MacBride laws repealed to allow investment in Nama

Posted By: August 04, 2015

 BRENDAN HUGHES. Irish News.( Belfast) Tuesday,August 4, 2015

A US state repealed anti-sectarianism laws on trading with Northern Ireland over a bid to invest in the north’s Nama portfolio at the centre of a major financial scandal. Florida removed parts of the MacBride principles – fair employment laws regarded as a cornerstone in preventing workplace religious discrimination in the north. Documents sent to The Irish News reveal the laws were viewed as hindering a bid to invest in Northern Ireland property assets owned by Nama. The portfolio, which was sold last year for £1.3bn to a US investment firm, is at the centre of sensational claims that have rocked Stormont. A criminal investigation was launched last month after it was alleged in the Dáil by TD Mick Wallace that a northern politician was to personally benefit from the property deal. Irish-American campaigners have called for the MacBride principles to be reinstated, warning that their repeal could be seen as “anti-Irish and anti-Catholic”. Launched in 1984 and brought into wider US law in 1998 under president Bill Clinton, the MacBride principles act as a corporate code of conduct for US companies doing business in Northern Ireland. President of the Washington-based Irish National Caucus Fr Sean McManus, who campaigned for their introduction, said Irish Americans have been “deeply shocked” by the decision. “Florida’s action has shocked and outraged Irish Americans who regard the MacBride principles as sacrosanct and as the most effective campaign against anti-Catholic discrimination in Northern Ireland,” he said. “Repealing MacBride, passed in 1988 to ensure that Florida dollars would not subsidise anti-Catholic discrimination in Northern Ireland, will inevitably be seen as anti-Irish and anti-Catholic.” Nama (National Asset Management Agency) was set up by the Republic’s government to clear property loans from bailed-out lenders. It sold its northern property loan portfolio to Cerberus in April last year for £1.3bn – the biggest ever property deal in the north’s history. Florida’s State Board of Administration (SBA) was approached in the same month by a private capital investment manager about the deal. Documents show the SBA described MacBride as having a “negative impact on SBA investment activity”. “These requirements prevented the SBA from investing in an attractive real estate credit portfolio consisting of distressed mortgage loans by several banks operating in Northern Ireland,” it said. The SBA said it had to pull out of investing after it was unable to secure a list of borrowers to screen for compliance with MacBride. “Due to the politically sensitive nature of the volume and characteristics of the loans being sold and a confidentiality agreement with the seller, the investment manager was unable to release the borrower names to the SBA,” it said. The case was given as an example of investment issues due to MacBride in a paper compiled as part of proposals to repeal of parts of the legislation. It added: “Historically, these due diligence and compliance requirements have caused extended legal contracting, inefficient decision making by external investment managers, and increased cost, with no corresponding benefit to SBA investments over recent years.” Parts of the MacBride principles were later repealed in June this year, mainly requirements for researching potential investments and financial institution reporting. Fr McManus said the principles, named after Nobel Peace Prize recipient Seán MacBride, were adopted in 18 US states and have only previously been repealed by Nebraska. He called on political leaders in Florida to reinstate MacBride. “We must not allow it to stand. MacBride must be reinstated. This is a matter of justice and of Irish-American honor and fidelity,” he said. The SBA is a Florida state body aimed at providing investment services to various state and local entities. It said the repeal was addressed through a legislative process that included five public meetings over several months. A spokesman said the repeal did not rest solely on the abandoned Nama investment bid. “That particular investment opportunity was used as an example to illustrate our inability to do research to identify potential future investments,” he said. “Support of the MacBride principles will continue to be a formal part of our proxy voting guidelines and we will continue to support them using these means.” The spokesman said the SBA manages the assets of 37 funds for the state of Florida and local governments. “The original statute related to the MacBride Principles that was repealed only applied to one of the funds we manage,” he said. “Trust funds managed by other state agencies also were never impacted by the original statute or repeal.”