The conviction of former Anglo Irish Bank chief executive David Drumm will send the message that people cannot claim they were "only following orders", the lead detective in the investigation has said.
Det Supt Gerard Walsh of the Garda National Economic Crime Bureau said Drumm's jailing last week for six years in prison showed that people were "ultimately responsible for their own actions".
"This trial will show that people like to use: 'Somebody told me I could do this,'" he told The Irish Times. "I think people realise that they are ultimately accountable for their actions."
Drumm’s defence counsel told the Dublin Circuit Criminal Court before the former banker was sentenced last week that he believed he had the tacit if not actual approval for the Financial Regulator when he authorised and directed the €7.2 billion fraudulent transactions between Anglo and Irish Life & Permanent.
His legal team claimed Drumm carried out the circular transactions in September 2008 to save the bank during a deteriorating financial crisis months after the regulatory authorities had encouraged Anglo to be part of a “green jersey agenda” where Irish banks would help each other.
Sentencing Drumm, Judge Karen O'Connor said there was "no evidence" in the case that the Central Bank or the Financial Regulator "directed criminality" and that "inaction, weakness and ineptitude" on the part of the financial regulatory authorities was "no excuse" for Drumm's fraudulent scheme.
Groupthink gone
Det Supt Walsh said he believed society had changed and that groupthink had been replaced by a view that “we are all accountable for our actions now”.
“‘I was only following orders’ doesn’t really work any more,” he said.
The transactions Drumm directed made Anglo’s deposits look €7.2 billion stronger than they actually were in a bid to cover up a massive run on the bank.
The investigation was one of the longest and most complex undertaken by An Garda Síochána, involving 16 detectives at its busiest time.
More than 400 interviews were conducted during the investigation that began with a complaint from the Financial Regulator in 2009. Detectives listened to tens of thousands of phone calls on the recorded treasury department lines at Anglo and Irish Life & Permanent to help build the case against Drumm.
Det Supt Walsh said it became very clear at an early stage of the investigation there “never was” €7.2 billion but the same €1 billion going back and forth between the institutions, counted by Anglo seven times.
“I give you a penny, and you give me the penny and we give it to each other over and back, and suddenly you’re telling me you have seven pence and we’ve only got the one penny: it doesn’t take long for me to work out,” he said.
There was “no commercial rationale” for the transactions, he said, and it was “a difficult thing” for investigators to overcome the view of auditors who believed there was “nothing really wrong with that” and to find witnesses who “might be able to rebut the views of other experts”.
Taped calls
Det Supt Walsh said the discovery of the taped phone calls was “quite significant” and “probably put a human side to the story” enabling investigators to understand the transactions, but more evidence was needed.
“The tapes on their own wouldn’t have proved anything. You needed to back them up,” he said.
The hardest part of the investigation was, he said, the number of solicitors that individuals and institutions brought to interviews over concerns about potential damage to their reputations.
This slowed the investigation and was “quite unusual”, said Det Supt Walsh.
“It was the first time in our investigations that we ever had a situation where nearly everybody we interviewed, even though they were witnesses, had a solicitor sitting beside them,” he said.
He declined to say whether the immunity-from-prosecution deal granted to former Anglo's former chief financial officer Matt Moran helped their investigation, saying this was a matter for the Director of Public Prosecutions.
