Anglo executive believed regulator ‘not looking’ at ILP loan

Drumm trial hears extracts of 2008 phone conversations between staff at Anglo, Financial Regulator and ILP

Former Anglo Irish Bank chief executive David Drumm arriving at the Dublin Circuit Criminal Court on Wednesday. Photograph: Collins Courts

Former Anglo Irish Bank chief executive David Drumm arriving at the Dublin Circuit Criminal Court on Wednesday. Photograph: Collins Courts


A senior Anglo Irish Bank executive told colleagues that the Financial Regulator was “more or less...not looking” at a proposed short-term loan of €500 million between Anglo and Irish Life & Permanent (ILP).

During a conference call on March 25th, 2008, John Bowe said: “It’s well worth doing, giving ‘Permo’ half a billion. It’s not on their radar anywhere. The regulator, is you know, more or less saying, ‘look, I’m not looking.’”

The jury at the trial of former Anglo chief executive David Drumm on Wednesday listened to extracts of phone conversations between staff at Anglo, the Financial Regulator and ILP in March and September 2008.

Mr Drumm’s trial for conspiracy to defraud, in the amount of €7.2 billion between March and September 2008, has now entered its third week at Dublin Circuit Criminal Court.

Mr Drumm (51), 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 “dishonestly” creating the impression that deposits were €7.2 billion larger than they were in 2008.

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.

Unusual amounts

Witness Matt Cullen, former director of treasury at Anglo, agreed with Paul O’Higgins SC, prosecuting, that the amounts involved in the loans between Anglo, ILP and Irish Life Assurance in 2008 were unusual. He said he had never been involved in loans of that size before.

Mr Cullen described discussions between Mr Drumm, the Financial Regulator, the Central Bank and executives in other banks in late March 2008, as to how Irish banks would help each other as global markets went into meltdown.

The court heard a recorded conversation between Mr Cullen, David Gantly, director of treasury at ILP, and John Bowe, discussing the mechanics of the March 2008 transactions.

Mr Gantly said: “You put the stuff into us, we’ll put it straight back through our other boys. You just need an overnight transaction through month-end.”

During the conversation, on March 27th, which took place when Mr Gantly was at London City Airport, he said he was purposely not using names.

“Sure the walls have ears in this climate,” he said.

Mr Gantly suggested dividing the loan of €750 million into smaller transactions, saying: “It might look better to disguise it somewhat.”


When asked to explain this comment, Mr Cullen told the jury that if details of the proposed arrangement were leaked, it may affect confidence in the markets where rumours were circulating at the time.

The jury also heard Mr Cullen telling Mr Bowe during a call on September 18th, 2008, that Mr Gantly had said a higher amount for the September interbank loan was not a problem.

“I said it could be higher. He [Mr Gantly] said it’s not going to be a problem. If we ask for six, I think they’ll do it. Because, as they see it, you might as well be hung for a sheep as a lamb,” Mr Cullen says on the tape.

Mr Cullen then added that Mr Gantly mentioned ILP would be looking for a favour from Anglo in return. “He was asking, you be there for me at the end of the year.”

Mr Drumm accepts the facts of the 2008 transactions between Anglo and ILP but he disputes that they were fraudulent or dishonest.

The trial continues before Judge Karen O’Connor and a jury.