Senator Lorraine Higgins (LAB) made quite an interesting statement to Seanad Eireann today, which appears to indicate some blatant lack of foresight at the National Asset Management Agency in respect of any restrictions NAMA places on its employees' private sector activities.
Here is the Seanad transcript of Senator Higgins's contribution (these things can take a while to appear on Oireachtas.ie). I suggest you read the transcript below in full to get a complete understanding of the Senator's concern. Unfortunately I didn't manage to capture Minister Noonan's response, which was not particularly illuminating anyway.
Although there is no legal barrier to repeating [H]'s name, I have decided to clip it out of the transcript. However, the property company that [H] has moved to, as well as the name of another individual who has been the subject of a court action are both left intact.
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Leas Cathaoirleach: I now call on Senator Lorraine Higgins to move your motion
Senator Higgins: Thank you a Leas Cathaoirleach. Minister I would like to thank you for taking this matter on the adjournment here this evening, relating to the need for you to outline the protocols, or contract stipulations, if any, that are in place to stop NAMA employees, or NAMA former employees, from moving into the private sector immediately following their employment with the agency.
This matter has come to national attention in recent times as a result of news emerging that a senior official at NAMA, who was responsible for managing some of its biggest and most indebted borrowers had taken a new job with a London based property investment firm just weeks after leaving his position with the agency. I feel to have a senior NAMA official ending up in a private property company raises serious questions about the judgement of the NAMA Board's policy in allowing this to happen in the first place. And I suppose it shows a potential disregard as well to the Irish taxpayers, for whom NAMA was set up in order to acquire the best returns on those assets transferred from Ireland's bad banks. These are the same bad banks that the Irish taxpayer bailed out.
The complex that is emerging here between the individual and the well-being of the Irish taxpayer and the state is that [H], as a Partner of Prime London Partners, brings a huge benefit to this firm. In his prior incarnation in NAMA, he would have had vast knowledge of those properties on the NAMA loan book, the valuation of those properties, and outstanding loans on them also. He would also know the 'best buy' so to speak. But he also brings with him a network of people within NAMA, with whom he has worked.
Many of my fears were confirmed by the Irish Times article of Friday May 3rd, 2013, where it was stated that a Senior Asset Recovery Manager, [H], who has just left NAMA to join a UK fund that wants to expand its Irish interest, and yet we as a State have no price on this - no contract stipulation, I understand - and no provision at all in any contractual arrangement between an employee and the employer, being NAMA. Minister, this latest scandal to envelop NAMA comes on the back of another employee, Enda Farrell, who forwarded 29 e-mails to his wife's email accound, and 15 e-mails to a property investment company, which were understood to contain details of every property owned by NAMA. Co-incidentally this property company then employed Mr. Farrell.
There's something wrong happening within this agency, and I think something has to be done now. These actions are having the potential to significantly undermine NAMA's ability to recover the optimum amount for their assets, and in turn, for the Irish tax-payer. More disturbingly, Minister, there has been an attempt by [H] to silence me on this issue, and to bully me into submission, in that on Monday --
Leas Cathaoirleach: Senator, you shouldn't name people in the house who are not here --
Senator Higgins: I won't name [H] again --
Leas Cathaoirleach: That's a bit cynical --
Senator Higgins: -- but he did try to bully me into submission. On Monday morning I discovered a message from him on my voicemail, where he called my office asking me to remove what he described as a highly offensive statement on my website, regarding my earlier submission on this issue to Seanad Eireann. He indicated that he would take legal action against me, given the insinuations I was making. I want to make it very clear. I am making absolutely no insinuation. I am merely trying to protect the Irish taxpayer from possible improper actions by former employees of NAMA.
Minister, I want to make it very clear that I accept people have a right to earn a livelihood, to move on, and to take up new employment elsewhere as they deem fit and as job opportunities arise. But, to allowed do this immediately with the kind of commercially sensitive information we speak of, or to use this information as a means of securing a position is quite simply beyond reproach. In all the cirumstances of this particular matter - and these are only two of which I know - I am now calling on you to ensure that there is an immediate review of all existing contracts for senior officials undertaken to ensure that employees are prohibited from taking up positions of employment in any property based company for a minimum of a year following their employment in NAMA, and that all employees of the agency sign confidentiality agreements.
It is common practice in most jobs and of this status and description that a non-compete and confidentiality clause would be inserted into a contract which would prohinit an employee for a period of time from taking up a similar post in a rival firm, or speaking of the information garnered in their prior position. All I am saying is that we do need, as a state, to protect the family silver of Ireland. We cannot have practices like this being facilitated by the State. And we need to put an end to it now. Thank you.
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It's worth noting that the Minister for Finance did respond by pointing out that NAMA employees are subject to a number of statutes in respect of maintaining confidentiality, namely s.14 of the National Treasury Management Agency Act (1990) which prohibits an employee from disclosing any information obtained while carrying out their duty as employees of NAMA.
The Minister added that NAMA employees are similarly bound by ss.99 and 202 of the NAMA Act (2009), as well as the Official Secrets Act, which binds the civil service to confidentiality more generally.
Nevertheless, that neither NAMA nor the NTMA considered it necessary to insert a non-compete clause (CNC) into well-paid senior management contracts is quite incredible.
It is true that these CNCs are often difficult to enforce in Ireland, but only when they are absolute in their restrictions [Net Affinity v. Conaghan [2011] IEHC].
A company, or an agency of Government, has a perfectly legitimate interest in protecting its commercially sensitive information - especially when that agency manages one of the largest property portfolios in the world, acquired at enormous cost and hardship to the Irish public.
This matter is probably the most serious dereliction of responsibility that has come to light in respect of NAMA.
I'm sure there is more to come.
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