It’s a little disconcerting to hear people expressing horror at the cursing in the Anglo tapes. Hello? This is Ireland where everyone fucking curses all the fucking time. What exactly is the problem with Drumm and Bowe swearing in the course of a private conversation?
Let’s look instead at the tone of those discussions, and in particular the conniving, the scheming and the utter lack of respect for the regulatory authorities. But of course, respect has to be commanded, and it’s now plain that the people supposedly in charge of controlling the banks were weak, indecisive and in some cases, downright incompetent. They were also supine, deferential and ineffectual in the face of a complete banking meltdown.
The latest Anglo tapes reveal a plan to artificially prop up the failed bank’s balance sheet by temporarily getting money from another bank, but where’s the surprise? We knew that five years ago. We knew that all the banks were engaging in this charade by passing a ball of money between them because the regulator failed to set a single day and time when they were all simultaneously audited. Today my books are checked and in the afternoon, I send you the money. After you get cleared, you pass it on to the next guy and so it goes.
Nobody was watching – not even the highly paid private firms of accountants who were supposed to carry out the detailed scrutiny, because it’s all a buddy’s club.
I can understand what motivated the bankers: profit and fear. I can imagine that some of the politicians might have been motivated by the same things, but I don’t get what drove the civil servants to be so utterly stupid. What was in it for them? Did they stand to make a huge gain by preventing the collapse of the non-banks? No, they didn’t. Their salaries would be the same tomorrow as they were yesterday. Did they stand to lose a huge amount if the banks went under? No, for the same reason.
So why did they become so pally with the bankers that they found themselves uttering soothing words over the phone, empathising with their predicament when in fact they should have been kicking them hard in the crotch and demanding answers? How did it come about that the man directly supervising Anglo could call John Bowe to ask if he might possibly make the time to drop down for a few minutes? Unless we’re clever we might bring the whole thing down on top of us. What’s this we stuff? Why on earth would a civil servant say such a thing to the man he’s supposed to be watching?
We all remember how, back in 2009, the banks and a number of civil servants issued legal threats against newspapers. Both Anglo and Irish Nationwide responded extremely aggressively to any suggestion that they might be unviable, even though any fool could see they had already failed beyond redemption by that time. Likewise, certain civil servants threatened action against anyone who suggested they might have lacked the competence to advise the government properly on the bank guarantee. Four years later, it’s plain that the banks were dead ducks and also that the civil servants were not up to the task of controlling their excesses.
Is it Stockholm Syndrome? I don’t think so. To me, it looks more like residual envy. They used to see these banking spivs as masters of the Universe, they used to lionise them, look up to them and wonder why they themselves were stuck in a humdrum civil service job while the smart boys were on the really big money. It’s bound to have an effect if you happen to be the regulator and you know that the guy you’re trying to intimidate earns ten times as much as you do. He might be a slippery three-card-trick merchant, he might be Del-Boy, but he has a flasher motor than you. It’s human nature.
So I think what happened is this: the mindset became established and the civil service found it impossible to shake off the feeling of deference after the slide had begun. Once people find their place in the pecking order, it’s very hard to change the relationships without changing the people. And that’s why Drumm felt he could get away with intimidation, bluster and bullshit. The regulators didn’t really understand the problem, and they were still labouring under the legacy of deference engendered in the Tiger years.
So, what about Drumm?
Well, he’s clearly up to his neck in the whole disaster, but it would be a mistake to focus exclusively on him and it would also be a serious error to dismiss what he’s been saying since the tapes started to be released. Now that Drumm is cornered, he’s extremely dangerous to just about everyone who had any sort of involvement with the financial disaster, however peripheral that involvement might have been. He’ll name names. He’ll point fingers, and if he’s going down, you can be sure he’ll take as many with him as he can.
Drumm has already started asking questions and naming names. What did Lenihan know? What did Cowen know?
What was the involvement of the AIB chief executive and its chairman, Eugene Sheehy and Dermot Gleeson? What about the Bank of Ireland CEO and its chairman, Brian Goggins and Richard Burrows? They were present in Government Buildings on the night of the guarantee, the night of the now-notorious incorporeal cabinet meeting. Did Sheehy, Gleeson (a former Attorney General), Goggins and Burrows (currently chairman of British-American Tobacco) act as members of a quasi-cabinet, while the elected ministers slumbered in their beds? If this is true and if such a quasi-cabinet made the most momentous decision ever taken on behalf of Ireland, the implications are enormous.
It means that an unelected ad-hoc government, partly composed of bankers, took a decision that will leave generations of Irish people in slavery. And that decision was taken exclusively in order to save those bankers from going out of business.
That’s the real scandal.
Let’s hear what David Drumm has to say. It might prove interesting.