David Drumm claims regulator aware of Anglo efforts to ‘protect itself’

Former banker wrote in email, ‘I’ll go public if they deny it and try to protect themselves’

Former chief executive  of Anglo Irish Bank David Drumm (51), Skerries, Co Dublin, arriving at the Dublin Circuit Criminal Court where he is charged with conspiracy to defraud. Photograph: Collins
Former chief executive of Anglo Irish Bank David Drumm (51), Skerries, Co Dublin, arriving at the Dublin Circuit Criminal Court where he is charged with conspiracy to defraud. Photograph: Collins

Former Anglo Irish Bank chief executive David Drumm said the financial regulator and Central Bank were fully aware of what Anglo was doing to protect itself in September 2008.

“I would relish the opportunity to sit in front of Con and ask him to tell me to my face that he didn’t know about this,” he wrote in an email to Matt Moran, former Anglo chief financial officer on January 13th, 2009.

The court heard that Mr Drumm was referring in the email to Con Horan, prudential director of the Financial Regulator in January 2009.

Mr Drumm also wrote in this email: “IFSRA and the Central Bank are fully aware of what we’re doing to protect ourselves so I’ll go public if they deny it and try to protect themselves.”

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IFSRA refers to the Irish Financial Services Regulatory Authority.

Gary McGann, a former non-executive director at Anglo, gave evidence in Mr Drumm’s trial at Dublin Circuit Criminal Court on Wednesday.

Mr Drumm (51), Skerries, Co Dublin, has pleaded not guilty to conspiring with ex-bank officials Denis Casey, William McAteer, John Bowe and others to defraud depositors and investors at Anglo by “dishonestly” creating the impression that deposits in 2008 were €7.2 billion larger than they were.

He has also pleaded not guilty to false accounting on December 3rd, 2008, by furnishing information to the market that Anglo’s 2008 deposits were €7.2 billion larger than they were.

No recollection

Mr McGann told Mary Rose Gearty SC, prosecuting, that he had no recollection of seeing the email before.

She said Mr Drumm said banks had to “show access to get access”, and described balance sheet management as a common practice in all banks, “credit crunch or not”.

In the email, Mr Drumm summarised the meetings he had with the financial regulator and the Central Bank in 2008. He said the governor of the Central Bank felt strongly that Anglo should engage with other Irish banks to find an intra-Ireland market, as banks in Italy had done in response to the global financial turmoil.

Mr Drumm said he told the regulator and the Central Bank that “the two big boys” wouldn’t help Anglo. He said he told both entities that Anglo enjoyed an excellent relationship with Irish Life and Permanent (ILP) and “they are helping us out”, adding that he said he was happy ILP wouldn’t let them down.

Amended minutes

Ms Gearty asked the witness if he, as a board member and member of the audit committee, was aware of the September 2008 transactions with ILP. He said the board were aware of it in a general sense but not of the specifics.

During cross-examination, Mr McGann told Lorcan Staines, defending, that in late 2008 he felt the world as we know it would never be the same again.

He agreed that a handwritten minute from a board meeting held on September 30th, 2008, at which he was present, said Mr Drumm had discussed the inflows and outflows associated with the €7.2 billion deal.

Natasha Mercer, former Anglo company secretary, said she amended minutes of a November 2008 audit committee meeting to include a reference to the transaction with ILP because she was asked to do so by bank executives.

Last week the trial heard that Mr Drumm accepts the facts of the 2008 transactions between Anglo and ILP but he disputes they were fraudulent or dishonest.

The trial continues.