The prosecution in the trial of two prominent businessmen has told a jury at Belfast Crown Court that one of the defendants, an advisor to NAMA, failed to disclose on a number of occasions he was also assisting an investment fund.
Frank Cushnahan, a business consultant and former member of the National Asset Management Agency Northern Ireland Advisory Committee (NIAC), is facing two fraud charges related to a £1.1 billion loan deal.
The 83-year-old, with an address at Alexandra Gate in Holywood in Co Down, is accused of failing to disclose information and making false representations.
The charges span a period from 1 April 2013 to 3 April 2014.
His co-accused, Ian Coulter of Templepatrick Road in Ballyclare in Co Antrim, is facing five charges.
The 54-year-old, a solicitor and former law firm managing partner, is charged of two counts of fraud by making false representations and a charge of making or supplying articles for use in fraud.
He is also charged with removing criminal property and transferring criminal property, namely money.
The charges span a period from 3 April 2014 to 11 September 2014.
The two defendants have pleaded not guilty to all the charges, which relate to the sale, over a decade ago, of a loan book of Northern Ireland properties held by NAMA.
NAMA set up in 2009 following banking crisis
The agency was set up by the Irish government in 2009 to deal with bad property loans after Ireland's banking crisis in 2008.
NAMA bought the bad loans from the banks at a steep discount and then sold them off to the highest bidder.
The Northern Ireland loan book involved loans bundled together into an enormous portfolio known as Project Eagle.
The debts, which were worth around £4 billion, were eventually sold to a US investment fund in 2014 for £1.1 billion.
As the prosecution continued its opening statement today, the jury of 12 jurors was presented with a range of correspondence, including emails, letters and the minutes of meetings.
Jonathan Kinnear KC took the jury through notes of a meeting in December 2012 between NIAC members, the NAMA chairman Frank Daly and the then Northern Ireland Minister for Finance Sammy Wilson.
He said what will not be found in the minutes is any mention of "the possibility that the whole of the Northern Ireland loan book could be sold in one piece", which he said was being planned by the two defendants and a third man, Tuvi Keinan from US law firm Brown Rudnick’s London office.
He said Mr Cushnahan, who was a member of NIAC, "hadn’t, we say, even alerted NAMA to that possibility".
Mr Kinnear said it is the prosecution’s case that there was "no legitimate reason" why Mr Cushnahan was keeping his involvement in the sale of the Northern Ireland portfolio "a secret".
"While he was keeping it to himself, we say, he was leveraging his position on the committee to help him get access to the politicians and effectively gather information and intelligence that might be useful in the sale process," he added.
Notes show no disclosures of interests made
The prosecution barrister also showed notes from two meetings of NIAC, which he said showed no disclosures of interests were made by Mr Cushnahan.
One of the meetings took place in the offices of Tughan's law firm in Belfast in April 2013.
Mr Kinnear claimed in court that Mr Cushnahan did not speak up to say he had been having conversations with his co-accused and Mr Keinan, that they were "actually looking at a deal to try and sell the whole of what this committee was set up to consider".
"The real detail of these documents is what's not said, almost more important than what is said," he added.
The Crown barrister also referred to documentation regarding a separate meeting of NIAC at a Co Louth hotel in July 2013.
Mr Kinnear said again there were no disclosures of conflict made "despite the fact Mr Cushnahan was deeply involved at this stage in the setting up and furthering" of a deal with US investment fund Pimco.
"He still made no declaration of interest and he kept all his involvement a secret, saying nothing about the project he had been working on," he said.
He said it is the prosecution’s case that there was "no legitimate reason" for doing so and he claimed Mr Cushnahan "knew there was a clear conflict of interest but he didn’t want to say because, at the end of the day, there was a massive fee for him providing on the deal going through".
Email exchange
The jury was also shown an email exchange, relating to issues raised by Mr Coulter over the value of the success fee.
In one document, a figure of €16 million was set out as the fee to be paid by Pimco on completion of the deal and which would be split equally between legal firm Brown Rudnick, Tughan's law firm and Mr Cushnahan.
In email correspondence between Brown Rudnick’s Tuvi Keinan and James Gilbert of Pimco, Mr Keinan said the figure was supposed to be £16 million, not €16 million.
Referring to Mr Coulter, he said: "I told him to take a view. He’s not happy."
Mr Gilbert replied and said: "Tell him he’s a greedy fker from me."
Among the other documents presented to the jury were concerns raised by Pimco executives over the success fee and if NAMA had been informed, particularly given the position of Mr Cushnahan.
The prosecution barrister told the jurors that evidence will show a Pimco employee had sought assurances that NAMA was "informed of the success fee and approved it, and the involvement of FC [Frank Cushnahan] in the transaction, and in particular that he helped facilitate the transaction, that he will be advising us in respect of the transaction and the fact that he will be paid a significant success fee in respect of the transaction."
Jonathan Kinnear KC said the reality is that "Mr Cushnahan should have declared his involvement long before all this".
He said the prosecution say the duty was on Mr Cushnahan to make a declaration of interest, not on Pimco.
Mr Kinnear alleged that Mr Cushnahan "made a conscious decision to keep it hidden despite his legal duty".
"He was acting fraudulent and dishonestly," he added.
The prosecution barrister claimed that "the whole idea for the sale" had come to Mr Cushnahan from accountant David Watters.
He said Mr Watters was "squeezed out completely" and got none of the success fee that eventually paid by the Cerberus investment fund for the Northern Ireland property portfolio.
"He got nothing, not a penny."
The trial is being heard at Belfast Crown Court, before Judge Madam Justice Denise McBride.
Twelve jurors, nine men and three women, were sworn in to hear the case, which is expected to take up to 12 weeks.
The trial continues tomorrow.
