Drumm called meeting of ‘war cabinet urgency’, court hears

David Drumm wrote to senior Anglo Irish Bank colleagues and suggested they meet to discuss key issues "with a war cabinet urgency" in November 2008, a jury has heard.

In an email sent on November 12th, 2008, the bank’s then chief executive said a large group should get around the table to manage key issues which it was facing at that time.

“People who can contribute to strategic discussion, keeping the tone light, but with a war cabinet urgency,” Mr Drumm wrote.

Mr Drumm’s trial has heard that he accepts that transactions worth €7.2 billion between Anglo and Irish Life & Permanent took place in 2008 but he disputes they were fraudulent or dishonest.

Matt Moran, former chief financial officer at Anglo, was continuing his evidence on day 35 of Mr Drumm's trial at Dublin Circuit Criminal Court.

Mr Moran told Mary Rose Gearty SC, prosecuting, that when John Bowe told him of the €7.2 billion transaction, it was "larger than he thought".

He said Mr Bowe, former head of capital markets at Anglo, said something to the effect of: "You should ring ILP, you should ring Denis Casey to thank him."

Mr Casey was the chief executive officer of ILP at the time.

This conversation took place in Mr Drumm’s office, on the evening of September 30th, 2008.

Mr Moran told the jury he had thought the ILP transaction amount would be “less than seven, maybe above three, somewhere in between”.

He said the government bank guarantee, issued on the same day, took a little pressure off Anglo’s funding position. However, he said if the ILP transaction had not been done, the balance sheet would have been perceived more negatively.

When asked by Ms Gearty how negatively, he replied it was difficult to say, adding that deposits were being closely watched by the market due to the general banking crisis.

Financial regulator

Mr Moran told the jury he was concerned whether the ILP transactions had been discussed with the financial regulator, and said Mr Drumm and Willie McAteer, former director of finance at Anglo, assured him they had been.

“David said Willie had discussed it with Pat Neary and Con Horan in a meeting at the regulator’s. Willie said something along the lines of they would be managing the balance sheet,” he said.

Ms Gearty asked the witness if he had personally asked Mr McAteer about his conversation with the regulator.

“I did. He [the regulator] said something to the effect of, ‘Fair play to you, Willie,’” Mr Moran told the jury.

The jury also viewed an email written by Mr Drumm in September 2008, wherein he told Anglo colleagues it was “crunch time for us”.

“A massive push is needed guys, look under every rock,” he wrote, as liquidity levels at the bank continued to plummet.

Mr Moran told the court that he believed “a massive push” referred to the need to urgently reduce the level of lending at the bank.

“My interpretation of looking under a rock is that it means to look at all options and make sure the level of lending can be managed to a minimum,” he said.

Mr Drumm, with an address in Skerries, Co Dublin, has pleaded not guilty to conspiring with former bank officials Denis Casey, William McAteer, John Bowe and others to defraud depositors and investors at Anglo by creating the impression that deposits in 2008 were €7.2 billion larger than they were.

He has also pleaded not guilty to false accounting on December 3rd, 2008, by furnishing information to the market that Anglo’s 2008 deposits were €7.2 billion larger than they were.

The trial continues.