What Happened To Ireland’s Recession Bankers?
As news springs up this week of the Sean FitzPatrick and Denis Casey trials, it has brought memories of the financial crash in Ireland and of the dire economic consequences that followed it. The Casey trial is one of a few that have seen bankers doing jail time; in this case some two years and nine months, which have now been served. It begs the question; who was actually penalised for their offences? It’s an interesting story, and tells of the powers of the bankers that helped bring the country to its knees.
Going back to Casey, who was accused of conspiracy to defraud back in 2016. First off, just look how long it took for a verdict to be given; 8 years. Even the high profile murder case of Patrick Hutch was 5 years quicker than that. How can this be allowed to happen? Casey was accused of hiding the true value of Anglo Irish Bank’s financial position shortly before the 2008 collapse. Some €7.2bn funds were missing from the loans book, yet Casey has escaped with no fines and a short stint in prison relative to the gravity of his crimes. He isn’t alone in this scenario.
Enter David Drumm, Anglo’s Chief Executive and arguably a key component in the reason for the failing of the bank (though the judge who prosecuted him said otherwise). He was also accused of manipulating funds, or at least allowing them to be manipulated, in a bid to make the company seem more profitable/ stable than it really was. In fact, this was done rather expertly. In the year ending September 2008, the bank posted pre-tax profits of €784 million. Yet, by December, their share price had plummeted by 98% and the government was in the stages of nationalising the failing lender. They did this through moving money around in a complex fashion right before year end, to mislead the EY auditors of the true finances of Anglo. Disgraced, and reportedly bankrupt, Drumm moved to Boston. Drumm’s meagre attempts at defending himself revolved around trying to keep the bank afloat, but this was scoffed at. In the end, he was charged with some six years in jail for conspiracy to defraud and false accounting.
Next in line we meet William McAteer. His position during the period of Anglo’s demise says it all; Group Finance Director and Chief Financial Officer. Again, he was implied for the same reasons as aforementioned. Final conviction? Community service. He now resides in Tipperary on a meagre €90,000 per year pension that is split with his wife.
We also find John Bowe, the man heard in the now infamous ‘Anglo Tapes’. There is less evidence against him, and doubts whether he was implied at all, yet he was sentenced to two years in jail nonetheless.
Last, though certainly not least; Sean FitzPatrick, the former Chairman of Anglo. Was he a ringleader? Was he blind to what his upper management were getting up to? In any case, he was acquitted of all charges, getting a mere slap on the wrist.
Whilst the honest majority of bankers in the country can’t be blamed for the recession, the fraudulent activities of the above individuals and others like them contributed to Ireland’s economic woes. The reckless lending led to a credit-fuelled property bubble that, when burst, sent ripples through our economy.
Since 2008, we have seen a plethora of legislations and initiatives with catchy acronyms introduced to protect our economy from a similar occurrence. Yet, industry leaders are still uncertain that this is sufficient. The Director Governor of Prudential Regulation of the Central Bank of Ireland (what a mouthful) Ed Sibley has criticised that more still needs to be done. With the last major crash being influenced by the fall of the Lehman Brothers, could the Irish economy still be exposed to US uncertainty today? That’s a question for another day.
By Alex Lohier – Business Editor