Playing a round of golf with the banker
A number of issues on what is not known of the Taoiseach’s dealings with the troubled bank should be addressed
SO BRIAN Cowen did attend a golf outing in July 2008 organised by his friend Fintan Drury, which Seán FitzPatrick also attended, and “no discussions regarding Anglo Irish Bank took place”.
The only previous known contacts Cowen had had with FitzPatrick were two: dinner in a posh restaurant on Stephen’s Green and a phone conversation around the same time in March 2008, when Cowen was in Malaysia. On both occasions the conversation was about Anglo Irish Bank and, at least on one of those occasions, a favour was asked for.
At the March 2008 dinner, FitzPatrick complained that the National Treasury Management Agency (NTMA) had been refusing to deposit funds with Anglo Irish Bank, and Cowen said he would look into it.
The phone call had to do with a calamitous situation that had arisen concerning the bank when Seán Quinn was forcing the sale of 10 per cent of the bank’s shares at a time when the share price had dropped precipitously.
So what was the point of the golf outing? Why would Fintan Drury, board member of Anglo Irish Bank and close friend and adviser to Cowen, have arranged that event, if it had had nothing to do with Anglo Irish Bank? Anyway, what would they have talked about over four hours on the golf course and a few more hours over drinks and dinner? Would FitzPatrick not have complained that the agency was still refusing to deposit significant funds with the bank, for that is what had happened? Would Cowen not have asked about how the bank had dealt with the matter relating to Seán Quinn? Would he not have asked the Anglo directors how the bank was faring in the wake of the share price collapse on March 17th?
Cowen’s statement said there was “nothing untoward, no hidden or secret agenda and no concessions, favours or interventions requested or granted”. If so, wasn’t that odd? The previous time they had dined together a favour was asked and, while a promise was not made to confer the favour, an undertaking was made to “look into it”.
As for there being no hidden or secret agenda, since we are not told what the agenda was, of course it is secret and hidden. And, by the way, I am not stating or inferring that Fintan Drury, Brian Cowen or Seán FitzPatrick were up to anything improper, for there would have been nothing improper had the three discussed the matters I have suggested.
The Monday night statement also referred to a phone call which Cowen took from FitzPatrick shortly after March 17th, 2008. The statement said: “This phone call related to concerns Mr FitzPatrick had about the market situation in relation to the bank’s shares”, and this had to do with Quinn’s involvement with Anglo, and his gamble on contracts for difference.
The statement said that prior to taking the phone call from FitzPatrick, Cowen had spoken to the governor of the Central Bank. Cowen was therefore appraised of the issue. The statement said he told FitzPatrick he would refer the matter to the governor of the Central Bank and the Financial Regulator, and did so. As a consequence, a meeting was held on Good Friday, March 21st, 2008, between Anglo, the governor and the regulator.
But what was the point of the phone conversation? What was FitzPatrick looking for? What was it that Cowen referred to the governor and the regulator? That is a curiosity. But of consequence is what subsequently occurred: a golden circle was assembled to purchase secretly Quinn’s Anglo shares (or the shares to which he was committed to purchasing), thereby forestalling a further collapse of the share price. That transaction could have been illegal, and has been the subject of Garda inquiries.
Is it plausible Cowen did not inquire further about what had happened and, on inquiring, find out what was done was probably illegal? But there seems to me to be a further issue.
In May of 2009, Michael Somers, then head of the agency, told an Oireachtas committee: “We have always had certain reservations about Anglo Irish Bank . . . I am not breaching any confidence by saying now that we were always hesitant about Anglo Irish Bank. We came under great pressure to create a limit for Anglo and to place money with it. The largest limit we went to for Anglo Irish Bank was €40 million.”
Asked from where did the pressure come, he said “the bank”. This all happened in 2007.
Is it believable Cowen did not know of this at the time, and is it believable he did not then “look into it”, as he promised he would do in March 2008?
More critically, knowing of the agency’s reservations, did he follow through with any inquiries or strategies that might have saved the country from the ravages of the blanket guarantee in September 2008?