Bankrupt Drumm still living high life
Ex-Anglo chief paid himself €9,000 per month, hearing told
Published 02/04/2011 | 05:00
DISGRACED former Anglo Irish Bank chief executive David Drumm continued to pay himself a $9,000 (€6,325) -a-month salary, stayed in high-class New York hotels, and loaned a brother thousands of dollars after filing for bankruptcy last year.
The banker also bought two luxury SUVs at a time when he claims to have been struggling for funds.
Details of Mr Drumm's spectacular spending spree emerged at a bankruptcy hearing in Boston yesterday. The hearing was told how Mr Drumm:
- Paid himself a $9,000 (€6,325)-a-month salary from his financial advisory business despite having just two customers.
- Last year made business trips to New York, staying in the Plaza Hotel, one of the most expensive in the city, at $939 (€659) per night.
- Also stayed in the Pierre Hotel in New York at a cost of $595 (€418) per night.
- Spent $69,000 (€48,500) on a Range Rover in 2009.
- Sold the SUV the following year for $49,000 (€34,500), only to buy a dearer model, costing $72,000 (€50,600).
- Made a $6,000 (€4,200) loan to a brother after he filed for bankruptcy.
Mr Drumm, who moved to the US after quitting Anglo shortly before the bank was nationalised in January 2009, has refused to return to Ireland to face garda questioning over his role in the bank's downfall.
Details of his spending emerged during questioning by lawyers for Anglo, who are opposing his discharge as a bankrupt.
Anglo is pursuing him for €8.5m it says he owes the bank.
When asked about why he sold the first Range Rover only to buy a more expensive model, he replied: "I wanted to get rid of it. It wasn't a good car. There were issues with it. I just didn't like it."
He declined to answer questions about his hotel stays.
And when asked how he could afford a $6,000 loan to a brother, he said: "My brother needed the money."
The hearing was told Mr Drumm dipped into the funds of his financial advisory firm, Delta Corporate Finance, to make the loan.
Mr Drumm bristled when asked if being a bankrupt debtor facing criminal investigation made it hard to get work as a financial adviser.
"If I wasn't being pursued by various lawsuits, I'd be doing better," he said.
The Dublin-born banker also admitted his wife Lorraine had never had bank accounts during their marriage until September 24, 2008, when he said the world began "falling apart".
In December 2008, Mr Drumm received a salary payment of €92,000, which went into an account held jointly by him and his wife. The same day, €180,000 went into an account solely held by Lorraine Drumm.
On December 15, 2008, a $372,000 (€261,000) deferred bonus from 2005 was paid into a joint Drumm account, and moved the same day into an account held only by Lorraine Drumm.
Mr Drumm said his wife made the transfers without orders from him.
Four days later, Mr Drumm resigned as chief executive of Anglo.
He denied the transfers were made to ensure little of the family's assets were held in his name only in advance of lawsuits by Anglo to reclaim debt.
Mr Drumm said he wasn't paying attention to the accounts, and didn't care about them at the time.
He said he made the family's financial decisions, but in 2008 his wife decided she wanted money of her own to control, so he helped her set up bank accounts in her name only.
The hearing was told Lorraine Drumm made a $250,000 (€175,700) loan to Drumm's business, Delta Corporate Finance, for working capital, and subsequent $10,000 (€7,030) loans. Less than $6,000 (€4,200) of that sum is left, Mr Drumm said.
Drumm acknowledged his business was losing money, but continued to pay himself $9,000 per month until this month.