David Drumm interview

Scofflaw

Quite interesting: http://www.irishcentral.com/news/There-is-a-witchhunt--I-convince-myself-that-this-will-pass-134533003.html

The usual bits that annoy the heck out of one:

Ireland had a 15-year boom, unprecedented and the Celtic Tiger. There wasn’t a person in Ireland in 2005/06/07, not a person, who did not believe Ireland would just rage on for decades.

"Not a person"...

Also, apparently absolutely everything was fine, was great, mistakes were made, but everything was above board, ya, it was all good...actually, it's a bit anger-inducing:

DD: You have to keep in the context of what was going on generally. All Irish banks went abroad borrowed easily, built the balance sheets to a half a trillion. The size of the Irish banking system was three times the size of the economy.

Nobody thought that was an issue, I didn’t think it was an issue. I didn’t even look at it that way, either did the central bank, clearly either did the government or they would have done something about it. It’s like an Icelandic situation, the banks got very big.

That was all OK because everybody believed that we were in a unique situation in Ireland. We had a great economy, we had tremendous fundamentals that would see us through and therefore life was good and we would continue to grow over time. We were going into a bit of slow down perhaps and a correction in Ireland but generally our prospects were very, very good. To change history you would have to change what was happening at the macro level in Ireland.

NOD: The Celtic Tiger.

DD: The Celtic Tiger. Any one institution that would have had the brilliance to step out and say ‘you know what we think this is actually a bit of a mad bubble and we are going to stop’ would have been ridiculed.

No Irish media saw it coming. People like the guy in UCD saw it coming and very, very skillfully so. Nobody else saw it coming. The Irish media cheered it on. The bank was doing so well, they couldn’t say enough good things about us. Oliver Wyman (Global consulting group) in 2007 reviewed the bank and listed us in an international report as the best performing bank in the world, that was in 2006. Oliver Wyman! So everyone was caught up in that thing.

NOD: So do you ever wake up and think what happened?

DD: Ya, you go around and around and around it. You think, personally what if I hadn’t have taken the job? Why did I come back from America? There were four candidates in the pot and my life would have been very different if I didn’t get the job.

The Central Bank was apparently not even slightly ready for the crisis:

DD: They told me that they had four billion in the system in a number of pockets. There is a naivety to that as well on my part, because you go down and say well we are in a bad place, now we need to go to the Central Bank. I never thought I would see myself doing this, but I am going down to Dame Street with the begging bowl. Saying ‘listen we are in real trouble now, you’ve got to do something’. But you expect the governor of the Central Bank will say ‘thank you, I’m glad that you are here, now here is our procedures for this. You need to do this, this and this and we are gonna’. But they were clueless, because they were not ready for it. We asked for a certain amount of money to be secured, we were never given an answer. The two weeks, I call it the two weeks of Lehman, because it was that between Lehman and the guarantee being issued, went by with us running around trying to get the Central Bank, the government, we put messages into the Department of Finance because the governor kept telling me ‘you know I am relying on the department of finance here and I have to keep asking them’. He wasn’t getting answers from them. So they were all gone into, I think of it like balls of little mercury, sort of scattered. They just weren’t joined up.

And nearly everything was someone else's fault:

DD: We came to the 30 of September, the 29 of September and we run out of money and I was down at the Central Bank and they said OK you are going to have to ask for emergency funding. Fine how do I do that? They sent me a draft of letter, I got it typed up, I signed it, we need two billion tomorrow to be able to open the doors. So signed that letter and then that was a long day, as you know. I could talk all day about that. We were down at BOI asking them to merge with us. But the end of the day was asking the Central Bank for the emergency funding, two billion. I went home, I ate my dinner and I went to bed and when I woke up in the morning I had several voicemails and messages on my phone and one of them was from Pat Neary to tell me that the government had guaranteed. Then of course I heard it on Morning Ireland. Anglo Irish did not ask them to do that, we asked for a secured loan.

What happened was Allied Irish Banks and Bank of Ireland went down to the Government and obviously talked them into provided a blanket guarantee.

NOD: Do you think that was a mistake?

DD: Most definitely.

NOD: How did they manage to convince them?

DD: Because I think everyone was trying to figure out what to do and it was panic. I am not criticizing them, everyone was panicking. So what did they do? Individual rescue packages or lending packages into the banks, which is what we were trying to achieve for Anglo might have staved it off, might have fixed it. They went with a sort of nuclear option, out of the bag, out of the box and we were, don’t get me wrong, we were extremely grateful. When we woke up that morning our problems were solved and we thought they were brave. The problem with the guarantee was it signed them up forever, they had no way back, it was blind. And then the thing they did next was self damaging, like Nama.

NOD: Did they think the entire debt was like seven or eight billion? Did they know what the real debt was?

DD: They knew they were issuing a guarantee to the effect of 500 billion, because that was the size of the liability. But they reasonably and it was reasonable to believe there wouldn’t be the level of bad debts in the banks, because they weren’t looking forward as to what might happen and what have you.

