Monday 14 October 2019

'Shower of clowns' - How the infamous Anglo tapes caused this trial to come to life

Former Anglo Irish Bank chief executive David Drumm Photo: Courtpix
Former Anglo Irish Bank chief executive David Drumm Photo: Courtpix
Former CEO of Anglo Irish Bank, David Drumm (51), with an address in Skerries, Co Dublin, pictured at the Dublin Circuit Criminal Court earlier this week. Photo: Collins Courts.
Andrew Phelan

Andrew Phelan

IN most criminal trials, the dramatic moments usually come from the “live” evidence - a witness testifying about a crime or coming under the pressure of a round of cross-examination.

But, dominated by extended discussions about the financial world and the dry language of money markets, boardrooms and balance sheets, the witness box was not usually a place of high drama in David Drumm’s trial.

We know that 2008 was a calamitous time for everyone involved in the case but there was often precious little colour to their accounts of what happened, and it was sometimes difficult to gauge the significance of the facts and figures being listed off.

It was only in the now-infamous Anglo tapes that this trial really came to life.

These were phone calls between the bankers; most knew they were being recorded as part of standard practice but it's impossible to know how alert they were to this in the white heat of the unfolding crisis.

As their decade-old conversations were played back to the jury, from the end of crackly phone lines and through streams of fast-talking, often foul-mouthed bravado and gales of nervous laughter, the players in this debacle finally came into focus.

In one of the most revealing calls, Drumm was heard describing Financial Regulator Patrick Neary as “f**king Freddie f**king Fly” and the Central Bank as a “shower of clowns.”

This was on September 19, before Anglo got emergency funding during the financial crisis, the jury heard.

He and Head of Capital Markets John Bowe were heard discussing getting cash from ILP. On this call, Drumm was not aware he was being recorded.

“You can’t take it off f**king Freddie f**king Fly down there, the Financial Regulator because it will appear on the balance sheet,” he said.

Drumm also spoke about getting money from the Central Bank, first referring to the stress Anglo was under.

"We'll be saying, 'Yeah, a stress because HBOS were f**king sold and Lehman's went bust and f**king Bank of America f**king took over Merrill's and other f**king non-normal things happened,” Drumm said.

“We need the f**king loan because we are running out of money,” he said.

He said he was going to “keep it simple.”

“I'm going to keep asking the thick question: 'When, when is the cheque arriving?',” he said, adding: “if we say it in their language, nothing will happen. You have it, so you're going to give it to us and when would that be? We'll start there," he said. "If they don't give it to us on Monday they have a bank collapse. If the money keeps running out the door, the way it has been running out the door."

On September 22, the two men again discussed the bank’s situation and Mr Drumm at one point asked about what would happen if they got “€4bn or whatever from that f**king shower of clowns down on Dame Street.”

Drumm himself spoke frequently about the seriousness of Anglo’s troubles, describing sending a letter to the Financial Regulator about a breach of liquidity rules as “signing a death warrant.”

Elsewhere, he predicted, “we’re f**ked,” even including the €6bn “fixes”he said were confirmed by “Mr f**king Denis”  - a reference to ILP’s Denis Casey, according to the prosecution.

“If this photo is ever going to be published on f**king Bebo, it’s not going to look that great,” Mr Drumm said of Anglo’s upcoming end of year balance sheet - known in the business as a “snapshot.”

He said it did “not look doable” that you could “fix the poxy balance sheet over the year end.”

Drumm wasn’t alone in his use of colourful turns of phrase on the phone to his colleagues.

In September 2008, CFO Matt Moran and Mr Bowe were heard discussing an upcoming meeting with Ewen Stevensen of Credit Suisse and how a proposed deal with that bank would be broached.

“If I can get a bit of drink into him, I might say to him, I’d like about €5bn before the 30th,” Mr Moran said.

“Get him to sign the beer mat,” Mr Bowe said. “Do you think he’d be prepared to give us a little kind of one night stand?”

“If I can promise him there’s no f**king STD out of it,” Mr Moran said.

“It’s a dance,” Mr Moran said and the pair discussed the proposed transaction.

“It’s sort of the cherry on the cake, plus a bit of the cake as well,” Mr Bowe said, to laughter. “And the f**king tin as well. And the bloody oven.”

“It’s two f**king layers,” Mr Moran said.

The jury heard how the earlier March 2008 deal with ILP- the “prototype” for the the September transaction - was set up.

“You put the stuff into us and we put it straight back through the other boys,” David Gantly of ILP said to his Anglo counterpart Matt Cullen.

After laughter, Mr Gantly said: “I’m purposely not using names here. The walls have ears in this climate.”

“I can vouch for my own people, I know because of them, you have to be tight as a duck’s arse here,” he added.

The jury heard this was a reference to fears that the deal would get out to the market.

Often the financial jargon had to be translated for the jury.

“I know I can’t do f**king six yards worth of funny stuff,” Ciaran McArdle was heard saying to Paul Kane in a September 25 call, for example.

The court heard a “yard” was banking term for “billion”, but nobody ventured a definition for “funny stuff.”

Likewise, there were various references to “rinky dink” deals and figures, with the jurors left to ponder the precise meaning.

Nearly everyone referenced in the calls was easily enough identified from context, despite the bankers’ fondness for nicknames - “Drummer”, “Johnny Wonder,” “Kaner”, “Gants” or, less cordially, “Mr F**king Denis.”

But exactly who “the rock star” or “the badger” were, both referenced in the same call, was again left the jury’s imagination.

Elsewhere, the tapes allowed the prosecution to show the jury how deals had been spoken about by those in the bank.

The jury heard a September 25, 2008 call between Mike D’Arcy from Anglo’s Treasury department and Vincent Hibbert, a finance manager in the bank’s Isle of Man division.

Mr Hibbert asked a question about the “rationale” of a transaction.

“Do you want the answer to tell the auditor or do you want the answer?” Mr D’Arcy replied, before going through the transaction, adding: “that’s what it is.”

This was one of the excerpts that was strongly challenged by the defence, who tried to have it ruled inadmissible.

After it was heard by the jury, Mr D’Arcy said in evidence that this was a joke.

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