Department knew of Anglo shares move, claims book

THE Department of Finance was aware Anglo Irish Bank was trying to place shares controlled by businessman Seán Quinn long before the controversial deal became public, it has been claimed.

In a new book, The FitzPatrick Tapes, based on a series of interviews with the former Anglo chairman, Seán FitzPatrick, it is claimed the department knew the bank was seeking to get other buyers for Mr Quinn’s shareholding to prevent a major run on Anglo in 2008 before the story entered the public domain in January 2009. The revelation raises fresh questions about the extent of knowledge of both Taoiseach, Brian Cowen and his successor as Minister for Finance, Brian Lenihan, about the growing banking crisis in 2008.

The book claims Con Horan, prudential director of the Financial Regulator, stated that the Department of Finance knew of the plans concerning the so called Maple 10 – the code word used by Anglo for its plans for 10 prominent businessmen and clients of the bank to agree a €450m loan to buy out Quinn’s shareholding to shore up Anglo’s share price.

According to the book, Mr Horan said the department would have been aware of the transaction through its membership of the Domestic Standing Group — a committee which included representatives of the Central Bank and Financial Regulator.

Mr FitzPatrick said subsequent claims by the Financial Regulator that it had been misled by Anglo on the matter were “not justified”. The book also reveals how Mr FitzPatrick was heavily criticised by his AIB counterpart for suggesting all Irish banks were “on the brink” in September 2008.

Dermot Gleeson, the then AIB chairman, accused Mr FitzPatrick of recklessly misrepresenting the financial position of AIB in an interview he gave on RTÉ’s Marian Finucane’s radio programme. In a letter written to the Anglo Irish chairman, Mr Gleeson claimed he was “shocked” at Mr FitzPatrick’s remarks.

Mr Gleeson — a senior counsel and former attorney general — said Mr FitzPatrick had conveyed an impression that all banks were in the same situation as Anglo. He said it was “outrageous” for Mr FitzPatrick to have suggested AIB’s liquidity was only good for a matter of days. Mr Gleeson said AIB had agreed to a request to provide Anglo with €5 billion to help it balance its books.

Mr FitzPatrick was heavily criticised for the interview in which he refused to apologise for creating the banking crisis. He claims he was praised by former Bank of Ireland chief executive, Pat Molloy, over his handling of the interview as well as many others including controversial developer, Mick Bailey, who were “thrilled” with his performance. Then chairman of Bank of Ireland Richard Burrows rang the Anglo boss to inform him the bank’s board was very upset by his comments.