Irish Bank Execs Caught On Tape: Lure Government Into Bailout, Don’t Pay Back

Anglo Irish Bank execs joked over phone on how to secure a bailout, lie about their losses, and not pay taxpayers back. posted on

Via Kevin Tang

Taped phone conversations posted by The Irish Independent show two Anglo Irish Bank executives discussing how to secure billions in taxpayer-backed bailouts. They joked about when they plan to pay back the money (“which is never”) and why they requested the sum of €7 billion (“picked it out of my arse”).

The tapes confirm suspicions that execs knowingly siphoned public money into an ailing bank that would eventually collapse and nationalize in 2009. Officials in Ireland are now investigating the case.

The conversation dates to the height of the financial crisis in 2008, with senior executive John Bowe describing how to approach Central Bank for €7 billion in public assistance.

“Under the terms that say repayment [of the bailout], we say ‘no’,” Bowe can be heard saying.

Anglo Irish Bank later soaked up a total of €30 billion in bailouts before collapsing and nationalizing. In 2011, the bank posted the largest corporate losses (€17.5 billion) in Irish history. BBC’s Simon McCoy and Jim Fitzpatrick describes the public reaction in Ireland to the tapes as ‘teeth-grinding anger.’

“Ireland lost its economic sovereignty because Anglo bankers lied,” a column in the Independent says.

Another snippet of the conversation shows them detailing their strategy to incrementally rope the Central Bank into offering a larger bailout package.

“That number is seven [billion], but the reality is that actually we need more than that,” Bowe can be heard saying. “But the strategy here is you pull them in, you get them to write a big [check] and they have to … support their money, you know.”

“They’ve got skin in the game and that’s key,” the other manager says.

Clarifying why he asked for €7 billion, Bowe says that if Central Bank saw the enormity of the bailout Anglo Irish really needed, “they might say the cost to the taxpayer is too high.”

Both managers involved in the conversation have released statements on BBC denying that they were on the executive board deciding the actual funding strategy.

In another tape, Anglo Irish Bank CEO David Drumm mocked the rush of German deposits in the struggling Anglo Irish Bank by singing “Deutschland, Deutschland, über alles” and urged his employees to “get the fucking money in.”

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