Business Banking Inquiry

Monday 5 December 2016

Ex Taoiseach Cowen and former Anglo director Drury met before controversial Druid’s Glen outing

Clodagh Sheehy

Published 03/09/2015 | 14:05

Former taoiseach Brian Cowen's game and dinner with three Anglo Irish Bank figures two months before the bank guarantee has been the source of ongoing controversy
Former taoiseach Brian Cowen's game and dinner with three Anglo Irish Bank figures two months before the bank guarantee has been the source of ongoing controversy

Former Taoiseach Brian Cowen and former Anglo Irish bank chairman Sean Fitzpatrick met in the private home of ex Anglo non-executive director Fintan Drury immediately before their golf outing, it has emerged at the Banking Inquiry.

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It had previously been believed that this meeting was over coffee at the golf club before the game between Mr Cowen, Mr Fitzpatrick and Mr Drury.

Gary McGann, a former non-executive director of the Bank, who was also present at the meeting,  first told the Inquiry he did not think the location was “particularly relevant”.

Under persistent questioning by Deputy Kieran O’Donnell he then revealed that the meeting at between 9am and 9.30am on the morning of the golf outing at Druids Glen was in fact held in Mr Drury’s home.

Mr Drury was also a former non-executive director of the bank.

The controversial game took place in Druids Glen on July 23rd 2008 just months after a catastrophic collapse of Anglo Irish Bank shares.

Mr McGann said today that he had met with Mr Drury, Mr Cowen, Anglo chairman Sean Fitzpatrick and economist Alan Gray who was a director of the Central Bank before the golf game.

He insisted that the group had not discussed banking “because it wasn’t on the agenda”.  The discussion was a general one about the economy.

He said the group had met again for dinner in the golf club restaurant that evening where again there was a general social discussion about the economy.

Mr McGann confirmed he had spent about four to four and a half hours in Mr Cowen’s company that day and  to his recollection there was no mention of banking.

Mr Cowen played with Mr Fitzpatrick and his long term friend Fintan Drury, a former Anglo director. Later the trio joined Alan Gray, a director of the Central Bank , Mr McGann and Mr Cowen’s driver for dinner at the golf club.

Mr Cowen has previously told the Banking Inquiry the discussions that day did not relate to Anglo Irish Bank.

 

Mr Cowen said he had asked Fintan Drury to get some people together to discuss the economy which was clearly slowing down and there had been no discussion during the entire day about banking.

Former Taoiseach Brian Cowen and Anglo Irish bank chairman Sean Fitzpatrick met in the private home of Anglo non-executive director Fintan Drury before their infamous golf outing,  it has emerged at the Banking Inquiry.

It had previously been believed that this meeting was over coffee at the golf club before the game between Mr Cowen, Mr Fitzpatrick and Mr Drury.

Gary McGann, a former non-executive director of the Bank, who was also present at the meeting,  first told the Inquiry he did not think the location was “particularly relevant”.

Under persistent questioning by Deputy Kieran O’Donnell he then revealed that the meeting at between 9am and 9.30am on the morning of the golf outing at Druids Glen was in fact held in Mr Drury’s home.

Mr Drury is  also a former non-executive director of the bank.

The controversial game took place in Druids Glen on July 23rd 2008 just months after a catastrophic collapse of Anglo Irish Bank shares.

Mr McGann said today that he had met with Mr Drury, Mr Cowen, Anglo chairman Sean Fitzpatrick and economist Alan Gray who was a director of the Central Bank before the golf game.

He insisted that the group had not discussed banking “because it wasn’t on the agenda”.  The discussion was a general one about the economy.

He said the group had met again for dinner in the golf club restaurant that evening where again there was a general social discussion about the economy.

Mr McGann confirmed he had spent about four to four and a half hours in Mr Cowen’s company that day and  to his recollection there was no mention of banking.

Mr Cowen played with Mr Fitzpatrick and his long term friend Fintan Drury, a former Anglo director. Later the trio joined Alan Gray, a director of the Central Bank , Mr McGann and Mr Cowen’s driver for dinner at the golf club.

Mr Cowen has previously told the Banking Inquiry the discussions that day did not relate to Anglo Irish Bank.

Mr Cowen said he had asked Fintan Drury to get some people together to discuss the economy which was clearly slowing down and there had been no discussion during the entire day about banking.

Earlier, the former Director of Corporate and Retail Treasury, Peter Fitzgerald, has told the banking inquiry that in hindsight the business model of Anglo Irish Bank contributed to its downfall.

It meant that when global liquidity became a problem the underlying structure of Anglo “compounded the stress to a much higher degree” than for other banks.

He described how the collapse of Lehman Brothers on September 15th 2008 was the third of three major events which weakened customer confidence in Anglo - the collapse of Northern Rock Bank, then the Anglo share price and finally the collapse of Lehman.

Anglo had been lauded by the markets as a highly profitable business model with a spectacular balance sheet growth and put forward as an example to competitors.

“It was difficult to perceive that everyone internally and externally could be so wrong”.

The collapse of the Anglo share price in March of 2008 meant the bank ran the very real risk of branches around the country not being able to deal with calls from customers who wanted to close their accounts.

The Lehman’s collapse in September of that year was “an incredibly stressful time for Retail Deposit Customers in particular, many of whom still had all of their savings with the Bank”.

He said it “brought a new level of uncertainty for the staff and management of the Bank and with the share price now below 30c I believe most of the senior staff honestly felt the Bank would not recover.”

The announcement of  the Bank Guarantee led to a “palpable” relief for management staff and customers and an inflow of deposits in all of the funding operations of the Bank.

Mr Fitzgerald  was critical of the Financial Regulator and said the office of Financial Regulation “did not seem to have appreciated the growing funding risks in the Bank  in 2008 until right up to the point that the guarantee was warranted.”

This was despite detailed information being sent to it daily by the risk function of Anglo throughout most of 2008.

He believed that the “inherent weaknesses” in the Anglo model “ultimately contributed to the collapse and nationalisation of the Bank in 2009.

He fully accepted responsibility for his part in that failure and its consequences on the Irish State.

“It is something that I will always regret”, he added.

Asked by Deputy Kieran O'Donnell when he first became aware of Mr Sean Quinn's Contracts for Difference and Anglo Irish bank, Mr Fitzgerald sought a short adjournment so he could consult his own legal team.

He said he was concerned he might say something today that might be prejudicial in six months time.

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