Anglo Irish Bank big admits they hoodwinked Irish government over bailout amount
Executive picked bailout figure “out of his a...” he tells colleagues on tapes
In a sensational development, John Bowe, one of Anglo Irish’s top bankers, told a colleague in a recorded phone call that he pulled the $9.2 billion figure to bail out the bank “out of his arse” in order to keep government money coming and he knew the bank’s needs would be far higher.
The blatant attempt to hoodwink the government has caused shock and consternation in Ireland where calls for a major banking inquiry into the collapse of Anglo are now likely to be acted upon.
The tapes, from September 2008, just as the banking crisis hit after Lehman Brothers went broke, were revealed by the Irish Independent newspaper. Bowe worked in Anglo’s treasury department, where it is required by law that telephone calls are recorded.
The phone calls are between Bowe, the head of capital markets, and Peter Fitzgerald, the consumer banking head, who planned to seek a $9.2 billion (€7 billion) bailout. David Drumm Anglo CEO is also on later tapes with Bowe.
In the recording Bowe and Fitzgerald are keen to lure taxpayer’s money in to cover the failing bank but are wary about asking too much up front in case they frighten the government.
Bowe says “You get them (the government) to write a big cheque and they have to keep, they have to support their money.”
“If they (Central Bank) saw the enormity of it up front, they might decide they have a choice. You know what I mean?
"They might say the cost to the taxpayer is too high . . . if it doesn't look too big at the outset . . . if it looks big, big enough to be important, but not too big that it kind of spoils everything, then, then I think you have a chance. So I think it can creep up."
Fitzgerald, the Director of Retail Banking says: "Yeah. They've got skin in the game and that is the key."
In another tape, David Drumm, the former chief executive of Anglo Irish Bank urged fellow bankers to shovel the taxpayer money in as quickly as possible.
“We won’t do anything blatant, but . . . we have to get the money in . . . get the f***in’ money in, get it in,” he tells Bowe.
Critics say it is clear from the tapes that the men knew that the Irish taxpayer would have to stump up far more than the $9.2 billion which was essentially a lowball figure to keep the money coming.
The final total the taxpayer paid was over $40 billion. The men it appears conspired to keep the real early losses secret from the bank regulator who is dismissed as out of touch and who accepted the $9.2 billion figure.
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