Monday 24 October 2016

Destroyed lives are the real legacy of Anglo

Published 30/07/2016 | 02:30

THE truth is said to make for the best camouflage, because nobody ever quite seems to believe it. So much of what transpired between the walls of Anglo Irish Bank in the run-up to the crash barely seems credible, even after the longest criminal trial in our history. The facts have now been established, and yet the air of disbelief that such things could ever really have happened is still palpable.

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Former executives John Bowe and Willie McAteer, and the former chief executive of Irish Life and Permanent, Denis Casey, were found guilty of agreeing a scheme to mislead the public about the true health of the failing bank. But there is no sense of finality.

The legal system may have extracted a downpayment from justice on the enormous wrongs done during and after the crash in the financial world, but so many others who were intimately involved in wrongdoing on a breathtaking scale have escaped the arms of the law, and there are few who imagine any real possibility of closure.

Yet for being found to have conspired together and with others to mislead investors, depositors and lenders by setting up a €7.2bn circular transaction scheme between March and September 2008 to bolster Anglo's balance sheet, these three men have rightly been sent to prison.

Judge Martin Nolan branded their actions "dishonest, deceitful and corrupt". Some of the evidence was jaw-dropping. At one point during the trial, the jury heard about a September 2008 telephone call between John Bowe and the bank's then chief executive, David Drumm.

Mr Drumm said the "bigger picture" was that on September 30 "even with the six billion fixes which Mr f*****g Denis [Casey] confirmed for me this morning - we're f****d". Bowe replied: "We're still in a hole."

Mr Drumm also said to Bowe: "We have to get a get-out-of-jail card before December 3 - unless we can fix the poxy balance sheet over year end, which is next weekend, which to me just does not look do-able."

Such disconnection from the scale of what was taking place is chilling.

Their cavalier approach has to be seen in an overall context. The financial cost of the banking crisis has been put at more than €100 billion, according to the then Central Bank governor Patrick Honohan in 2015. The human cost for the hundreds of thousands driven out of the country - the destroyed lives, and futures wiped out - is incalculable. After the crash, the blameless were left to bear the brunt of the ruinous actions of the reckless.

Judge Martin Nolan also took the opportunity to strongly criticise Anglo's accountants at the time, Ernst & Young.

He said it beggared belief they had signed off on their interim accounts, published in December 2008, as "true and fair" if they knew the real situation. It was incomprehensible to him that they did not know the situation.

We are told Anglo went to inordinate lengths to appear strong when the edifice was crumbling. As senior counsel Paul O'Higgins put it: "They take a vast amount of time and trouble and they amount to one large candy floss, whose only conceivable purpose is to bolster up and artificially inflate the Anglo customer deposit. That is manifestly dishonest and was done with dishonest intent."

When those given the responsibility to lead in a time of crisis choose instead to mislead, disaster is never far away.

As the leadership guru Orrin Woodward once put it: "The new Golden Rule of Fractional Reserve Banking - he who creates the 'fool's gold' controls the fools." This case has shown us that there was too much fool's gold sloshing about at a catastrophic cost. Integrity and accountability must be the hallmark for banking.

Irish Independent

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