NAMA: Potential for corruption

During a discussion on NAMA today on RTE news (1st report, 1st item) there was a very interesting exchange between RTEs Business Editor, David Murphy and former Bank of Ireland chief executive Mike Soden on the possibility of corruption entering into the process.

David Murphy:

In this whole process as NAMA begins to try and run these loans as they’ve been acquired it’s fairly clear that there is latitude for corruption unless there’s significant measures in there to stop it…

…if you have corrupt individuals there at the helm within NAMA or elsewhere they are in a very, very powerful position and they are going to be making significant deals with significant investors…

…So there is going to be an issue there and it’s really important they make sure that part of the legislation is watertight.

Mike Soden:

One of the things that I’ve suggested a couple of times is that everything discussed between NAMA, the Government, the bankers and the developers should be done under oath.

The consequences of that is if you commit perjury there’s an automatic jail sentence and until we get some teeth into the legislation we are not going to get the results we want.

You’re saying (assuming) – ‘Everybody will behave as good boys’, well I don’t believe it and I think we have to make sure that they do behave.

But if the NAMA officials and experts are doing the valuations what then is the big risk?

Murphy:

One of the risks is that you’re in a situation where NAMA is going to take over an awful lot of properties and obviously there’s going to be latitude for people who want to buy those sites at certain prices to try to bribe public officials…

…Obviously we’re talking about buying an enormous amount of property in what is a falling market. If that market rebounds that property could be very valuable.

Our history as a country isn’t exactly squeaky clean when it comes to corruption both at government and builder levels.

Soden’s comment about automatic jail sentences for perjury is hilarious.

We have witnessed numerous politicians, businessmen and government officials lie through their teeth under oath at tribunals and other investigations. Not a single one has ever been charged never mind actually jailed.

It is only ordinary citizens who end up in jail for perjury, politicians, property developers and bankers are obviously exempt.

Provision has been made in the legislation that makes it illegal for interested parties to lobby politicians but it is an absolute certainty, given the rampant level of corruption in Ireland. that this law will also be ignored.