I think that is probably a reasonable view at the time. It was very brave to give the guarantee, but it was based on the banks are OK, Merrill Lynch and what have you. The two things in 2009 that then made that look like a poor decision, one was NAMA, because they fashioned that rod for their own back, they created losses in the bank they had just guaranteed.

Which I still cannot understand why anyone would do that. The second one would be the Irish economy did go into a real hockey stick dive, starting in the first quarter of 09 and then the loans started to deteriorate.

NOD: Did BOI and AIB mislead Lenihan and Cowen that night?

DD: No, I don’t think they mislead, I don’t think any of the banks believed there was anything like the bad debts that came afterwards. What they did know was that Anglo had run out of money, because we had been down to both of them, we had been down to BOI and we had talked to AIB but they were also running out of money and they wouldn’t last much longer. What pissed me off is they planted it entirely at the door of Anglo, Anglo owned a proportion of it, but they planted the whole thing at the door of Anglo and got themselves a guarantee. BOI told us they were having the same problems. ‘We're the big bank, but we’ll be OK, look at him, you better issue a guarantee, because he is going to bring us all down’. But they got the guarantee for their own benefit as well. They had actually very successfully pinned it all on Anglo, don’t mind some of it, but they pinned it all.

Mostly anger-inducing, actually, but worth reading.

cordially,
Scofflaw

Agent J

I read the interview in the SBP.

The guy is still deluded. I am interested in his work visa though. He claims the visa is no longer an issue.

He still claims Anglo were facing a liquity problem & not a solvency one.

I dont understand how any company would touch him.

liammur

Scofflaw wrote: »

Quite interesting: http://www.irishcentral.com/news/There-is-a-witchhunt--I-convince-myself-that-this-will-pass-134533003.html

The usual bits that annoy the heck out of one:



"Not a person"...

Also, apparently absolutely everything was fine, was great, mistakes were made, but everything was above board, ya, it was all good...actually, it's a bit anger-inducing:



The Central Bank was apparently not even slightly ready for the crisis:



And nearly everything was someone else's fault:



Mostly anger-inducing, actually, but worth reading.

cordially,
Scofflaw

There is a certain element of truth in what he says. I also believe the authorities knew a lot more than they are pretending e.g. the €7bln transfer from IL&P to Anglo.

Scofflaw

liammur wrote: »

There is a certain element of truth in what he says. I also believe the authorities knew a lot more than they are pretending e.g. the €7bln transfer from IL&P to Anglo.

Could well be the case - although I think he does add a rider to at least one of the claims of government knowledge that they "must have done". Assuming the Irish government "must have known" things simply because they ought to have known them isn't necessarily a safe assumption, I think.

cordially,
Scofflaw

liammur

Scofflaw wrote: »

Could well be the case - although I think he does add a rider to at least one of the claims of government knowledge that they "must have done". Assuming the Irish government "must have known" things simply because they ought to have known them isn't necessarily a safe assumption, I think.

cordially,
Scofflaw

I would agree, however, Anglo went to AIB and B of Irl before they went to IL&P for the €7bln. The other 2 banks refused them for differing reasons, but is widely agreed that all knew about that transaction. This is precisely why it is hard to believe everything the authorities tell us when they pretend they knew nothing about this. Canade Life were a little worried about this matter in the recent discussions.

tipptom

I think their is a bit of a witchunt on him to be honest,he offered to hand over practically every thing including his pension which most people would not offer the pension as this is his familys security.This should have been enough to satisfy any bank towards his debts in these time,I wish all the developers were as forthcoming in their repayments.Interesting to see the comments at the end of the article from Simon Kelly and a "Sean Dunne".Be nice to see these boys hand back their multi million € houses and pensions.I think David Drumms offer should have been accepted with the proviso that he come back to Ireland with immunity and he give a full and truthful whistleblowers account of what went on to a public hearing which would pull Seanie and the rest from AIB and BOI out of their lairs.

Dannyboy83

Haven't had a chance to finish reading it yet, but I've found it quite interesting.

At worst, he has a well thought out story/alibi.
A lot of what he says corresponds with what I remember from the time, e.g. the 20:20 report.
http://www.rte.ie/news/2006/0322/economy.html

I do get the feeling that he is telling the truth, at least in some parts, and equally, without sounding CT-like, people in authority in this country are using him as a shield to deflect from themselves.
He has made a number of assertions there which should be quite easy to check and are quite damning if they are true. I'm confused as to why they haven't been made public knowledge before - but perhaps they have and I'm simply not as well read as others here.

To me there appears to be a much bigger level involvement on behalf of our state than I was previously aware of. The usual portrayal is of a bunch of Anglo cowboys operating of their own accord. What he is saying in that interview doesn't correlate with that portrayal on the whole, and in particular post-September '08.

An air traffic controller who went to sleep on the job and caused a plan crash would probably get a jail sentence.
I do wonder why people such as Brian Cowen, members of the Central Bank & Friends are not answering questions on this.


I am utterly puzzled as to what Brian Cowen was actually doing all those years as MoF?
Was he literally on the tear for several years?

