Department told €1.5bn would save Anglo Irish

ANGLO IRISH BANK chiefs told the Department of Finance it would cost just €1.5 billion to save the company two days before the 2008 Government bailout which ultimately led to the facility’s nationalisation.

Correspondence obtained by Labour finance spokeswoman Joan Burton shows that, in the lead-up to the controversial re-capitalisation scheme, Anglo Irish officials wrongly assured Government that foreign investors would take stakes in the bank if the state underwrote the process.

As part of the claims, former executives David Drumm and Seán FitzPatrick and then financial director, Willie McAteer, said there were signs of interest from European and US investors.

In the emails to Department of Finance officials, Mr Drumm indicated that, if the state bailed the bank out, up to €1.5 billion could be found from these private individuals — a move he said would guarantee the company’s future.

The Government subsequently agreed to the banking bail out.

However, after this step was taken, the apparent foreign interest in the company failed to materialise.

In addition, while Anglo Irish financial results from earlier in the month had made provisions for impaired loans of just €500 million, the bank subsequently lost €14 billion through impairments to loans.

Reports over the weekend revealed that during a December 12, 2008, meeting between Anglo Irish officials and the Department of Finance, Mr Drumm told Government the company “was not in a position to correct this situation on its own and needed assistance from the state”.

Mr FitzPatrick added that, if the financial gap was not resolved by longer-term investment from abroad, the bank would have liquidity problems.

Department of Finance officials said they needed to consider whether it was appropriate to underwrite the €1.5 billion deal.

However, Mr FitzPatrick said there were no legal issues that would prevent Government from making a public statement indicating such a move, before pressuring officials to make a commitment on the matter.

The next day, Mr Drumm emailed a Department of Finance official repeating the claim, stating that: “Media reports this morning have unfortunately put us in a very difficult position. Accordingly, we are keen to get clarity as soon as possible on how matters might proceed.”

The following day Government agreed to bail out the country’s main banks, with €1.5 billion in taxpayers’ money going to Anglo Irish.

Mr Drumm and Mr FitzPatrick have since resigned after it emerged they had massive loans with the bank — €90 million of which related to Mr FitzPatrick alone.

The former Anglo Irish executive is set to apply for bankruptcy at the High Court today.

Joan Burton, who obtained the bailout correspondence under the Freedom of Information (FOI) act, described the documents as a “fascinating insight into the relationship” between Government and a bank that was “on the edge of the abyss”.


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