David Drumm's take on his demise is self-serving but he raises a valid question
Published 11/02/2016 | 02:30
David Drumm's return to Ireland now seems imminent. A snow storm in Boston prevented his court hearing on Monday, at which he was expected to end his attempts to prevent his extradition to Ireland.
The former Anglo Irish Bank chief executive has never really given his side of the story in relation to what happened in the banking collapse, other than through a series of interviews with 'The Sunday Business Post'. The first was in November 2011 and the most recent was last Sunday.
The version of reality he presents in those interviews is at best selective and at worst belonging to a different universe. The closest he comes to making a valid independently verifiable point is when he questions the level of transparency around how much Anglo Irish Bank actually lost, and whether things could have been handled differently.
One of his most bizarre comments is when he says he would have returned to Ireland "if the Irish government asked me to… they didn't ask. They didn't demand," he said.
Nowhere does Mr Drumm mention the Gardai - that investigative organisation which sought to interview him as far back as 2010. Mr Drumm continually refers to the "Irish government" as not asking him to return.
Ministers have been calling on him to return for years. Any formal procedure would have to be through the Gardai, by whom he refused to be interviewed.
He did not give evidence to the Nyberg Commission of Inquiry. He did not agree to come back to Ireland to be interviewed by the Gardai investigating various issues around the collapse of Anglo Irish Bank. He did not come back to give evidence to the Banking Inquiry, but instead wanted to engage with it through a video link.
As far back as 2010 officers from the Garda fraud squad had been in negotiations with his legal representatives about him making a statement. It was reported at the time, that he had even declined an offer to be interviewed by Gardai where they would travel to the US to speak to him.
In his first interview in 2011, when asked why he didn't come back to Ireland he said: "Why would I go somewhere which has stated, politicians, senior ministers and even High Court Judges have more or less stated that there is a witch hunt on and we are going to get him. Why would somebody put their family at risk by signing up for that?"
His recent change of mind in relation to coming back to Ireland has occurred only after he exhausted every other possible avenue of remaining in the US. The fact that he was refused bail meant that if he continued with his legal battle (and legal right) to challenge his extradition, he would have to prolong the case from within an American prison. He has already been behind bars for four months.
Mr Drumm also said he takes issue with being referred to as a "fugitive". He may be right here. The definition of a fugitive is someone who has escaped from captivity or is in hiding. He hasn't been in hiding and at the time he left, he wasn't escaping captivity.
It is also defined as someone who is "quick to disappear - fleeting". Refusing to be interviewed by Gardai prolonged their investigation and delayed the point in time where he was actively sought back by the authorities.
It took the authorities four years to complete their investigations before the DPP decided to pursue extradition proceedings on foot of 32 charges.
Mr Drumm does talk about the toll the whole thing has taken on his family and children in particular. Few will have sympathy for him on that but I believe him when he says his life in the US has not been easy. I also believe him when he says it probably would have been a lot more difficult, for him and his family, if they had stayed at home.
He may or may not get bail when he returns. That will be up to a judge to decide. It was never something the DPP was in a position to deliver as part of any arrangement brokered with Mr Drumm.
His comments are particularly interesting on his interpretation of what went wrong at Anglo. He is very much of the "Lehman's did for us" school of thought which was thrown around by bankers and Fianna Fáil ministers back in 2008. Yet every major investigation into the Irish banking crisis concludes it was home grown.
He says he is willing to accept responsibility for his failings but adds that "the role of the chief executive is to carry out the instructions of the board and I did my best in considerably difficult circumstances".
Contrast this perspective with evidence given by former Anglo Irish Bank non-executive board member Gary McGann to the Banking Inquiry. Asked where the buck stops ultimately for running a company, Mr McGann said "the buck stops with the CEO and ultimately, the board are responsible for the CEO's appointment".
Mr McGann said the board "set policy, set strategy and appoint a CEO to implement and deliver on it".
Mr Drumm has questioned the scale of the losses at Anglo Irish Bank, which have been reported at around €30bn. His maths is compellingly simple. Nama bought €34.1bn worth of Anglo loans for €13.4bn - a loss of €20bn. Where did the other €10bn come from?
The first thing that Nama did when it bought everybody's bank loans was write them down by another few billion as property values fell further. The second thing is that Anglo's loans were lumped in with Irish Nationwide in the newly-formed IBRC.
The third thing is that IBRC was liquidated as part of a deal brokered with Europe to restructure €30bn in Anglo promissory notes. Michael Noonan secured a repayment of this debt over a 15-year period that doesn't start until 2038, and at an interest rate of just 3pc.
This replaced the promissory notes that were repayable over a 7-8 year period at 8pc. IBRC inevitably became a forced seller in a liquidation scenario instead of the original plan to slowly wind down the bank by 2020.
IBRC's liquidators have sold €22bn of assets since 2013. The assets probably could have gone for more if IBRC had not been liquidated. But there were other exchequer savings to be had from the bonds deal.
It is widely believed that liquidating IBRC was sought in Europe but there is still inadequate disclosure around this issue.
Mr Drumm questions the financial madness of selling loans to Nama at a 60pc discount when no other country did this. Banks elsewhere retained the assets and were able to delay write downs for several years until things improved.
Perhaps if he had remained in Ireland he would have a better grasp of how bad things actually got at this time. Emergency liquidity assistance from the ECB to keep ATMs going peaked at over €130bn. The collapse of the banks - primarily Anglo - weighed down the ability of the country to survive on its own.
Transferring the bank's debts to citizens was a travesty the ECB made extremely difficult to avoid.
David Drumm inevitably has his own take on what happened and he is entitled to it. However, regardless of how self-serving much of it sounds, he does raise a valid point about how relatively little we seem to know about the specific decisions made within Nama and the liquidators of IBRC.
There is no external independent oversight of the merits of specific business decisions made by these entities which have literally billions in public money riding on their decisions.
Mr Drumm believes that the information will eventually come into the public domain. I doubt that very much.