Cerberus, Frank Cushnahan and Tughans: a rough guide to Project Eagle

What is Project Eagle?

Nama, the State's bad bank, took over property loans made by Irish banks in the North with a book value of more than €6 billion. In April 2014, it sold the lot of them in a single transaction, covering 860 properties, to Cerberus, a US company, for about €1.6 billion. The codename for the sale, within Nama, was Project Eagle.

Why is it the subject of an inquiry?

Questions arose when it emerged that Ian Coulter, managing partner of Tughans, a firm of Belfast solicitors which had worked for Cerberus, transferred £6 million in fees from the deal to an Isle of Man bank account, without his firm's knowledge. He resigned once it was discovered. Later, a former member of Nama's Northern Ireland advisory committee, Frank Cushnahan – who had been appointed to the committee on the recommendation of the DUP – was recorded by the BBC's Spotlight programme claiming that the £6 million was meant for him.

Cushnahan also suggested on Spotlight that he had used his influence with a former Nama executive called Ronnie Hanna to ensure the agency didn't appoint receivers to some Northern Ireland companies whose debts it took over in 2010 and 2011.

In a further investigation aired this week, Spotlight broadcast an audio recording of Cushnahan allegedly receiving £40,000 from a Nama borrower. Critics, including the Independents 4 Change TD Mick Wallace and the Sinn Féin finance spokesman Pearse Doherty, have claimed the sale process was flawed, potentially corrupted and should be the subject of a commission of inquiry. Wallace has claimed in the Dáil that some of the proceeds of the sale were to be diverted to Northern business and political figures. This, it has been suggested, is what the £6 million in the Tughans account was intended for.

Earlier this year, the Government asked for a report by the Comptroller and Auditor General (C&AG), the State's spending watchdog. That report is now with Minister for Finance Michael Noonan and is expected to be published in the coming weeks.

And what does Nama say?

Nama has consistently maintained there was no wrongdoing of any kind on its side of the deal. However, it has confirmed that it abandoned a bidding process with another US fund, Pimco, in 2014 when it discovered Pimco had agreed to pay £5 million (€6 million) each to Cushnahan, Tughans solicitors and a US law firm, Brown Rudnick.

Nama says that, once it learned this, it forced Pimco to drop its bid. However, Cerberus then hired Tughans and Brown Rudnick and went on to bid successfully for the portfolio.

Who is investigating all this?

The Northern Ireland Assembly, the UK's National Crime Agency and the C&AG. Opposition deputies have pushed for a commission of investigation, but Taoiseach Enda Kenny and Noonan have, so far, resisted. The Irish Times understands that the C&AG's report finds that irregularities in the sale process may have resulted in the price paid for Project Eagle being hundreds of millions less than it might have been. But you can't say for sure, of course.

So Nama lost hundreds of millions of euro of taxpayers’ money?

Not exactly. You can't prove the hypothetical and Nama is likely to contest the C&AG's findings. In fact, Nama's financial performance has been much better than expected – it is on target to return almost €2.5 billion profit to the taxpayer in the coming years. It was also praised in a European Commission report last week.

Where is this going now?

Towards an inquiry. The Government will find it difficult to hold the line against an inquiry once the C&AG's report is published. Independents in the Government may demand it; Fianna Fáil may demand it. A scoping exercise is likely to be the next step. Criminal inquiries in the North, meanwhile, continue.