Refusal of former Anglo staff to give passwords delays inquiry by two years

FORMER ANGLO Irish Bank staff who have failed to give the bank passwords for protected documents have delayed a two-year inquiry by the Director of Corporate Enforcement, the High Court heard yesterday.

The director had sought passwords for 50 of some 800 password-protected documents as those 50 appeared most relevant to the probe but Anglo could only supply 20 of those.

Because some “very detailed password encryption” was involved, working out the passwords was “a very time-consuming process” for the investigators, Paul O’Higgins SC, for the ODCE said.

The two-year investigation into Anglo by the ODCE, assisted by the Garda Bureau of Fraud Investigation, has been extended by the High Court to April next but is expected to be “substantially complete” by the end of this year.

Some files will be sent to the DPP within weeks while others will be forwarded in the first quarter of 2011 for the purpose of deciding on prosecutions, Garda Supt Eamonn Keogh told the court yesterday in an affidavit.

Mr Justice Peter Kelly said he hoped the court could be informed in April about the issue of prosecutions. It seemed to him a decision on whether prosecutions will be brought against any Anglo officials could be taken soon after completion of the investigation as the DPP already has lawyers involved with it.

Earlier, the judge heard Anglo does not have the passwords necessary to access some specific password-protected or encrypted documents. The failure of certain Anglo personnel who have left the bank to give it those passwords, is one of the factors which have delayed the probe.

The judge was also informed some 125 statements have been taken to date and this was also proving very time consuming, with an average of three days required for each statement and some taking “a lot longer”. One statement was 120-pages long while statements from an important witness took six months.

A huge volume of electronic and paper documents has also had to be analysed and mutual assistance procures in various jurisdictions have had to be used.

Th primary purpose of the processing of millions of individual electronic records is to produce an accessible and traceable record of the files held by, and the interactions between, some 20 senior persons in the bank, Supt Keogh, who has been seconded to the ODCE, said.

Mr Justice Kelly said, while it was “regrettable” the investigation was taking so long, that had to be balanced against the complexity of the probe, the volume of material involved and the difficulty trying to extricate electronically stored material without the necessary passwords.

In the circumstances, the judge said he would grant the director’s application to extend the inquiry by a further six months when he hoped the court would be told it had been completed.

Of five matters being investigated, the court heard the investigations into three would be substantially completed by the end of the year. The others were likely to be complete by the end of March 2011.

Four primary events are being investigated for the purpose of establishing if they breached provisions of the Companies Acts and/or common law. They are:

the financial assistance by Anglo in 2008 to a number of persons to enable them buy its shares;

Anglo’s loans to its former directors and the regular “warehousing” in Irish Nationwide Building Society of some of those loans at the end of Anglo’s financial year;

the “back-to-back” deposit arrangement between Anglo and Irish Life Permanent for the benefit of Anglo at the end of its financial year in September 2008.

The investigation into all three events is expected to be completed by the end of this year.

The fourth event relates to a loan to an Anglo director and that probe is expected to be complete by the end of March next. The investigation into a fifth issue – whether the four events involve breaches of the EC regulations – is expected to complete soon after March 2011.