Is David Drumm Innocent?

Anglo Irish Bank in New York
Anglo Irish Bank in New York (Photo credit: Wikipedia)

David Drumm, former Chief Executive of Anglo Irish Bank, still protests that there was no deliberate misleading of the government. In this interesting interview with Irish Central he claims the bank was not trying to hook the State into open-ended support, despite what the tapes may have suggested. And by suggested I mean “said aloud”. What’s surprising is that he actually does come across as innocent.

And by innocent I mean “having the intellectual capacities of a child”.

He claims that all Anglo ever wanted from the government during the market storm that followed the collapse of Lehman Brothers was a single little shot of €7 billion to keep it liquid – I quote – “assuming the financial markets crisis returned to normal at some point in the near future”.

We do all know of course that this storm was the financial markets returning to normal. The period before that, when banks like his made billions simply by driving up the price of houses and pouring massive piles of credit onto anyone who stood still long enough, that was the abnormality. The cash equivalent of a screaming drunken spree with an open bottle of whiskey in each hand is the normality he is referring to here.

Anglo, he’s saying, just needed a few billion to tide it over until things became unsustainable again. He cannot of course have been stupid enough to believe that was in any way realistic; it was just the line of bullshit that they had to take in a desperate bid to survive. What surprises me is that he’s stupid enough to think we’re stupid enough to think he really believed it.

 

Smoking Tape

AngloSo the “Anglo Tapes” – internal phone recordings made during the last days of Anglo Irish Bank. Do they constitute a smoking gun?

Hoo boy, you betcha. A smoking gun, covered with bloody fingerprints, with a note taped to the barrel saying “For doing the murder with”.

This is the stuff.

I have to admit I was a little dismissive when I first heard of this, much as I couldn’t quite believe all the fuss over the PRISM revelations. (“You mean you believed US intelligence forces didn’t spy on whoever the hell they liked?”) We all knew that Anglo had ripped off the nation. Had, as the Indo bluntly put it, “cost Ireland our sovereignty“. But we also knew it was done with nods and winks and complicity, screened off by tendrils of loyalty and friendship. These people don’t leave evidence.

But that really seems to be what we’ve got here. The tapes record senior – very senior – management explaining a strategy of lying about the severity of the bank’s situation. They knew that if they revealed the full picture, government would see little alternative except to let the bank fold. They cynically calculated that if the State was tricked into giving a few billion of support at first, it would be forced to follow up with more and more in a frantic effort to save its investment. Which is precisely what happened.

They cheated the State in order to try to save their wealth and positions, cheated it of billions and billions. And when I say the State of course, I mean you and I. People who pay tax, people who rely on the State to support and protect them. Everyone in the country, in other words. We were all robbed by this, quite deliberately.

We shouldn’t oversimplify. This doesn’t let the other lenders and speculators off the hook for stoking the property boom, exonerate the politicians in Fianna Fáil (and elements of the media) who were complicit in the bubble, or mean that the euro was not grossly mismanaged. Anglo’s rooking of the public was certainly not the only cause of Ireland’s economic demise. But these men tricked the country into taking on billions and billions in debt. Billions that could have gone to creating jobs or equipping hospitals.

And there are tape recordings of them saying how they did it.

One does not want to prejudice any possible legal proceedings, so to be circumspect… Wait, what was that? Sorry, I thought I heard something. Probably thunder. Though it sounded even more like a long corridor of cell doors clanging shut.

Complete This Sentence

Ooh! Ooh! We got our report card! The IMF has checked out what we’re doing with all the money they lent us. Let’s start with a choice quote:

At around 40 percent of GDP, the cumulative cost of supporting the financial sector accounts for half of the sharp increase in net public debt in recent years.

That’s probably as close to saying “Basically they’d be OK if they weren’t a pit prop for Europe’s collapsing banking industry” as the IMF can allow itself to get.

On the bright side, people have finally been jailed over the billions that were ripped off the nation. Some of the bankers, right? Well no, some of the borrowers in fact. But it’s a start.

(Actually when I saw the headline “Sean Quinn’s son and nephew jailed for three months“, I assumed it was one person. Ours is not to question what goes on within a family.)

Sadly though the jail term is not for social larceny, but merely contempt of court. Which reminds me… Now cases are ongoing I probably need to scatter the word “allegedly” liberally through the following. But it seems that the Quinn family, having invested well but not wisely in the failed Anglo-Irish Bank, attempted to hide their assets from their creditors. Which, since the state has taken ownership of this mess, is us the taxpayers.

Allegedly.

There was a stupid debate on the radio today, where a loyal follower of the Quinn camp came on to argue that the family was being persecuted. It’s too late to act like innocent dupes of the big bad bank though, when you’ve been caught trying to hide your money down the back of Russia.

It was a big bad bank however (allegedly, allegedly…), and the other recent good news from the fiduciary front is that Anglo’s erstwhile financial director has been charged with sixteen fraud offences. Sixteen. Imagine, a banker could actually go to jail.

But for how long? A friend of mine did an interesting calculation. A few months ago, someone received a six-year sentence for not paying VAT on the garlic he imported. Don’t say that’s harsh until you see some of the garlic we get in the shops; you’ll agree that hanging is too good for them. The penalty was so severe because the tax he evaded came to €1.6 million. Which establishes that sentences are proportional to how much you rip off the State. Interesting…

Six years for 1.6 million – that’s 3.75 years for each million off-ripped. Anglo’s greedy machinations cost the exchequer €47 billion (€30.6 billion + interest). So if his punishment is to be kept in line, he’ll have to go away for… 175,250 years.

Not to despair though. What with prison overcrowding he’ll probably be out in just a few thousand.