EXTRADITION PROCEEDINGS could be taken against former Anglo Irish Bank chief executive David Drumm if the Director of Public Prosecutions takes a case against him at the end of the Garda investigation, the Dáil has heard.

Minister for Finance Brian Lenihan also told the House that Mr Drumm’s legal representatives failed to respond to the bank’s counter offer to his proposals before he filed for bankruptcy in the US.

Mr Lenihan was responding to questions in the Dáil following a debate on the bank guarantee. Joe Costello (Labour, Dublin Central) had asked the Minister if he intended to “pursue” Mr Drumm “in respect of the collapse of Anglo Irish Bank? If so, will you consider extradition proceedings?” The Minister replied “extradition proceedings can take place at the conclusion of the Garda inquiry. In the event the Director of Public Prosecutions institutes proceedings against particular individuals, their extradition can be sought in respect of those offences.”

Earlier, Labour finance spokeswoman Joan Burton called on Mr Lenihan to make a “comprehensive statement” about proceedings against senior bank executives “particularly in view of the fact that the former managing director of Anglo Irish Bank has taken refuge in the courts of the United States”. Ms Burton asked what implications this had “for any kind of accountability by this gentleman and others, who have been directors or chief executives of banks. What will the Minister do to ensure that this particular individual is made accountable to the Irish system?”

The Minister said Mr Drumm’s “outstanding liabilities to the bank are €8.5 million”. The bank “has sought to maximise the return for it and the taxpayer. The tactics adopted by it and its legal team are a matter for them in the day-to-day operation of the bank. I have been clear that the bank should pursue all debts owing to it and Anglo Irish Bank has instigated proceedings to achieve this.” Mr Lenihan said the bank “made its latest offer on October 8th. Mr Drumm’s representatives had not responded to this counter offer when he decided to file for bankruptcy in the US.”

The former chief executive had made settlement proposals but “what was offered to the bank would have left a severe shortfall in the region of €4 million to be borne by the taxpayer, which was not acceptable to the bank. Its priority throughout has been to ensure that Mr Drumm discharges the full amount due, even if that was spread over a number of years.”

He said “beside the settlement of the bank debts, the bank was also seeking to ensure Mr Drumm’s full co-operation with the various investigations ongoing into the previous regime at the bank”. Mr Lenihan said, “It is now a matter for the bank and its legal team to assess this latest development and take whatever action is necessary to protect the bank and taxpayers’ interests. The bank remains in contact with the National Treasury Management Agency . . . and is keeping the latter briefed on the various proposals.”

Earlier Charlie Flanagan (FG, Laois-Offaly) called for the State to be represented at Mr Drumm’s bankruptcy proceedings and he asked Taoiseach Brian Cowen if he would talk to the Attorney General. Mr Cowen told him “these matters are obviously discussed by the bank and I will take up the matter and find out the position”.