(From left: bankrupt Sean Fitzgerald, former CEO and then Chairman of Anglo Irish Bank, Willie McAteer, finance director and chief risk at Anglo officer and David Drumm, former CEO of Anglo)
Part 1 – “The Ends of the Earth”
Below is an example of an exchange between media and politics where two clever people resort to populist language and motif with the aim of entertaining and satisfying their respective audiences:
From RTE Prime Time, 30 March 2010
Miriam O’Callaghan : And you have decided Minister to take the debts of bankers and developers, some of whom are probably sipping champagne tonight in the Costa del Sol and put those on the backs of every man, woman and child in this country for generations to come.
Brian Lenihan : No we’re not putting the debt of a single developer on the back of anyone. We’re chasing developers to the ends of the earth. That should be (become) quite obvious to your viewers at this stage.
It has been said about us Irish that we’ll look at the man with the mansion on top of the hill and think “What a bastard, he doesn’t deserve to have more than us” whereas our cousins across the water in America will look at the same man and say to themselves “Good on him, now how do I get one of those myself”. And this Irish attitude is pervasive in media reporting – whether it’s the former Anglo Chairman being able to scoff down €22 beef Wellington a kilometre north of Puerto Banus or a director of Treasury Holdings whose weekend in Marrakech came in for considerable scrutiny or indeed Miriam O’Callaghan’s reference to “sipping champagne” in the sun, no description of bankers or developers is complete without having a pot-shot at a decadent display of wealth. Of course it raises the heckles and plays to the general audience and when we’re confronting the fallout day-in day-out of the banking and property crisis, it gives us a target at which we can direct our ire and get some release.
But Brian Lenihan is playing the same game telling us the borrowers will be pursued to the “ends of the earth”. Well David Drumm, former Anglo CEO, is presently in residence in the US, he says following advice from current Chairman of Anglo, Donal O’Connor to avoid “the blame culture” of Ireland and Britain. Anglo is apparently pursuing David Drumm for loans of €8.3m. Whilst the nature of the loans would exclude their inclusion in NAMA, it is instructional to see how Anglo will go about recovering the loans because NAMA is likely to be faced with similar challenges. Anglo has according to the article in the Irish Times launched legal action against David Drumm. So where are the ends of the earth for David Drumm? Well, thanks to Google and the internet, not to mention Charlie Bird we are able to pin point David Drumm’s location pretty accurately and here goes:
And having found him, what next for getting back the €8.3m loan? Plainly I cannot comment on David Drumm’s personal circumstances though it was an interesting footnote to Charlie Bird’s doorstepping extravaganza last week that RTE consulted a local reporter – Charlie Bird said : “According to a local reporter, in recent times Mr Drumm changed the legal status of his home on Stage Neck Road.” Local reporter on the Cape Cod Times, Sarah Schmenkus then went on to say “He bought it in 2008, March 2008 for $4.6m and since then in July 2009 he did what is called declaring a homestead, basically it’s a primary residence and is protected up to a value of $500,000 against claims from people to which (sic) you owe money”
Plainly I don’t know any of the details or terms under which Anglo lent money to David Drumm. I know David Drumm has a family because that’s what he said when Charlie Bird asked him why he was “ducking down” on the News at Six programme. “Have some respect” Charlie!. What I do know is that Anglo have made a provision for non-payment of €6.7m. Making a provision of course is not the same as writing off a debt, it is simply the bank’s judgement of the likely sum to be recovered. We also know Anglo have launched legal action to recover the sum owing. I don’t know whether David Drumm gave personal guarantees for the loans – as a CEO earning almost €6m per annum, perhaps Anglo didn’t see the need for a personal guarantee. And the wealthy have a range of devices open to them to protect their wealth, either for their own benefit or for their families, devices which include the creation of trusts, bankruptcy protection measures such as the homestead declaration above to the use of corporations. Again I have no idea whether David Drumm has opted to make use of such devices but he would appear to fit the wealth profile of people who might avail of advice with respect to such devices.
What all of this means is that an individual can be pursued to the ends of the earth for debts that they owe, that they might still enjoy what for many of us would be a luxury lifestyle and there is nothing to stop them continuing to enjoy that lifestyle whilst defending actions to extract money from them, actions that might ultimately fail and which may still leave those individuals with the use/control of fantastic wealth.
Part 2 will examine our attitudes towards the pariahs and Part 3 will address whether these pariahs can positively contribute to the State and society in the future.
