00:00 Saturday 23 October 2010  Written by Editor

Drumm move a further blow for taxpayers

WHILE not disputing that he was legally entitled to do so, the move by former Anglo Irish Bank chief executive David Drumm to file for bankruptcy in the United States rather than face up to his financial responsibilities before the Irish authorities has added insult to injury for this country's taxpayers, who are picking up the tab for the mess Mr Drumm and others left behind in the failed bank and who will be paying off the tens of billions of euro in debts incurred for a long time to come.

To his credit, Mr Drumm had been trying to negotiate a settlement with the bank of his debts of €8.5 million, but it is understood that the last proposal he made would have left the taxpayer with a €4 million shortfall to make up. In these straitened times, such a settlement would most likely be reluctantly, but pragmatically accepted by any banking institution seeking to recoup as much as it could under the circumstances, however with Anglo Irish Bank now State controlled, the board felt it could not agree to incur such a loss on behalf of Irish taxpayers.

The amount of the loss may seem trivial in the overall context of the losses incurred by Anglo, but there was a matter of principle involved in the bank's refusal - never mind, of course, the political ramifications of effectively forgiving €4 million of the personal debt of one of the people who contributed to the bank's recklesness at a time when so many people are struggling to pay their mortgages with no real prospect of any of that debt being forgiven.

This rejection ultimately led to Mr Drumm's move to file a voluntary petition for bankruptcy in the State of Massachusetts - where he now lives - which would divest him of all his assets worldwide and vest them in the Trustee in Bankruptcy in the United States. This may mean that Anglo Irish Bank, on behalf of the Irish taxpayer, in practical terms, may be able to recoup even less than what he was prepared to offer them last month.

The bank has pledged to continue to pursue Mr Drumm for all of the €8.5 million he owes, but this may prove a fruitless exercise after his US bankruptcy filing which was described by one of the legal counsel for Anglo when it was mentioned in the High Court in Dublin last week as 'quite an extraordinary turn of events.' It throws into chaos Irish legal moves against the former chief executive, as it had been hoped that Mr Drumm would come to Dublin next week for the full hearing of the action against him by the bank, due to commence on Tuesday 26th, and to answer questions from a number of inquiries being conducted into the affairs of Anglo Irish Bank by the Garda Bureau of Fraud Investigation, the Office of the Director of Corporate Enforcement and another on behalf of the chartered accountants' representative body.

Regardless of his own personal predicament, David Drumm owes it to everybody affected by the Anglo debacle to co-operate fully with the various inquiries, so that it can be properly determined who should be held accountable and so that those identified can be brought before the courts here, if deemed appropriate, to face trial for any illegal actions it may be alleged they carried out. He has engaged in correspondence with them, but it would be far more satisfactory if he submitted himself to proper face-to-face questioning in order to try to bring matters to a speedy conclusion.

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