Dannyboy83

Agent J wrote: »

He still claims Anglo were facing a liquity problem & not a solvency one.

A good explanation, imo, available here:
http://www.boards.ie/vbulletin/showpost.php?p=75657946&postcount=43

What is inexplicable is the the "mistake" that Brian Cowen made in believing that the sovereign position of the Irish state was iron clad.

I could just about extend the benefit of the doubt to Lenihan.
Cowen has no such excuse.

Cardinal Richelieu

tipptom wrote: »

I think their is a bit of a witchunt on him to be honest,he offered to hand over practically every thing including his pension which most people would not offer the pension as this is his familys security.This should have been enough to satisfy any bank towards his debts in these time,I wish all the developers were as forthcoming in their repayments.Interesting to see the comments at the end of the article from Simon Kelly and a "Sean Dunne".Be nice to see these boys hand back their multi million € houses and pensions.I think David Drumms offer should have been accepted with the proviso that he come back to Ireland with immunity and he give a full and truthful whistleblowers account of what went on to a public hearing which would pull Seanie and the rest from AIB and BOI out of their lairs.

He changed his Malahide home into his wife name and the house in Skerries into his sisters.........I just wish he was as clever with Anglo money as he was with his own.

Crazy Horse 6

It's amazing how deluded this guy is. Defo in the Bertie delusion bracket.

coolshannagh28

There s a lot of truth in the interview,the maple 10 deal had to be known to the government and must be a fraud on the shareholders .T he bank guarantee was a typical ff big sweeping bluff which they couldnt back up ,and rest assured that in a couple of years when all the numbers are in aib will be worse than anglo . He is no saint but is definatly the whipping boy

Slydice

interesting update on it by the namawinelake blog:
http://namawinelake.wordpress.com/2011/11/27/david-drumm-finally-breaks-his-silence-on-anglo-nama-and-the-irish-financial-crisis-if-my-case-is-indicative-of-how-they-are-being-measured-taxpayers-money-is-being-absol/

UPDATE: 28th November, 2011. Laura Noonan at the Irish Independent reports has been a response from unidentified “sources close to the bank [Anglo]” to the 10,000-word David Drumm interview. These unidentified sources dismiss David’s claims that reckless lending was not the cause of Anglo’s collapse as “ridiculous”. Presumably these unidentified sources are not working for PwC which certified the loan valuations at the end of 2008, or Donal O’Connor and Lars Bradshaw which checked PwC’s work. Or auditors Ernst and Young who signed off the 2008 accounts after presumably sample checking loans and loan documentation. There has been no response from Government which according to the Drumm interview seems to have been at the heart of the Maple 10 transaction. Maybe we might get an attributed comment later in the day. The Independent does say that it “understands that Anglo would have recouped more from that settlement than the net proceeds the bank expects to get from drawn out bankruptcy proceedings in the United States.” Why would a company which we as a nation own 100% take such an uneconomic decision?

murphaph

He's no angel and is a key player in the whole banking collapse BUT it would be unwise to write everything he says off. He is now "outside the golden circle" and may well be prepared to spill the beans on others who bear at least as much responsibility.

Agent J

Dannyboy83 wrote: »

A good explanation, imo, available here:
http://www.boards.ie/vbulletin/showpost.php?p=75657946&postcount=43

Oh i can understand someone mistaking it for a liquity issue at the time.
Well for AIB and BOI.. not really for Anglo ( Not with the information we now know was available internally)

However it seems that he still holds on to the belief that it was liquidity & not solvency for Anglo.

tipptom

murphaph wrote: »

He's no angel and is a key player in the whole banking collapse BUT it would be unwise to write everything he says off. He is now "outside the golden circle" and may well be prepared to spill the beans on others who bear at least as much responsibility.

That would be my point to,this guy would be worth more to the state by giving some debt forgiveness for his understandable loan at the time and allowed come back with his family and give an honest account of the roles of the politicians,regulaters,developers and top bank personel rather than some massive publicity stunt for a miniscule sum in the greater scheme of things,I think this would be a better repayment to Ireland in the long run.

Unshelved

I've a theory about David. He's not from the fee-paying school, SCD-type background as a lot of the other players in our downfall. He's from a pretty ordinary (but very respectable) family and went to the local school. He was never part of any old-boys' network where old school buddies who might be lawyers or bankers or judges come out of the background to help one of the "guys" in trouble.

I remember wondering when he got the CEO at Anglo whether he was hired essentially as Seanie's yes-man. He's certainly been made a scapegoat of - there are a lot more who are equally to blame.

It's not surprising that he feels hard done by, when the likes of Simon Kelly get to continue their previous lifestyle, with even their kids' school fees being paid for by NAMA. I'm not sympathetic - he needs to accept responsibility for what he's done - but when no-one else is doing so you can understand why he feels victimised.

I guess David was never really part of the in-crowd. He was just brought in as Sean Fitzpatrick's nodding dog. He was very highly paid for doing so, in the process allowed himself to be talked into losing the run of Anglo while it went down the toilet, and now he's paying the price.