Cushnahan was surreptitiously recorded by a major Nama debtor who captured a 90-minute conversation laced with expletives, references to the most senior politicians in Belfast and Dublin, and confidential internal Nama information.
As the prosecution opening in the Nama trial continued at Belfast Crown Court, the jury were told of the secret audio of former banker Frank Cushnahan.
Francis Hugh Cushnahan (83), of Alexandra Gate in Holywood, is charged with fraud by failing to disclose information, and fraud by false representation.
Both men have pleaded not guilty to all charges
Former solicitor Ian George Coulter (54), of Templepatrick Road in Ballyclare, faces two charges of fraud by false representation, a charge of making or supplying articles use in fraud, a charge of removing criminal property, a charge of transferring criminal property.
Coulter had been the head of major Belfast law firm Tughans. Both men have pleaded not guilty to all charges.
In the meeting, held in Cushnahan’s office in Tughans’ building, Cushnahan was recorded whispering: “I’m heavily involved — and it’s taken over — in the acquisition of the Northern Ireland and GB portfolio from Nama… upstairs, me and he… if I could f**king find the thing, I’ll show you the minutes.”
The transcript recorded Cushnahan saying: “To get engaged I had to get the First Minister, because [Michael] Noonan would not accept, right… and Robinson, I said: ‘You get involved in this, and it comes out then Pete, a bit of money for you.’”
Prosecution barrister Jonathan Kinnear said he believed that was a reference to Peter Robinson – but told the jury there’s “not a shred of evidence” the former DUP leader received a penny.
He told them Cushnahan had “the ability to embellish what he’s saying” but that the central element of what he said about his own role in the deal was true.
Ian Coulter leaving Belfast Crown Court. Photo: PA
Cushnahan said: “Now, I brought Pimco – they’re massive – over to meet the First Minister, the Finance Minister Wilson, the new Finance Minister [Simon] Hamilton… in order that – wait for it – the book could be bought at a discount.”
He said the Irish finance minister and taoiseach were approached by Mr Robinson.
He said the deal “had to be constructed that I would be at arm’s length”.
Mr Kinnear said that meant he wanted it to seem like he wasn’t involved, when he was in fact central to events.
Continuing to read sections of the transcript, he told them that Cushnahan said: “By the way, who’s going to be chairman of the new entity… why have I resigned all the boards… on the basis that I have to be out of Nama…”
He said the first minister would recommend him to be chairman of what appears to be a new entity to help manage the loans for Pimco.
When I leave in a year’s time, I pick up maybe about two million quid
Cushnahan went on: “Because how do I get paid? I cannot take any money, you agree with that. This is what I’m going to do. I’m going to put option [a legal arrangement]. I have been persuaded to look into this. But at my age and my ill health, there’s no point in me f**king sitting doing this, right, unless I have some equity, and the equity is an introduction fee…”
He added: “Well, I know this is wrong to say this, but when I leave in a year’s time, I’ll put my put options. I pick up maybe about two million quid.”
Mr Kinnear took the jury to the minutes of a meeting of Nama’s NI Advisory Committee (NIAC), on which Cushnahan sat, in October 2013.
The meeting involved no declaration of interest by Cushnahan, even though the sale of the loans was discussed with Nama’s chairman, who “reminded members that this matter was extremely politically sensitive and that absolute confidentiality was required”.
Mr Kinnear said: “Here the committee is specifically discussing the sale of the NI loan book… What Mr Cushnahan doesn’t say is that: ‘Now you come to mention this deal, and mention Pimco… I’ve actually been helping them and they’re going to pay me £5m if the transaction goes through’.”
Answering his own question, he said: “He wasn’t doing that, because he knew what he was doing was improper, and if he did disclose his interest, there was a chance the whole deal would be scuppered and he would lose that huge success fee that he was hoping for.”
On November 7, 2013, Cushnahan resigned from NIAC. He told Nama that “family priorities represent my principal reason… and not least I am not getting any younger”. Mr Kinnear said that was “just a cover story”.
By March 2014, as the deal neared conclusion, Nama was informed for the first time of Cushnahan’s role.
Mr Kinnear said that, within days, “this kills the deal stone dead… this is the bombshell”.
Mr Kinnear said it might seem to them that for Cushnahan this was a bit like losing the lottery, “but there was a new lottery ticket to be purchased”.
A handwritten note setting out the plan said there would be £10m for Coulter
Two days later, Cerberus, another huge US fund, entered the picture.
Lawyers Brown Rudnick, who’d been working on the deal with Cushnahan and Coulter, now asked for a success fee of £15m. But Mr Kinnear said there was “a charade” that Cushnahan was no longer to get money.
A handwritten note setting out the plan started by saying “Frank will be knighted” and that there would be £10m for Coulter.
The barrister said there was to be “a false front” where Coulter funnelled money to Cushnahan.
He said it wasn’t credible that Coulter’s payment had suddenly doubled, with nothing going to Cushnahan.
Mr Kinnear said Coulter then put in place a “complex and dishonest scheme” to disguise where the money was going.
On April 2, 2014, Coulter asked Tughans’ IT manager to delete all emails that had the words Tuvi Keinan, Pimco and James Gilbert from its systems. Mr Kinnear said this was Coulter “covering his tracks” and there was “no legitimate reason” for what he’d done.
In early April, Nama asked Cerberus for clarity that no current or former member of NIAC were getting paid in connection with the deal. On April 3, Coulter confirmed those terms.
Mr Kinnear said: “That’s an unequivocal statement… no one else is going to get paid a success fee, including Mr Cushnahan.”
Effectively this is an agreement between Mr Coulter and Mr Coulter
But Mr Kinnear said that Coulter “always intended to pay Mr Cushnahan using a clandestine method”. He said that, even before the deal was done, Coulter had taken control of an ‘off the shelf’ Isle of Man company, Morley Enterprises Ltd.
In registering to buy it, Coulter gave the email address of his wife, Vicky Dummigan. Mr Kinnear said: “He’s chosen, for reasons that we submit are subterfuge, his wife’s email address.”
Coulter said his occupation was “business advisor” even though his main job was managing partner of Tughans.
He then allegedly used PCS Nominee Ltd, an Isle of Man company, to hide that he owned Morley. A legal document showed that while PCS held all the shares of Morley, they were held in trust for Coulter.
Another person then signed an agreement between Morley and Tughans, with Coulter signing for Tughans.
Mr Kinnear said: “Effectively this is an agreement between Mr Coulter and Mr Coulter… This whole document is a complete sham.”
The trial continues.
source