We need your help now
Support from readers like you keeps The Journal open.
You are visiting us because we have something you value. Independent, unbiased news that tells the truth. Advertising revenue goes some way to support our mission, but this year it has not been enough.
If you've seen value in our reporting, please contribute what you can, so we can continue to produce accurate and meaningful journalism. For everyone who needs it.
Sign in. It’s quick, free and it’s up to you.
An account is an optional way to support the work we do. Find out more.
By continuing, you are indicating that you accept our Terms of Service and Privacy Policy.
WILLIE MCATEER AND Pat Whelan became the first bankers to be convicted under Ireland’s laws relating to illegal lending yesterday when a jury of seven women and five men delivered guilty verdicts.
They are the first executives from Anglo Irish Bank to be held to account for the collapse of the financial institution.
The pair’s offence was lending over €450 million to the so-called Maple Ten – a group of property developers – to prop up the bank’s share price.
What happens now?
Sentencing
McAteer and Whelan will return to court on 28 April to find out if they will serve a prison sentence – and how long that term will be.
Under Section 60 of the Companies Act, they could face up to five years in prison but remarks made by the judge during legal argument in the trial make this an unlikely outcome.
RTÉ News reports that Judge Martin Nolan told the accused during proceedings that while he could not allow them to use the Financial Regulator’s knowledge of events as a defence, he would take it into consideration as a mitigating factor on conviction.
“I have no doubt the Financial Regulator knew there was going to be substantial lending into this scheme to effect it,” he said.
I also take the view that the Financial Regulator took no steps to discourage the scheme or in any way stop it. And it seems from regulator witnesses that they were somewhat relieved when the scheme went through and that the CFD issue was alleviated and regularised.
Fines of up to €30,000 may also be issued by Judge Nolan at the end of the month.
Bank Inquiry
A parliamentary inquiry into the banking collapse, which has been given the green light by government, now looks set to begin before the end of this year.
The probe was previously delayed on the advice of the Office of the Director of Public Prosecutions as any Oireachtas hearings could have an impact on ongoing trials.
With the guilty verdicts for Whelan and McAteer and the not guilty finding for Seán Fitzpatrick, the Oireachtas Finance Committee will be able to start its preparatory work.
Chairman Ciarán Lynch, who is expected to head the investigation, told TodayFM that there is much work to be done, including forensic accounting and witness processes.
However, he added that he “would certainly see that process commencing within this calendar year”.
David Drumm
Although he wasn’t in his dock, Judge Nolan described David Drumm, former CEO of Anglo Irish Bank, as the “author” of the Maple 10 loan deal.
Newstalk’s Francesca Comyn also recalls how lawyers for Pat Whelan described the trial as “Hamlet without the Prince”.
Drumm – who told Seán Fitzpatrick the Quinn deal was above board and that he didn’t need to know the names of the Maple 10 – was not part of the DPP’s case.
He currently resides in the US, where he is awaiting a bankruptcy case hearing on 21 May.
The court will decide if he can walk away from his debts, thought to be around the €10 million mark.
Drumm moved to Boston five years ago and has refused to return to Ireland to answer questions about what happened at his former employers.
Seán Fitzpatrick
Despite Fitzpatrick’s almost-gleeful statement on Wednesday following a not guilty verdict, the 65-year-old is not done with courtrooms.
He will be back on trial later this year in relation to charges of failing to make disclosures to the bank’s auditors about loans he received.
A trial date has been set down for 7 October, with a hearing on preparations due on 25 July.
The loans in question, worth €139 million, were allegedly drawn down from Irish Nationwide Building Society between 2002 and 2007.
To embed this post, copy the code below on your site
Regulator has lot to ans for also
To be fair, the Regulator didn’t realise he was the Regulator at the time. Couldn’t understand why he kept getting money into his account every month and a pension. Thought he’d won something, but was afraid to ask.
Well it’s time now for the (non)regulator to be put in front of a jury of his peers.
Calling that man a regulator is an insult to most upstanding regulators. His appearance at the trial and answers were disgrace and his pension should be stripped from him.
Who appointed him and how was he selected?
What ever he lacked in qualifications and skills he made up for with FF contacts. At the end of the day that’s all that really matters.
The con and the cover up goes on
While I don’t defend his ineptitude, the background to Mr Nearys appointment should be considered.
The office was not invented until 2001 or 2002, previously banking regulation was the direct responsibility of the Central Bank and its Governor.
