Drumm arrest: This could be start of another lengthy battle

Simon Carswell

Washington Correspondent

David Drumm's hiring this year of a Boston lawyer better known for her high-profile white-collar criminal defence work was an indicator of the bigger fight the former Anglo Irish Bank chief was expecting.

That fight arrived on Saturday with his arrest in Massachusetts by US Marshals acting on an extradition warrant that started with the long-running Garda investigations into the bank Drumm once ran.

Attorney Tracy Miner of Demeo was hired in February, the month after he lost his bid for financial freedom in Boston bankruptcy courts.

She came on record for his appeal against a blistering bankruptcy ruling that denied him a write-off of more than €10 million in debts.

More significantly, she was retained by Drumm the month after it was first reported that the State had begun extradition proceedings against him arising from the criminal investigations at Anglo.

Miner told The Irish Times at the time that neither she nor Drumm had received notice of any extradition proceedings against him but she said that she would defend him if such proceedings were taken.

Well, they may not have received much notice with his arrest on the Saturday of a holiday weekend in the US. Monday is Columbus Day in the US so Drumm’s first court appearance will come on Tuesday.

A spokeswoman for the US attorney in Massachusetts, Carmen Ortiz, said Drumm would remain in custody until his hearing in court on Tuesday. She would not say where he was being held.

The John Joseph Moakley US Courthouse is a brick and glass fortress near the financial district out of where Drumm ran Anglo’s US business a decade before he became the bank’s chief executive in 2005.

It is also a short walk from the John W McCormack US Post Office and Court House where Drumm has battled with his former bank, now Irish Bank Resolution Corporation, for the past four years.

The bank has so far won that fight, arguing successfully that Drumm’s failure to disclose cash and property transfers of more than €1 million to his wife was an attempt to defraud it as a creditor.

The Moakley Courthouse, on Boston’s waterfront, is home to the US District Court where Drumm will appear on Tuesday when he makes his first court appearance since his arrest.

The large building was scene of two recent cases that drew national and international attention: the trials of Irish-American Boston gangster James “Whitey” Bulger and Boston Marathon bomber Dzhokhar Tsarnaev.

Drumm's lawyer will be familiar with the courthouse. In 2002 Miner defended former FBI Boston agent John Connolly in a US federal racketeering trial in which he was convicted of tipping off Bulger about his arrest, permitting him to go on the run for 16 years.

For many, Drumm’s arrest has been years overdue. It is approaching seven years since he resigned from Anglo as it inched towards the precipice. Since then, two of his former close colleagues at the bank have been convicted of a share-buying scheme, of which the judge in that trial described Drumm as the “instigator and author.”

Those two colleagues were spared jail last year owing to the regulator’s approval of the scheme but three other former colleagues were sentenced to as long as three years by another judge in July for concealing bank accounts and defrauding the Revenue Commissioners.

Drumm has been in the US for six years and has refused to return to Ireland to be interviewed by the Garda investigations into Anglo that have spawned further charges against his former banking colleagues.

He did send an extensive opening statement to the Oireachtas banking inquiry but refused to testify in person, offering to appear via video link instead. The inquiry committee's legal team advised that appearing from outside the state could give Drumm an advantage.

The offer was rebuffed in July on the basis that the State was seeking his extradition, and so too was publication of his statement at the insistence of the Director of Public Prosecutions.

The US authorities have received an extradition file from their counterparts in Ireland, outlining up to 30 criminal charges they wish to bring against the former bank chief executive and including details of the seriousness of the alleged offences in Irish law.

Drumm has railed against the political and media establishment at home. He told New York-based Irish journalist Niall O’Dowd in an interview conducted during the summer, published overnight on his website Irish Central, that he would never get a fair trial back in Ireland. He accused the media and politicians of criminalising him “repeatedly and exhaustively” while he had never been charged with a criminal offence.

“It is abundantly clear that I have been made a scapegoat for all of the problems Ireland has endured since the financial crisis of 2008,” Drumm told O’Dowd.

“I have always accepted my professional failings but I will not be bullied and criminalised for political advantage and to deflect blame from others.”

Drumm’s lawyers could point to Judge Martin Nolan’s “instigator and author” appraisal in there being a pre-determined view of his role at Anglo in making his case against extradition.

He could also argue about political motives driving the prosecution against him, though in fairness the extradition proceedings started long before the recent frenzy of speculation about when the next general election will be held.

Still, the appearance of one of the central figures of the Irish banking crisis that toppled Ireland into an international bailout in a courtroom will play well for government parties heading to the polls.

Drumm appears to have been alert to the political currents swirling around him. On the second day of his bankruptcy trial last year, Drumm testified in Boston about “the political nature” of his ongoing legal battles with his former bank.

One bugbear that consistently infuriated Drumm was the refusal of the bank to accept his offer of a settlement of his debts in 2010 and again in 2013 when it was racking up huge legal fees pursuing him.

Because of the political sensitivity around the bank's relationship with its former directors, it was written into IBRC's framework agreement with the Department of Finance that any decisions concerning these matters had to be signed off by the Minister.

The settlement talks between Drumm and the bank two years ago came to nothing, fading away not long after his notorious “Anglo Tapes” telephone conversations were aired publicly. Settlement was obviously impossible amid such public opprobrium.

Drumm has continued fighting the bank on the debt front right up to the present. He awaits the ruling of a US District Court on his appeal against the damning rejection of his discharge from bankruptcy.

He will, however, appear in that same court first on Tuesday in relation to an entirely different matter: extradition back to Ireland.

The hearing represents a sharp escalation of the former Anglo chief’s legal headaches, moving abruptly away from a civil setting.

This could be the start of another lengthy courtroom battle but the stakes here are far higher: Drumm’s long-sought return and criminal trials at home.