Wednesday 26 September 2018

Paul Williams: Anglo Tapes were our 'black box' insight into crash

Former Anglo CEO David Drumm, who is currently serving a six-year sentence in Mountjoy (Niall Carson/PA)
Former Anglo CEO David Drumm, who is currently serving a six-year sentence in Mountjoy (Niall Carson/PA)

Paul Williams

The main objective in the wake of a catastrophic plane crash is the retrieval of the so-called ‘black box’ as investigators try to explain the cause of the disaster.

Apart from the flight data recorder, which preserves technical data, there is the cockpit flight recorder which contains the discussions of the pilots leading up to the fateful end.

The commentary in the moments before the flight plunges out of the sky is vital to developing the narrative around the cause of the calamity. The Anglo Tapes was our ‘black box’ insight.

The tapes contained recordings of internal phone conversations between senior executives at Anglo who clearly assumed their arrogant admissions of deceit and lies would never fall on unauthorised ears.

David Drumm’s expletive-strewn language provided an angry nation with the first clues about what was really going on in the cockpit of the rogue Anglo Irish Bank.

LISTEN: Anglo Tapes - Anglo boss David Drumm laughed as colleagues poked fun at bank's imminent collapse

From the mouth of the toxic bank’s former CEO spilled the unvarnished truth of his contempt for the State authorities – the Financial Regulator, the Central Bank and the Department of Finance – that had fallen asleep at the wheel.

The tapes, recorded before and after the bank collapse in 2008, brought the listener on a roller coaster ride as Drumm and his compatriots flew high and loose with billions in a desperate bid to somehow pull out of the dive – by laying it at the feet of the Irish taxpayer.

One illustration of that disdain was captured in a conversation between Drumm and his then head of treasury, John Bowe, which was recorded on October 2, 2008. But first the context.

It took place two days after a panicked Government rushed through the disastrous blanket bank guarantee which covered all deposits and borrowings, including bond holders, at all six Irish-owned banks for a period of two years.

The unprecedented move caused alarm throughout the eurozone with the German chancellor Angela Merkel, and later British chancellor of the exchequer Gordon Brown, expressing to the Irish Government their anger that the guarantee was encouraging eurozone banks to move huge deposits into Irish banks – leaving their own vulnerable to collapse.

But Drumm laughed off the high level concerns jokingly asking Bowe: “Ah, you’re abusing that guarantee. Paying too much in Germany I heard now as well. F**king ridiculous, John.”

His senior treasury executive broke into a spontaneous rendition of the old German national anthem: “Deutschland, Deutschland, Uber Alles.”

As both men cackled Drumm mocked the senior regulatory official who had contacted both of them to warn against Anglo abusing the guarantee.

Said Drumm: “I had (regulatory official) on this morning. I should be recording these calls for the f***ing craic – or at least making notes. (Mimicking official) ‘It’s f***in’ awful what’s going on out there. I mean the f***in’ Germans are on to us now, David, you know.”

Bowe explained the regulator’s concerns to his boss: “What he’s suggesting is that UK banks are setting us up by pointing money in our direction and then saying: ‘There ya go. That’s something that was ours that they’ve got.’”

Drumm replied: “So f***in’ what? Just take it anyway…Stick the fingers up.”

In another conversation with Bowe which was recorded in December 2008, Drumm castigated the finance minister of the day, the now deceasedlate Brian Lenihan, as he ranted about a lack of progress in talks to secure billions of euro of taxpayers’ money in funding.

He described a Government request to carry out an assessment of the quality of the banks assets – three months after the bank guarantee – as “insulting to the intelligence because they have guaranteed all our liabilities”.

Drumm said he intended to “punch” the minister when he met him the following morning, December 16.

He told Bowe what he intended sayingto the Minister: “Really, what I want to know is: ‘What’s this about process and due diligence and all this? You’re putting the Government guarantee at risk with your delays… and your lack of action’. And ‘what’s this about having to go through due diligence? You (Minister) made that decision on the 29th of September. You’ve told the f**kin’ world we’re all solvent. You’ve made, you’re actually, you’re pregnant on that.

“‘Now, can you protect your hundred billion guarantee of us, by writing a two or three billion cheque and get on with it, which will be the cheapest cheque… you ever have to write on us.

“So my goal tomorrow is to get that through to him: ‘Do you understand? Can I teach you just one piece of banking here? When you have guaranteed somebody’s entire liabilities, it’s smart to write a very small cheque to stop them being called. Which bit of that don’t you get?’

“Because I don’t think he gets it. And he’s very badly advised, obviously.

“So, I’ll probably punch him [Lenihan]. And I mean punch him, as if to say [to Lenihan]: ‘What are you actually doing? Because you are creating an awful lot of uncertainty... can we move the game where you give us a little bit more clarity than you have given in relation to availability of capital.’” 

Paul Williams broke the original Anglo Tapes in the Irish Independent

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