Bruce Arnold

Critic of Public Affairs, writing about art, theatre, music and politics

NEWS STORY: David Drumm

INTRODUCTION to “Shabby episode an example of all that's wrong in sorry State”:

I was approached on David Drumm’s behalf by an intermediary in the autumn of last year. David Drumm was frustrated by the way the media were portraying him simply as the villain who had wrecked Anglo-Irish Bank.

Making scapegoats to bear the blame for Ireland spiralling down into huge debt has been Cowen’s Government’s response to its own mismanagement of public affairs. It has not otherwise been directed at bankers, who are central to the economic collapse. It has led to a vindictive pursuit of developers who themselves have been the victims of slack management. And it has left ordinary Irish men and women with a massive clear-up operation and a load of debt.

Putting all this unfairness right was the purpose of an article on 6 November 2010. While protecting the anonymity of my source at that time I gave his account of how Brian Cowen knew that the fiscal roof was falling in when, as Minister for Finance, in late 2007, he involved himself in the Anglo-Irish Bank crisis. He set up a kitchen cabinet to advise him on the detail and to provide inside information about the Bank’s circumstances. These were becoming perilous.

Cowen was claiming that he first heard of the problems in Anglo-Irish in September 2008. He has since accepted that he was at an Anglo-Irish Board dinner in April of that year but denied that the discussion was about the problems faced by Anglo-Irish Bank.

His denials, challenged in last November’s article on the basis of David Drumm’s recollections, include the major contribution of Sean Quinn, of Quinn Insurance, through heavy gambling at the time with “Contracts For Difference” which ultimately came to represent a quarter of Anglo-Irish Bank shares.

Brian Cowen has denied he promised intervention with the National Treasury Management Agency to get them to put deposits with Anglo. It is acclaim weakly supported by Michael Sommers, who talks of having no recollection.

My exclusive November article also raised questions about the former Financial Regulator, Pat Neary, and his close contacts with the Bank, though his hand was stayed, apparently, by sustained protection of Sean Quinn. I revealed that the Financial Regulator knew that Quinn was taking money from his insurance company – picked up by the Bank’s auditors, PWC of Belfast – and that this was illegal on two counts.

The Financial Regulator, the Department of Finance, Morgan Stanley and Anglo-Irish Bank all knew that the CDFs spelt death for the bank. Pat Neary knew enough to tell a member of the Bank’s Board that Sean Fitzpatrick was talking too much and too openly about the Quinn stake.

These issues, put to Brian Cowen at the time, elicited the response that he would have nothing to say where the source was ‘anonymous’. As a result of this week’s events, including the appearance of The Fitzpatrick Tapes, a book based on interviews with Sean Fitzpatrick, and the collaboration on articles by myself and Jason O’Toole of the Irish Daily Mail, this is no longer the case. And David Drumm’s arguments demand a full response.

The Fitzpatrick Tapes led to this week’s confrontation in the Dail by Opposition Party leaders. I argue that the book has all the appearances of a tailor-made script for the Taoiseach, giving him three events which he could easily answer while not answering: these are the St Patrick’s Day phone call, the game of golf and the Anglo-Irish Bank Board dinner.

On the third of these, where David Drumm argued with Brian Cowen the case for help in rescuing Anglo-Irish Bank, there were and are sharp differences. The Taoiseach’s account cannot be challenged on the other two, begging the question why more interrogation did not enrich the book. In most developed countries these revelations would lead to immediate resignation, if not the fall of the Government.

Continue to:
- full extended article
- edited version which appeared in Irish Independent (15/1/11)