When Mr Neary was appointed the light touch regulatory system was already well in place.
While McCreevey did not say it directly, the implicit instruction to Mr Neary on his appointment was to continue with the system he was inheriting, not to rock the boat.
What we have learned since the crisis was that his office was starved of funding by the Central Bank and the Dept of Finance, and that some of the efforts at regulation the office made had the bankers running to McCreevey or his successor Cowan, who passed on the word to the regulators staff to back off.
There is also the external context, many other countries also set up “independent financial regulators” to remove the responsibility from their own Central Banks or equivalent institutions at around the same time.
I find it astonishing that so many separate sovereign nations came up with the same idea at the same time. Only a conspiracy theorist would think that perhaps it was the Central Bankers that could see the impending disaster ahead and persuaded their respective governments to set up these “independent regulators” in order to escape the resulting blame when the inevitable crash would arrive. I guess we’ll never know, but the Central Bankers have certainly survived OK.
The Central Bank Act 2004 removed and deleted the role of the Central Bank of Ireland in the control of the supply of credit in the public interest. Ask yourself why that was done and not even debated in Dail Eireann. The credit bubble and the resultant asset bubble were intentionally created.
It is hard not to feel some sympathy for Neary. I would guess he is a nice man who worked hard; he had a long record at the CB and must have done well in his narrow field. But he was totally unaware of what it means to be a regulator. He clearly had no clue as to what he really should have been doing. The system and politics of the day were as much at fault.
It is a lesson to anyone put in charge of anything and paid to do so – understand what it is you are carrying the can for, someday you’ll be called to account when the shat hits the fin, and if you have even 60% of your ass covered by having taken deliberate effective measures to limit the shat, you’ll have been doing a good job. Neary was in the clouds. Innocent as a child really. I do feel sorry for the guy. Until I read about his salary and pension.
Ireland, under the strong control of the Department of Finance senior officials, refused to allow a truly independent financial regulator.
A report issued in 1999 recommending a truly independent financial services and credit institutions regulator but this was nobbled by The Department of Finance which briefed against the proposal.
Neary was a mere inept and sinecure nominee of an office which was intended to be toothless and impotent, directed by the CBI and by the Department of Finance.
We paid sold 23 carat gold peanuts to Neary but we got an untrained monkey.
Yes…I have been saying it for 5 years…Pat Neary needs to go in front of a judge and jury for being complicit in all the banking scandals and possible treason.
Watched VinB last night and the extracts from Pat Nearys evidence at the Anglo trial. Its absolutely beyond belief that he turned around and said that when David Drumm asked to meet him on an ad hoc basis one day that he thought it was a personal private meeting…perhaps about holiday destinations etc..when in fact the Anglo world was collapsing on the back of the Quinn CFDpositions and possibly the Irish Banking sector with it and that was the basis of the request from Anglo for the meeting!!!!!
Just a reminder folks..coming to election time again…Pat Neary..our fabulous Financial Regulator was created and appointed by Fianna Fail and was also paid off by Fianna Fail with a massive pension and Golden Handshake after the Banking Crash!!!!!!! Leopards dont change their spots…particularly not of the deVelera breed!!
2 words – Fianna Fail!!!!
Zero sympathy…a man at that level deserves no sympathy as he was and is obviously sound of mind!he was an FF chronie pawn now living a lavish life off our money after overseeing the biggest banking collapse in our history
It would be foolish and misdirected to feel sympathy for Neary. He failed to perform an important and key function and he has escaped with a huge lump sum and pension. His replies during the trial were a revelation of the attitude and chapter of the man but he was implementing policy which had decided that the supply of credit was to be uncontrolled.
Nearly and his ilk will be prominent attendees at the 1916 centenary celebrations.
Patrick Neary was asleep at the wheel or perhaps was told to be but Matthew Elderfield caused for more destruction.
How can Drumm move to Boston and escape facing up to any of his responsibilities here?
If the US wanted someone in Ireland to face charges in the US for an incendiary tweet or a dodgy movie torrent they’d be bundled into a plane in Shannon with cable ties around their wrists and a bag over their head.
Surely Drumm can be tried here in absentia and we can issue an extradition warrant to bring him home to find his roots.
Well it official, I have no clue whats going on in Ireland anymore this country is a mess.
Why the notion of “if” they serve a prison sentence? Why the hell are we so passive as a nation? We put people in jail for not paying the TV license, yet it’s “unlikely” that any of these men will serve a jail term for crippling the country and sending thousands of people to foreign shores.