Part 2 – “It wasn’t me that burned your shed down”
Part 3 – Rehabilitating images and reputations
UPDATE: 17th May, 2010, In Dublin, Ireland, the Irish Times reported that the Commercial Court set a date for the hearing of a claim by David Drumm’s former employer, Anglo Irish Bank, regarding the repayment of €8.3m ($10.5m) of loans. The loans were apparently provided by Anglo in January 2008. Anglo are also seeking to have a transfer of property by David Drumm to his wife Lorraine at Malahide, Dublin nullified. According to the report in the Irish Times “Anglo claims the transfer of that property into Mrs Drumm’s name is a fraud on creditors but the couple claim the transfer was for “taxation reasons”.” David Drumm is countersuing his former employer for €2.6m for lost pay and benefits including a deferred bonus for 2006 for €661,000. The hearing of the case is now set for 26th October, 2010. UPDATE: 6th June, 2010. Ireland’s Sunday Tribune claims that David Drumm is seeking to settle the action and cross-action prior to the full hearing. No further details are provided though we are reminded that Minister for Finance, Brian Lenihan must ultimately rubberstamp any agreement. One would have thought David Drumm’s chance of a settlement would improve as NAMA itself is starting to confront the reality that money will not be fully recoverable. UPDATE: 16th June, 2010. David Drumm is reported by the Irish Times to be apparently trying to have Anglo’s case against him thrown out because Anglo has failed to produce certain documentation. The case continues. UPDATE: 17th June, 2010. RTE reports that the Commercial Court in Dublin has given Anglo more time to deal with the discovery of documentation and accordingly has not thrown out its case against former employee and officer David Drumm.UPDATE: 5th July, 2010. The Irish Times reports that David Drumm has, via an open letter (ie one that can be produced in court at a later date), made an offer to settle the case against him and it is reported that the celebrated, no-nonsense Mr Justice Peter Kelly has given Ango two weeks to consider the offer. David Drumm won a minor victory today in that he was awarded his costs in relation to his action to force Anglo to disclose certain documents which Anglo had resisted. Notwithstanding the present offer for settlement, the case is due to be heard in October 2010 and Anglo have also applied to have the transaction set aside whereby David Drumm transferred his house in Dublin to his wife. UPDATE: 19th July, 2010. The Irish Times reports that Anglo have rejected David Drumm’s proposals to settle but have made counter proposals to David Drumm to which he has until 30th July, 2010 to accept failing which the case will be set down for a substantive hearing on 26th October, 2010. Details of the Anglo counter proposal have not been published.UPDATE: 31st July, 2010. The Irish Times reports that the parties have not reached a settlement though apparently discussions may continue and the hearing remains set down for 26th October, 2010. The first part of the hearing will deal with Anglo’s claim for its loan and David Drumm’s counterclaim for unpaid termination pay and bonus and damages for mental stress. There may then follow a hearing of Anglo’s application to have David Drumm’s transfer of his home in Malahide Dublin to his wife set aside.
Drummie had better invest his money wisely :)
Apart from the house the State of Mass Law also allows him to keep
“Two cows, twelve sheep, two swine and four tons of hay. ”
And you may be sure Drummie is perusing the rare breeds stocklist and that his cows willl be rare Japanese Kumamota Wagyu cattle.
Other things he can keep.
http://www.mass.gov/legis/laws/mgl/235-34.htm
“First, The necessary wearing apparel, beds and bedding for himself and his family; one heating unit used for warming the dwelling house, and the amount each month, not exceeding seventy-five dollars, reasonably necessary to pay for fuel, heat, water, hot water and light for himself and his family.
Second, Other household furniture necessary for him and his family, not exceeding three thousand dollars in value.
Third, The bibles, school books and library, used by him or his family, not exceeding two hundred dollars in value.
Fourth, Two cows, twelve sheep, two swine and four tons of hay.
Fifth, Tools, implements and fixtures necessary for carrying on his trade or business, not exceeding five hundred dollars in value.
Sixth, Materials and stock designed and procured by him and necessary for carrying on his trade or business, and intended to be used or wrought therein, not exceeding five hundred dollars in value.
Seventh, Provisions necessary and procured and intended for the use of the family, or the money necessary therefor, not exceeding three hundred dollars in value.
Eighth, One pew occupied by him or his family in a house of public worship; but this provision shall not prevent the sale of a pew for the nonpayment of a tax legally laid thereon.
Ninth, Boats, fishing tackle and nets of fishermen actually used by them in the prosecution of their business, not exceeding five hundred dollars in value.
Tenth, The uniform of an officer or soldier in the militia and the arms and accoutrements required by law to be kept by him.
Eleventh, Rights of burial and tombs in use as repositories for the dead.
Twelfth, One sewing machine, in actual use by each debtor or by his family, not exceeding two hundred dollars in value.
Thirteenth, Share in co-operative associations subject to chapter one hundred and fifty-seven, not exceeding one hundred dollars in value in the aggregate.
Fourteenth, Estates of homestead as defined in chapter one hundred and eighty-eight or, in lieu thereof, the amount of money each rental period, not exceeding two hundred dollars per month, necessary to pay the rent for the dwelling unit occupied by him and his family.
Fifteenth, Cash, savings or other deposits in a banking institution, or money owed to him each pay period as wages for personal labor or services, or any combination of such cash, deposits or money owing, not exceeding one hundred and twenty-five dollars, or any sum of money which was received by or is owing to him as public assistance.
Sixteenth, An automobile necessary for personal transportation or to secure or maintain employment, not exceeding seven hundred dollars in value. ”
The Homestead Law is here
http://www.mass.gov/legis/laws/mgl/gl-188-toc.htm
“CHAPTER 188. HOMESTEADS
Chapter 188: Section 5. Prior mortgages, liens or other encumbrances
Section 5. No estate of homestead shall affect a mortgage, lien or other encumbrance previously existing. ”
Are we QUITE sure that Drummie did not stuff a few key papers into his briefcase before he resigned from Anglo????
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