• Irish bankers face criminal charges; kleptocrats caught joking about own misdeeds
By Ronald L. Ray
The Icelandic way of dealing with financial fraud committed by bank executives is spreading to other countries of Europe, including now Ireland.
The Nordic island was the first country in decades to expel or imprison corrupt moneylenders oppressing the people, with incredibly positive results. A handful of other nations, notably Hungary, also have gone after the debt slavers. But add Ireland to the growing list of those which have found the courage to confront the problem of bankers conspiring to deprive honest citizens of their hard-earned wealth. After four years of investigations and public outrage, the Irish republic has charged six top financiers with crimes related to the collapse of Anglo Irish Bank (AIB) in 2008.
Although a number of financial institutions became insolvent and were nationalized in the collapse of 2008, AIB outdid them all. The bailouts for this company alone totaled €30 billion—around twice that in United States dollars at the time—and it still failed, saddling 4.5 million Irish citizens with the massive debt, about $13,000 per person. That was too much for the people, who demanded justice.
Finally, in July 2012, police arrested three former Anglo Irish executives and charged them with 16 offenses. They are accused of illegally lending the bank’s money to the “Maple 10,” a group of millionaire developers, states Irish Voice Reporter. The “10” were then to purchase stock in the bank to prop up the share price and convince depositors the bank remained sound.
This was brought on by then-CEO David Drumm making bad bets with his own stock in the organization. If he had then sold the shares, it would have led to an investor panic. Drumm fled to Massachusetts, possibly to avoid potential prosecution. The trial of the other three begins this month.
Even more sensationally, three additional high-ranking bankers were arrested in December 2013 and charged with crimes, including fraud, related to deceiving investors and the Irish government about the financial status of AIB. Conversations by John Bowe, Denis Casey and Peter Fitzpatrick were recorded by the bank’s security system—incredibly, with the men’s knowledge. They can be heard to joke and laugh about deliberately misleading the Irish government in 2008 and choosing a too-low figure of €7 billion for a requested bailout, in order to lure the government into committing larger sums later.
“[Y]ou get them to write a big check, and they have to keep—they have to support their money,” said John Bowe, former head of capital markets for AIB. The €7 billion was presented as a temporary bridge, “until we can pay you back. Which is never.”
According to the Irish Independent, Bowe’s lawyer had the chutzpah to claim, “[It] was not a case of self-enrichment and the prosecution was in the context of the banking system.” These three men appear next in court on March 12.
RT.com reports that a spokesman for the Sinn Fein party told Financial Times, “that the people must be prosecuted for their roles in collapsing the Irish economy,” in which the failure of AIB was a major factor.
Ronald L. Ray is a freelance author and an assistant editor of THE BARNES REVIEW. He is a descendant of several patriots of the American War for Independence.