Business

Monday 5 December 2016

Changing tune: Drumm and his long journey home

The family life of the former Anglo boss was shattered when he was arrested at his home near Boston and held in jail prior to extradition proceedings. This week, he resolved to return to Ireland and ­defend charges against him.

Published 14/02/2016 | 02:30

David Drumm, the former Anglo Irish Bank chief, outside court in Boston.
David Drumm, the former Anglo Irish Bank chief, outside court in Boston.
David Drumm with his wife, Lorraine, outside the US Bankruptcy Court.

It must have been a bleak few weeks for David Drumm as he languished in Plymouth County Jail south of Boston. Locked in his prison cell, the Dubliner was waiting to contest his extradition to Ireland, where he faces 33 charges relating to his tenure at Anglo Irish Bank.

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Many of those familiar with the prison, which houses over 1,000 inmates, do not dispute the description by David Drumm's lawyer of a jail regime that is "unrelentingly harsh".

While incarcerated in the jail, Drumm has had to wear a jumpsuit-style prison uniform. He would have spent long periods in his cell, and there is only a small concrete-enclosed recreation area where prisoners can walk for a short time.

Jim Pingeon from the local non-profit group Prisoners' Legal Service tells Review: "The prison has an atmosphere that is down and depressing. It has a darker and more claustrophobic feeling than most prisons."

Drumm has only been allowed two 30-minute visits per week. His wife Lorraine, family and friends would have had to join rows of visitors, meeting him contactlessly across a glass divide - and only able to talk using a phone device.

Although Drumm has not been convicted of any offence, and was incarcerated prior to an extradition hearing, originally scheduled for March 1, he would not have been treated any differently to the convicts, according to James Pingeon.

"Usually, they would have the same kind of cells and food. The only difference is that he might have a different coloured uniform."

Faced with the daily grind of American prison life, it was hardly surprising that Drumm announced this week that he was throwing in the towel in contesting his extradition to Ireland.

It was always likely that if Drumm returned to Ireland to face charges related to Anglo that he would seek bail in the run up to his trial.

Under the Irish judicial regime, he would have a better chance of success than if he was fighting extradition in the US.

Larry Donnelly, an NUI Galway law lecturer from Boston, is not surprised at all that Drumm resolved to return home.

"The law made it clear that he had no chance of getting bail in the US. He had even less chance of prevailing if there was an extradition hearing. The advantage would be very much with the US Attorneys' office."

"The extradition is as diplomatic as much as a legal process and it would have been vetted at every stage in the State department."

Since his arrival in the United States in 2009 following the collapse of Anglo Irish Bank, Drumm has shown considerable ingenuity in keeping his head above water.

Married to Lorraine, with two daughters, up until his arrest he was still living in a $2m mansion in the upmarket town of Wellesley, and holding down a job as a chief investment officer at an asset management firm in New York. The family remains in the house.

In a letter to the judge in a US bail hearing, his employer (whose name was redacted) said Drumm occupied a "critical position in the business" which requires a high level of respect, confidence and trust. He was said to work on complex and time-consuming deals.

Pleading unsuccessfully with the judge for bail for her husband, Lorraine said: "Through his salary, we pay the mortgage, utilities, school tuition, food and clothing. I honestly don't know what we will do if David is unable to work to support us."

After they arrived in Wellesley, the Drumms enrolled their two daughters at Newton Country Day School. The Catholic school run by the Sacred Heart Order was last year ranked as the ninth most expensive private school in America, with annual fees of $44,000.

The comfortable middle-class life in Wellesley was shattered on October 10 when Drumm was arrested by US marshals at home in the presence of his family. It was the Saturday of a bank holiday weekend, and Drumm has been locked up in cells in four different locations since.

Since his imprisonment awaiting extradition, his lawyers have argued that there were risks to his personal safety in jail.

It is all a far cry from his heyday in Ireland, where he was a business titan as chief executive of Anglo Irish Bank. In 2006, not long after he took over as CEO, Anglo was named by consultants Wyman as the best performing bank in the world. At one stage, Drumm's total pay packet was over €3m a year.

One striking feature of Drumm's case is the sterling support that he has received from his family and friends.

Since his arrest they have gone out of their way to try to help him secure bail. Before Christmas, his wife, his mother Mary, his brothers and sisters, as well as local priests, wrote to the judge on his behalf seeking his release.

In a handwritten note to the judge, his mother said: "He has been my rock all his working life, in all my good and bad days".

Mrs Drumm, who raised eight children on her own after her husband died of cancer, added in her letter: "Your compassion in David's case will be in my prayers forever."

In another letter to the judge, Drumm's wife Lorraine said she was positive that Drumm would never flee if he was given bail.

"David loves the girls and me too much to ever leave us. And since I have offered to put up our home as collateral, and have offered to turn over my and my daughters' passports, if David left there would be devastating consequences - we would be homeless, penniless and unable to travel. He would absolutely never do that to us."

A local church also provided a reference at the bail hearing, stating the Drumms have made "a valuable contribution to this faith community".

The Drumms were said to prepare and distribute baskets of food to the homeless in the locality of Wellesley every Thanksgiving and Christmas.

While the glowing descriptions of Drumm by his family and friends are no doubt genuine, they are at times at odds with descriptions of the banker elsewhere. In November, a US bankruptcy judge rejected an appeal by Drumm and insisted he is personally liable for €10.5m of debts to IBRC (formerly Anglo).

The judge said Drumm had been fraudulent and his excuses that he could not remember key details about his personal finances amounted to 'misdirection and dishonesty'.

Drumm has probably been chastened by his prison experience, and his difficulties since the collapse of Anglo.

In his interview with the Sunday Business Post this week, Drumm insisted that he had never fled Ireland after the bank's collapse, and fervently denied that he was a "fugitive".

Drumm portrays himself as a scapegoat for all the economic difficulties Ireland has experienced.

When the banking scene went pear-shaped in the late Noughties, it was not surprising that Drumm would seek to revive his prospects in America, where he had been an outstanding success earlier in his career. As a young Anglo executive in the 1990s, Drumm had set up an operation in Boston, and lived there with his wife and daughters. On his first outing he was credited with building Anglo's US operation from a suitcase to a €4.3bn business.

By the time it all went belly up, Drumm had already focussed on America again and bought a luxurious mansion with a swimming pool on Cape Cod overlooking Nantucket Sound in March 2008.

It was a palace befitting Ireland's highest-earning banker, and when the great bust got worse, the family moved lock, stock and barrel to the US in 2009.

David Drumm moved on to Wellesley, and tried to carve out a new life. Inevitably, the past has caught up with him and this week he said he wanted to return home to mount a defence to the charges levelled against him.

Banker's timeline

1997

Dubliner David Drumm sent to the US at the age of 30 to set up operations for Anglo Irish Bank.

2005

Drumm appointed chief executive of Anglo Irish Bank.

2008

September: Finance Minister Brian Lenihan introduces bank guarantee, mainly to stop the run on Anglo.

December: Drumm quits as CE0.

2009

June: Drumm and his family move to the US, staying initially at a home in Cape Cod before buying a house in Wellesley.

2010

October: Drumm files for Chapter 7 bankruptcy in Boston.

2011

August: Anglo Irish Bank file a legal action against Drumm, claiming he should not be entitled to discharge from bankruptcy.

2015

January: Drumm denied a write-off of more than €10m in debts after the judge found him "not remotely credible".

October: Drumm arrested as Irish State seeks his extradition to face charges related to Anglo.

2016

February: The former banker says he will return to defend charges.

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