DUBLIN — In the summer of 2008, as financial contagion swept around the globe, a small bank in Ireland, Anglo Irish Bank, which had made its fortune advancing spectacular loans to developers, buckled.
It had to be nationalised. The Irish government eventually ‘bought’ €34.1bn worth of Anglo loans for €13.4bn—a loss of €20bn.
Shortly after this shattering event, in 2009, the bank’s former chief executive, David Drumm, left town. He and his wife and two kids moved to America, where they divided their time between a $3m house in Cape Cod and another residence in the Boston suburb of Wellesley.
As millions of people in Ireland lost jobs, houses and life savings in the years that followed, Drumm became a focus for their anger, a potent symbol of both the immorality and untouchability of the Irish bankers.
Appeals for Drumm to return home and co-operate with a series of criminal trials, a banking enquiry or be questioned by the police all fell on deaf ears.
In an interview in 2011, Drumm said: “Why would I go somewhere which has stated—politicians, senior ministers and even High Court Judges—have more or less stated, that there is a witch hunt on, and, ‘We are going to get him’. Why would somebody put their family at risk by signing up for that?”
If Drumm hoped the whole unfortunate situation would go away, he was to be disappointed. Ireland formally applied to extradite Drumm, and he was arrested in October last year, and since then he has been languishing in prison in Boston.
It now appears that five months in the U.S. prison system has convinced Drumm of what appeals to his better nature could not—that it is time to return home and face the music. Drumm last week dramatically dropped his fight against extradition from the U.S. and agreed to return to Ireland, where he is accused of various crimes.
In an affidavit filed with the court, Drumm said he would continue to contest the charges in the Irish courts.
Drumm could be on his way home by the end of the month.
The Irish Taoiseach (prime minister) Enda Kenny, was among those expressing happiness at the news, saying, “I’m glad that he has decided to withdraw his objection to the extradition claim and I expect that there will be a very major trial for Mr Drumm when he returns here to Ireland.”
Indeed, with Kenny facing a general election on Feb. 26, widely perceived as a test of his handling of the post-crash era economy, the news of Drumm’s return home could not have come at a better time.
There has been much salivating at the prospect of Drumm finally being forced into the dock.
The satirical Irish website Waterford Whispers accurately captured the mood, writing, “David Drumm’s return to Ireland has been greeted by a huge welcome party at Dublin Airport. Many of those queuing brought with them iron bars and pitchforks.”
Drumm gave a jailhouse interview to Tom Lyons of Ireland’s Sunday Business Post in which he bizarrely maintained that he was not a ‘fugitive’ and that a ‘demand’ had never been made for him to return home. In fact, the Gardai (Irish police) sought to interview him as far back as 2010 and ministers have been calling on him to return for years.
Speaking to The Daily Beast, Tom Lyons said that Drumm—who argued in his interview that “the role of the chief executive is to carry out the instructions of the board and I did my best in considerably difficult circumstances”—makes “a very convenient scapegoat” for the general woe Ireland has endured since the onset of the financial crisis.
One of the lightning rods for public anger with Drumm was his role in what became known as the “Maple Ten affair” in which Anglo lent 10 powerful investors money to buy shares in Anglo in an apparent attempt to prop up the share price in July 2008.
However, two other directors of the bank found guilty on 10 counts of providing unlawful financial assistance to the Maple 10 were not jailed after a judge said it would be unjust to imprison them given that the financial regulator gave the “green light” to the illegal share-buying scheme for which they were convicted.
The judge said the scheme to unwind the Anglo stake of businessman Seán Quinn—then Ireland’s richest man—was “a blatant affront” to the law but concluded that he could not give custodial sentences as “a State agency led them into error and illegality.”
It was an extraordinarily blunt and public condemnation of the state’s role in the Anglo debacle.
As Lyons says, “The state wanted this problem [Anglo] fixed too. Drumm’s evidence could be very embarrassing for the state. He has the material, he is very intelligent, and he has had a long time to think about what he will say.”
One of the country’s leading debt relief campaigners, Diarmuid O’Flynn, who is standing in the forthcoming general election, told The Daily Beast, “The Drumms of this world have to be brought to justice at some stage. But putting them in prison costs us more money. Instead, they should be stripped of every asset they have, and left with nothing but a council house and the dole.”