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Anglo from the Horse’s Mouth

Posted on: September 11th, 2011

HAD the Irish Times turned tabloid?

Last week, ex-editors of the paper of record turned in their graves. The lead item on a front page that frowns on sensationalism had gone walkabout.

All that traditional D’Olier Street stuffiness had been thrown out the window, the lofty ideals of its politically correct founders discarded by a new editor barely a wet day in the job. Insiders were muttering that “it would never have happened under Geraldine (Kennedy, the recently retired editor)”.

The Irish Times splashed with extracts from a book. No, not written by high-brow John Banville or even Fintan O’Toole. Selected quotes from the book, dominating the garish headline, would have done the Sun or the News of the World proud. Under the guise of news — about Anglo Irish Bank — it seized the attention of the masses. Nearly a quarter of a page of precious news space was devoted to a short quote from Anglo’s ex-boss, David Drumm. Beside it was placed a giant cut-out picture of the same hero — the book’s central character. Such promotion for the work of one of its own journalists, Simon Carswell, was groundbreaking. There was barely enough space left on the page for a single news story.

God knows what the Irish Times’ readership of pretentious professors, cerebral feminists and self-righteous intellectuals thought of its descent into such vulgar marketing. What was wrong with the normal diet of tiresome tales from the EU Commission or the worthy words of trade union leader David Begg?

Instead, they converted the thorough work of one of their finest journalists into a masterpiece of populism. Simon Carswell’s book, Anglo Republic — Inside the Bank that broke Ireland, was promoted with shameless panache.

The first challenge for Carswell’s book is whether it lives up to the newspaper’s racy billing.

Good journalists often write bad books. Simon Carswell is an encyclopaedia of the banking sector. His difficulty was to satisfy the voracious appetites of tabloid readers out there, while retaining his prestige as a sophisticated journalist. He had to combine the Irish Times’ sniffy sense of fair play with the sensational instincts of an angry mob baying for blood.

The second test for Carswell is that he is a bit late in the game. Half-a-dozen books have been penned about Ireland’s banking elite. From David Murphy and Martina Devlin’s Banksters, my own The Bankers, Simon Kelly’s Breakfast with Anglo to Tom Lyons’ and Brian Carey’s The FitzPatrick Tapes. Is the nation Anglo’d out?

The book passes both tests with flying colours. The chronological narrative shows all the signs of a diary meticulously kept over a number of years. His work bears the hallmarks of not having been written in a hurry. It is better researched than others and it is obvious that Carswell has relied on the trusted sources that have marked his unique coverage of Anglo over a long period.

The book’s chief source appears to be David Drumm himself. At times, it is Anglo through the eyes and emotions of the man who is now a fugitive in the US. Carswell regularly describes Drumm’s inner feelings — hardly emotions that were gleaned from anyone else. He charitably tells us that Drumm, now one of the chief villains of our banking scandal, never wanted the job. He reveals Drumm’s decision to reduce lending for property development in his early days in the position, only to admit that he and his cohorts were unable to resist every tempting deal that came their way. He even tells us that despite Drumm’s resignation in disgrace shortly after Sean FitzPatrick’s exit, the board — in particular chairman Donal O’Connor and senior independent director Ned Sullivan — urged him not to resign so soon. According to Carswell, Drumm made the decision to quit despite their pleas, concluding that the media mob and the Department of Finance would come looking for his head within days, exposing his prior knowledge of chairman Sean FitzPatrick’s burial of his director’s loans in the accounts of Irish Nationwide. Apparently, the board thought highly enough of Drumm to ask him to help them choose his successor.

Drumm is given plenty of rope to explain how he was misunderstood, how he fought with FitzPatrick (they were hardly on speaking terms at the end) and to rehearse many of the claims that he will no doubt be forced to repeat before a Boston court in the coming weeks.

In typical Irish Times style, Carswell refuses to be judgmental. He creates neither heroes nor villains, doggedly sticking to the narrative of what happened and leaving the reader to decide the merits of the characters involved. He gives all the excuses, as related by those who now feel demonised, for the extraordinary machinations that took place in the €7.2bn artificial deal between Anglo and Irish Life, designed to window- dress the year-end accounts. Most telling was the almost universal acceptance among all bankers that doctoring books in this way was perfectly normal.

The most sinister, but credible excuse was that the vast transaction was known by the Central Bank, the Financial Regulator and the Department of Finance. Even outsiders are not exempt from this convenient philosophy. He highlights the stunning statement by the independent and external Regling-Watson report into the banking crisis that the Anglo-Irish Life deal was “window dressing of balance sheets beyond acceptable levels”.

Window dressing okay. “Beyond acceptable levels” not okay. The system was rotten to the core. And it still is.

Despite Carswell’s anxiety to be scrupulously fair, even he cannot resist the conclusion that such “balance sheet management” was designed to deceive the markets. Readers will be left with a familiar feeling that auditors, bankers, regulators and governments colluded to tolerate a bit of deceit, but not an excessive amount!

Anglo Republic begs the question of why Anglo has been the topic of three of the five books on the banking scandal. Other culprits, including Bank of Scotland (Ireland), AIB , Bank of Ireland and Irish Life, hid skeletons in their cupboards. Yet Anglo remains box office when it comes to public interest. Scandals have fallen out of the closet in AIB and Irish Life but they have escaped such scrutiny. AIB has lent more money on the property market. The guilty secrets of AIB are waiting to be written.

Perhaps this concentration on Anglo represents a spinning victory for the survivors of the financial holocaust — the pillar banks. The book shines a light on how AIB and the Bank of Ireland tried to distance themselves from Anglo, initially pointing the finger at Anglo on the dark night of the bank guarantee, later denouncing Sean FitzPatrick for trying to embrace them as equally culpable in his infamous RTE interview with Marian Finucane.

Carswell includes the nugget that Richard Burrows gave Fitzpatrick a rocket on the telephone and AIB chief Dermot Gleeson despatched a stinker in the Anglo chief’s direction after his media appearance. But Burrows and Gleeson themselves resigned within months after their banks were outed as fellow property speculators. In a neat gesture to balance, Carswell tells us that Pat Molloy, current governor of the Bank of Ireland and media darling, telephoned FitzPatrick with a message of support.

The book is a readable balance between a journalist meeting the demands of thrillseekers and living up to his reputation for fair reporting. The Irish Times will be pleased. The great unwashed will love it.