Drumm said he would ‘punch’ Lenihan

Tapes reveal attitudes towards key figures in the banking collapse

David Drumm,  ex-chief executive of Anglo Irish Bank: ‘I don’t think he [Lenihan] gets it’. Photograph: Josh Reynolds

David Drumm, ex-chief executive of Anglo Irish Bank: ‘I don’t think he [Lenihan] gets it’. Photograph: Josh Reynolds


Anglo Irish Bank chief executive David Drumm said he would “punch” then minister for finance Brian Lenihan in a bid to secure funding for the distressed lender.

The remark was made by Mr Drumm during a conversation with head of treasury John Bowe on December 15th, 2008.

“I’ll probably punch him [Lenihan],” he said.

“And I mean punch him, as if to say ‘what are you actually doing? What’s this about having to go through due diligence? You made that decision on the 29th of September. You’ve told the f**kin’ world we’re all solvent.’

“‘Now can you protect your hundred billion guarantee of us by writing a two or three billion cheque and get on with it.’ So my goal tomorrow is to get that through to [Lenihan].”

The two executives then acknowledge that this would be “the cheapest cheque” the taxpayer would have to write for the bank.

Mr Drumm mimics how he plans to speak to Mr Lenihan at the meeting: “ ‘Do you understand? Can I teach you just one piece?’ Not in that language, obviously, but can I teach you one piece of banking here?’

“‘When you’ve guaranteed somebody’s entire liabilities, it is smart to write a very small cheque to stop them being called. Which bit of that don’t you get?’ I don’t think he gets it.”

‘Systemic importance’
Mr Drumm said in another recording it was “confirmed unequivocally” at a meeting with Department of Finance secretary general Kevin Cardiff that Anglo was of “systemic importance” to the banking sector.

The tapes – which were published in yesterday’s edition of the Sunday Independent – also detail a conversation between Mr Bowe and the bank’s chief financial officer Matt Moran during which they talk about how difficulties are not limited to their own institution.

“What is exercising Bank [of Ireland] more than anything else is why they’re being beaten up more than Allied [Irish Banks],” Mr Bowe said.

“They think that Allied have played fast and loose with lending money to every cowboy in town – apart from ourselves also lending money to every cowboy in town – they think they’ve been the sensible bankers and the market just doesn’t get it,” Mr Bowe added.

The executives also talk about the troubles of then-billionaire businessman Seán Quinn and are heavily critical of his affairs.

“He’s down just over a bill [€1 billion],” Mr Bowe said to Mr Moran. “Anybody even f**king listening to that. It is frightening.”

“The market is bigger than any man. It is the great leveller,” Mr Moran replied. “Yeah, it is, isn’t it?” Mr Bowe said.

Mr Moran then said: “You stupid c**t [Quinn]. He really put us at risk.”

Discussing Irish Nationwide Building Society with an unnamed English fund manager, Mr Bowe said he didn’t know whether the troubled lender’s chief executive Michael Fingleton “gets it” in terms of the crisis his institution was embedded in. The fund manager says he has met management at Irish Nationwide and that “things are terrifying” there. “If you’re asking me does Mr Fingleton get it, I don’t know,” said Mr Bowe. “I really don’t know. You know the guy is in his 70s.”

In a separate recording, Mr Bowe tells Mr Moran that Anglo officials would bring “good governance” to Irish Nationwide in the event of a merger. It is also claimed in the tapes published on Saturday that the last government allegedly went against advice from Merrill Lynch to nationalise Anglo Irish Bank immediately.

In a conversation between Mr Drumm and another Anglo executive in December 2008, Mr Drumm said financial consultants Merrill Lynch had “signed a death warrant” for the “basket case” bank and wanted it nationalised immediately.