BUSINESS OPINION: The ability of the agency to stand up to its political masters is open to question

HAS THE National Asset Management Agency got its mojo back? Just when it looked as though the State agency’s efforts to be all things to all men had led it to lose sight of what it was originally set up to do, it announces a couple of big moves.

In recent months the agency has seemed more interested in crowd pleasing than asset management.

It was more likely to be in the news for pursuing builders’ wives over their jewellery than selling assets.

Last week things seemed to have taken a turn for the better. There was the eye-catching sale of €800 million worth of loans associated with three of London’s most valuable hotels and the promise of more to come.

This is certainly a bit more like it, but, at the risk of being unduly critical, the question remains as to whether or not Nama has become too politicised and is swayed by short-term political pressures.

It does seem to be under a great deal of pressure to prove it is not being soft on developers. Last July the agency disclosed in some detail the approach it was taking towards the large developers that are its primary debtors.

The approach adopted is nuanced, but it involves a level of incentivisation for the developers that in certain circumstances will undoubtedly be open to a post-hoc characterisation of being a bailout.

In many cases the developers will be cleaned out and shut down. Such subtleties are hard to sell to a hostile public and reaction to Nama’s disclosure was not very positive. The politicians got stuck in and a blizzard of activity appeared to follow, with hardly a week passing that Nama did not seem to be taking a developer to court, selling their paintings, helping struggling first-time buyers and generally doing the sort of things politicians would like to see them doing.

Even last week’s sale of the Maybourne Hotel loans to the Barclay brothers smacked of tit-for-tat with Paddy McKillen, who got the better of the agency earlier this year and kept his loans out of the agency’s clutches. This cuts to the very heart of the matter. If you are the world’s largest property fund – as Nama are fond of pointing out they are – then you must act like the world’s largest property fund.

You cannot afford to be deflected by bad headlines on a daily basis.

Politicians behave this way because they live and die in the court of public public opinion. The short-termism that this breeds infects the institution which they preside over and the disease seems to have spread to Nama. There was always a risk this would happen. Nama’s sheer size and its entanglement with the Irish economy meant politicians were never going to sit back and let it do its job as it thought fit.

Indeed political oversight of such a massive commitment of taxpayers’ money is imperative.

The issue is one of balance. And given the way Nama seems to increasingly pander to public opinion the balance does not seem to be there.

What is not clear is whether the politicisation of Nama is overt or in effect some sort of self-censorship.

If Nama is playing to the gallery, is it because its political masters are telling it to, or is it simply trying to anticipate their wishes, which is quite often the case with the public service.

In either case the responsibility ultimately rests with the board of the organisation. Its directors are the people who set policy and are the buffer between the organisation and its political masters.

Led by Frank Daly, the former Revenue Commissioners chairman, and Brendan McDonagh, they comprise financial consultant Eilish Finan, former banker Michael Connolly, accountant Peter Stewart, insolvency specialist Brian McEnery, former county council manager Willie Soffe and Steven Seelig, a former adviser at the International Monetary Fund.

The directors of Nama are all fine upstanding people and to their credit took on their roles when there were not that many people putting their hands up. But we have arrived at a situation – with a few exceptions – where the world’s largest property company has a board made up of people no one has ever heard of.

The ability of the board to stand up to its political masters is open to question. The solution is to beef it up with some individuals of sufficient stature to ensure focus and face down political pressure from the Government if necessary.

That, unfortunately, does not seem very likely given the Government appoints the Nama board. If you were the Government why would you not want to tightly control Nama? After all you carry the can for its decisions.

It would be a very far-sighted Government indeed that took the view that if Nama focuses on popularity at the expense of doing deals the taxpayer will suffer.