Anglo Bank collapse confounds probe
DUBLIN — A two-year investigation into hidden loans and losses at Anglo Irish Bank represents the "biggest and most complex" criminal probe in Ireland's history, the country's justice minister said Friday.
DUBLIN — A two-year investigation into hidden loans and losses at Anglo Irish Bank represents the "biggest and most complex" criminal probe in Ireland's history, the justice minister said Friday as he faced questioning over the failure to charge anyone so far.
Justice Minister Dermot Ahern said police and corporate ethics officials have interviewed 400 people, and pored over 115,000 e-mails and letters, in hopes of identifying bank officials responsible for fraudulent practices at the nationalized bank, which was headed by Chatham resident David Drumm until the scandals came to light. Ahern couldn't say when the effort would conclude or produce criminal charges.
"There's no one more annoyed at what happened than people around the Cabinet table," said Ahern, who called the search for the truth inside Anglo "the biggest and the most complex investigation in the history of the state."
"Unfortunately outrage and anger is no good in lieu of evidence. What you have to get is hard evidence," he said.
Ireland's police commander, Commissioner Fachtna Murphy, said 27 detectives and 16 corporate enforcement officials were running the probe in consultation with two senior lawyers. He said officials would visit London next week to seek the handover of Anglo's e-mail and other records related to its British division.
The government estimates bailing out Anglo — which invested heavily in property developments in Ireland, Britain and the United States using borrowed foreign money — will cost taxpayers $40 billion to $47 billion.
A range of external investigators since 2008 has already found that former Anglo chiefs oversaw several ruses to hide losses and loans — maneuvers that were detected only after Anglo sought emergency help from the government and other banks. But Ahern and Murphy say identifying which personnel are responsible will be far harder.
Police are investigating who approved a secret $623 million loan to 10 top Anglo customers on condition they used the money exclusively to buy Anglo shares — a July 2008 gambit that failed to stem the collapse of the stock price.
Also under the spotlight is Anglo's use of two other Irish banks to hide the true state of its accounts in 2008 in the weeks before Ireland unveiled emergency repayment insurance for all Irish banks.
Former Anglo chairman Sean FitzPatrick, who owes Anglo more than $150 million, hid those loans for several years from shareholders by taking them off the books each year immediately before the bank's annual accounts were issued. FitzPatrick covered up the loans by borrowing money temporarily each year from Irish Nationwide Building Society, which like Anglo also has been nationalized after suffering massive losses from property gambles gone bust.
In September 2008, immediately before its annual accounts were published, Anglo received 7 billion euros in short-term funds from Irish Life Permanent, then quickly returned the amount. Anglo partly mislabeled those funds as new customer deposits in a bid to cloak the fact that depositors were actually deserting the bank.
So far only two former Anglo directors, FitzPatrick and former finance and chief risk officer Willie McAteer, have been arrested and then released as part of the probe. A third official, former chief executive David Drumm, fled to the United States and declared bankruptcy in Boston.
Drumm was Anglo's CEO from 2005 until December 2008, when he moved to Chatham, where he owns a waterfront home. Irish media outlets have reported that he recently moved to a rented home in Wellesley.
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