Minister Noonan’s attempt to get global investment firms here; that’s why he changed the law to allow new corporate landlords known as REITs to operate with the explicit remit that they would not face any tax on their profits.
It is likely the new Government will continue to cravenly hand over NAMA assets to similar vulture funds while the housing crisis worsens. A new movement that takes inspiration from the water protests needs to demand real action and target NAMA properties directly to insure they are used to house people and not further the profits of global real estate firms and vulture funds.