Thursday 18 January 2018

Patrick Honohan: 'No smoking gun in Anglo Tapes'

Patrick Honohan, Governor of the Central Bank
Patrick Honohan, Governor of the Central Bank

Lyndsey Telford

The Governor of the Central Bank has insisted there is no smoking gun in controversial taped conversations of former Anglo Irish Bank executives to suggest criminality.

Patrick Honohan said the leaked recordings, which involved senior figures at the toxic lender as they prepared to secure an initial bailout, did not contain enough evidence for prosecutions.

"We have an obligation to inform the relevant authorities of a suspected criminal offence and apparently, because there is nothing more really than the telephone conversations, it's not a sufficient evidential basis on which to ground a suspicion of a criminal offence," Mr Honohan said.

The Central Bank announced yesterday that it would not be sending any more files to the Garda fraud squad on suspected criminality at the now-defunct rogue lender.

The leaked recordings, known as the Anglo Tapes, indicated senior Anglo bankers planned to seek an initial seven billion euro bailout.

The tapes suggested that the pot of money was enough to worry the regulator into acting but small enough to make sure it would not be allowed to collapse.

Mr Honohan told the Oireachtas Finance Committee that while the tapes contained a "game plan" there was no evidence of the executives in question following it up.

One recording outlined how bosses were ordered by former chief executive David Drumm, now based in the US, to go to the Central Bank with ''arms swinging'' to demand ''moolah''.

Another revealed that head of treasury John Bowe claimed that regulators were ''effectively egging us on - for Irish banks to help each other''.

Mr Honohan said he originally believed the tapes may have contained new evidence - when they were first published by the Irish Independent over the summer.

"I wanted to use the opportunity to dampen down any collateral damage abroad, so I used the opportunity to do that, which was a good opportunity," Mr Honohan said.

"I said 'yes, there is new information here'. So now, why does it turn out we are not doing anything?

"While to the ordinary person out there it looks like there is something here, there isn't a smoking gun."

Mr Honohan said the bankers' behaviour exposed in the tapes was "outrageous" but not enough for a court.

The recordings revealed a cut-throat culture and exposed executives joking about a potential bailout and the controversial blanket bank guarantee.

The tapes date back to the period around September 2008 when the then Fianna Fail-Green Party coalition government brought in the 440 billion-euro guarantee.

They were first reviewed by Garda fraud investigators three years ago when criminal investigations into the bank first got under way.

Phone calls between Mr Drumm and Mr Bowe, and others at the bank, were recorded as a matter of routine as the latter worked on a trading desk.

The executives featuring in the tapes have denied any wrongdoing.

He said the Central Bank wanted to keep the public well informed following its review of the tapes, which officials have been studying since they first entered the public domain in June.

"We felt we owed it to the public not to pretend that we have sufficient new evidence of criminality, saying we're working at it when we don't," Mr Honohan said.

"We owed it to the public to say we looked at this thing, we looked at it but we don't have anything. We are not slow to go to the gardai with suspicions of this or that.

"In this case we have nothing new. It doesn't mean something else might be coming up or something else going on. It was because we wanted to communicate fair and square with the public."

Anglo has cost the Irish state about 30 billion euro and is being liquidated under the rebranded Irish Banking Resolution Corporation.

Separately, Director of Public Prosecutions Claire Loftus issued a strong warning last week to the media and commentators about the risks of prejudicing trials involving former Anglo chiefs.

She warned that the risks of committing a contempt of court by publishing or broadcasting prejudicial material increase as any trial date approaches.

Her comments followed confirmation from Taoiseach Enda Kenny that the Government had set wheels in motion for an investigation into the September 2008 blanket bank guarantee and events surrounding it.

There have been concerns that a parliamentary inquiry at the same time as lengthy and complex fraud trials would spark protracted High Court challenges from those involved.

Press Association

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