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Not illegal, but just plain wrong

The first thing to be said about our report today on the millions of dollars loaned to Irish luminaries so that they could buy apartments in New York is that the Anglo Irish Bank people did nothing legally wrong.

Who in their right mind would turn down an offer of such a gilt-edged investment? Owning a New York apartment is like having a lease on the crock of gold at the end of the rainbow. At least it was 18 months ago. Now it is just a crock.

The individuals who grabbed the opportunity offered by Anglo Irish Bank have seen the value of their property investments greatly diminished, but they still owe the money they borrowed.

They owe it to a bank whose directors had been casually paying each other massive amounts on foot of a property bubble which had already burst and which would soon contribute to recession and huge job losses.

Some of those who borrowed large amounts from Anglo Irish Bank to buy property in New York are business people who might have been expected to sense the troublesome juggernaut that was already hurtling down the line, but others, a professional jockey or an air taxi entrepreneur, might have benefited from a little cautionary advice.

Sadly they were dealing with a bank already wallowing in deep denial.

Just 18 months ago, the then chief executive David Drumm was telling his shareholders that the bank was in a robust funding position. By September, crisis was in the air, as Anglo Irish lost €4bn in days and the Government announced its €400bn guarantee of all six Irish banks. Two weeks later, Sean FitzPatrick resigned as chairman when shareholders found out about his €87m hidden loans. He was followed the next day by Mr Drumm.

So much has happened in such a short period of time that people can find it difficult to differentiate between mere denial, obfuscation and mendacity which have accompanied the banking collapse and other matters which are being looked into by the Garda and the Office of Corporate Enforcement.

Still, it is important to say about the Irish millions that were blown on New York apartments that the Anglo Irish Bank people did nothing legally wrong. Nothing at all.

Irish Independent