NOD: Do you think you will ever see Ireland again?
DD: I hope so.
NOD: People say well why don’t you come back?
DD: I would not be treated fairly. This is a country that I, I spent 16 years in the bank, I was beyond loyal to that bank, maybe too loyal, and a country that I believed in 100 percent, marketed 100 percent as I was marketing the bank, I was marketing the country, everywhere I went. Now the way that I am being depicted by that country, by the country’s media, or participants is completely and utterly unfair. I am here trying to make a living and raise my family, which I am entitled to do. Why would I go somewhere which has stated, politicians, senior ministers and even High Court Judges have more of less stated that there is a witch hunt on and we are going to get him, why would somebody put their family at risk by signing up for that.
NOD: Being viewed as public enemy number one or two, but do you feel that this is a completely incorrect characterization of your role in Anglo Irish, obviously a critical part of that role was your relationship with Sean Fitzpatrick. What is your opinion of him now?
DD: Perspective, the bank for 21-years in a row increased its profits; it went from making nothing to making a billion. But it wasn’t a flash in the pan that happened for two years, like some sort of scheme. The bank started in very humble beginnings, City Dublin Bank and Irish Bank of Commerce merging in the mid-1980s and grew it’s business progressively over time, first in Ireland, then into the UK and then ultimately into the U.S. doing the same thing everywhere. There was no big change in the model or running after real estate of what have you. The bank was always a real estate lender. If you got as far as 2007, as you said, the profits of the bank that year were a billion. At the same time the end of 07 start of 08, the global financial crisis began and at the same time the Irish housing market had begun to correct, it was overbuilt.
The governor of the Central Bank said to me during the earlier part of 2008 that Ireland could handle its own correction in the housing market, that it was stable enough to do that but could not handle both; i.e. the international meltdown and its own domestic correction. The fiscal situation was appalling at that stage in Ireland because all of the tax money that had come in from this boom had been spent expanding the public purse and it was very hard to turn that profit back.
The bank was a causality of that, not out of recklessness but because we did have a correction in Ireland, as every bank was going to have. We ran out of cash because the international money markets that couldn’t lend us enough, stopped lending us any and that is what happened in 2008. When confidence goes in a bank, it’s over and the year 2008, I focus on 2008 because it was not a problem in 2007. When the confidence goes in a bank, your entire balance sheet relies on lenders, international banking lenders, lending to you and that that goes, it’s over. That was not just the problem for Anglo, it was the problem for Allied Irish Bank, for Bank of Ireland, for the other banks and ergo a problem for the State, because it had to protect it’s banking system, everybody was working together to that.
Now what’s happened after that, when we move into 2009 was Ireland made some decisions, which really have come back to blight us.
One of them was transferring assets from the banking system into NAMA and marking all of the assets to market. Recognizing losses that no other country did, here in the U.S they have just more experience and they had seen this before, no bank was forced to mark all its assets down at a time when you couldn’t sell anything. The UK didn’t do it, nobody in Europe did it, so Ireland stood alone and by marking this thing down Ireland separated itself down.
Now the cost to me, personally because I was a member of the Anglo team, was Anglo’s loss were marked down by that transfer to Nama in 2009. A great way to juxtaposition that is if you look at the sale of the U.S. loan book of the bank, they got more than 80 percent on the dollar.
NOD: What are they getting on NAMA?
DD: They marked it down by 60 percent, who knows what they will get. But that was artificial, a state owned bank, selling assets to a state owned entity at a price that they made up.
NOD: Let me ask you about David Drumm and Sean Fitzpatrick, On theory is that you were a young guy, who was plucked from relative obscurity, and made CEO right as the ship began to sink and that FitzPatrick did that very deliberately.
DD: Sean was a very, very powerful person; he was a controlling person not just of the executives, but of the non-executives. He ran the board, in a highly premeditated, controlled manner there were meeting before board meetings to make sure he got what he wanted and so on. Sean was like that before I became CEO, he was 18-years as CEO and he wasn’t planning on changing. So as chairman he was an executive chairman for all intents and purposes and a highly controlling one, there is no doubt in that. Anyone that knows him, knows that is true.