Friday 22 March 2019

Drumm 'was togging out for Ireland' to beat crisis

Former Anglo Irish Bank chief executive David Drumm said he was ‘trying to save the bank’ after ‘answering Ireland’s call’ during the 2008 financial crisis. Photo: Courtpix
Former Anglo Irish Bank chief executive David Drumm said he was ‘trying to save the bank’ after ‘answering Ireland’s call’ during the 2008 financial crisis. Photo: Courtpix
Andrew Phelan

Andrew Phelan

Former Anglo Irish Bank chief executive David Drumm "answered Ireland's call" and was "trying to save the bank" when he authorised a €7.2bn deal at the height of the 2008 financial crisis.

A jury was told Mr Drumm had been asked to "tog out for Ireland" as part of the so-called Green Jersey Agenda when banks were encouraged to club together in the face of that crisis.

In another metaphor, suggested by his defence lawyer Brendan Grehan SC, he was "captain of a ship" and "did what he had to do to get that ship through the storm".

According to prosecutor Mary Rose Gearty SC, however, Mr Drumm had taken part in a "massive con" on the market in a transaction that was "very devious" and "monumentally fraudulent".

Both sides delivered their closing speeches this week in what has become one of the longest running trials in the history of the State. Now in its 16th week, it has reached its final stage as Judge Karen O'Connor said that on Monday she will deliver her charge to the jury, which involves instructions on how the law applies in the case.

The enlarged jury, specially empanelled for longer trials in case of drop-outs, will then be reduced to 12 for deliberations.

Mr Drumm (51) is pleading not guilty to conspiring to defraud by dishonestly creating the impression that Anglo's customer deposits were €7.2bn larger than they really were in September 2008.

The case centres on a series of interbank deposits which circulated between Anglo and Irish Life and Permanent. The transfers were routed through Irish Life Assurance (ILA), returning to Anglo where they were then treated as customer deposits, which are a better indicator of a bank's health.

Mr Drumm also denies false accounting, by providing misleading information to the market. The barristers set out their cases over the course of two days at Dublin Circuit Criminal Court this week.

First to address the jury was Ms Gearty, who argued Mr Drumm knew "full well" when the bank's financial results were released in 2008 that the customer deposits figure was false and he took part in a criminal conspiracy or "confidence trick" on the markets.

She argued the bank had sent its own money "around in a circle" and disguised it as a €7.2bn customer deposit.

Ms Gearty asked the jurors to imagine one of them passing one euro to another, who then passed a euro back, taking a careful note. If this were done six times and "if you add it up you have €7 on your note" but "in reality you only have €1 - that is what we say happened here", she said.

The prosecution's case was the alleged deception could have caused depositors or investors to make financial decisions based on wrong information.

"Effectively that people would leave their money in Anglo at a time when Mr Drumm and his colleagues knew that the bank was going down the tubes," she said.

"Everything about this was so monumentally fraudulent it may be hard to understand why it wasn't called out in the bank."

Mr Grehan, whose closing statement concluded yesterday, argued that the charges were more complicated than was suggested by the prosecution.

He said "all the hallmarks" of conspiracy were missing from the case and asked if there was anything wrong with the transactions, how could it be that it was missed by Anglo's audit committee, which was there to correct Mr Drumm's "homework".

He said that of "all the eyes that were looking" at what was going on in Anglo, nobody, including the auditors Ernst and Young and the Financial Regulator, "raised a red flag".

Asking the jury to acquit, he said Mr Drumm did not commit any fraud and the transaction was "legitimate balance sheet management".

"There is no crime, there is no fraud, there is no false accounting, there is no evidence anyone was misled and there's simply no conspiracy," Mr Grehan said. "This was not a con job, this was somebody simply doing their best in the circumstances in which they found themselves."

Irish Independent

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