White collar conviction you don’t want to inconvenience the moneyed class Damian – even in a republic….
It’s going to be bar to sentence a guy you play golf with to a prison sentence. The poor judge is in an awful predicament.
Who appoints the judges? Genuine question.
Jill politicians do, now ask yourself who contributes to politicians reelection funds.Its a circle golden if you like.
Thanks Norman. I thought as much and googled a nice bit from wiki….
In an interview in the Autumn 2012 edition of The Parchment, Mr Justice Peter Kelly head of the Commercial Court and head of the Association of Judges of Ireland said the appointments to the Supreme Court were “purely political”.[4][5] He went on to say the creation of the Judicial Appointments Advisory Board (JAAB) in 1996 “was done to create the semblance of independence as to how judges were appointed” but “the JAAB by common consent, doesn’t really work”
prospective politicians asks prospective judges and bankers to help him finance his political campaign, prospective politicians becomes real politician and pay’s back his financial backers by appointing the as judge’s and bank executives, they then give him further financial backing in future campaigns. if by chance said politician or bank official should happen to be brought before the courts they can no doubt rely on their good friend (the judge ) to again’ help them out ‘ in some way, if the said judge or politician is in need of financial advice or help ,he can of course rely on his good friend in the banking system to give them ‘a dig out’ . if either of the judge or the banker decides they would like a carrer in the political sector or a place on a government board, their good friend ( the politician) will of course, step in and use his political influence to make that happen. in the eyes of most people this would appear to be corruption, but in the eyes and minds of the countries ‘elite’ it’s just another way of doing business.. Ireland where the mafia come’s to learn about corruption!
@Damian Keane
“We put people in jail for not paying the TV license…”
People have been jailed for not paying the fine for having TV without the licence. Most people who are jailed for not paying fines are released on the same day.
Here’s another example of how short imprisonment for not paying a fine is.
http://www.thejournal.ie/john-waters-arrest-prison-1067238-Sep2013/
@Diarmuid Lenihan
“It’s going to be bar to sentence a guy you play golf with to a prison sentence. The poor judge is in an awful predicament.”
If the judge had ever met any of the defendants before the trial commenced he would have had to excuse himself from the trial.
Looks like the tax payer is in for another clipping. If the judge accepts that the regulator knew of the arrangement and took no steps to prevent it then it could be argued that the State was gave tacit approval to an illegal action to support the share price of a bust business.
If this is the case then any person or organisation that bought shares after the deal was done may well have a case against the State for compensation for losses incurred.
Watch this space.
Spot on Ben. Get the tax payers chequebook out….. Again
What about the politicos, civil servants and so-called regulators?
I agree Eric, we’ve heard far too little from or about the role of ‘the permanent government’ in all of this – not just in the Anglo stuff but in the wider economic collapse.
Mister, that is an astute comment. The Central Bank of Ireland and IFSRA were relieved by law, the Central Bank Act 2004, of the prudential supervision of the supply of credit in the public interest.
A decision was taken in 2002 and 2003,’ implemented in 2004, to create a credit bubble and followed by a property market bubble.
Don’t forgot those wonderful trade union officials:
ICTU general secretary, David Begg was a director and member of the board of the Central Bank from May 12th, 1995 until summer 2010, a period of 15years. David Begg was a very senior member of the board of the Central Bank. He was chair of its audit committee/audit and risk management committee on which three members of the regulatory authority also sat.
(Taken, ironically, from a letter from another trade union official’s letter to the Irish Times, 2013).
I still think and hope that Fitzpatrick will go down for the bed & breakfasting of his personal loans.
In fairness, whilst it galls me to admit it, I can see why the jury came to the conclusion it did. At the time of the loans in question, fitzpatrick was a non – executive director and (according to the evidence) did not have a part in making any decision.
If he gets away with the rest of the crap though, it’ll be a dark day for justice.
I hope the two guilty parties get a reasonable sentence, any less than 3 years would indicate that the judiciary are not taking things seriously.
Why cant Drumm be extradited for questioning?
If there is a ‘will’……..then there will be a ‘way’!
No will………….no way!
An enquiry is a waste of time as there is no justice served. However as we seen with Seanie bringing him to court proved to be a waste of time and no justice served
Did you read any of the media coverage on the trial? Fitzpatrick obviously wasn’t the power broker for this piece of work. His day is coming. Drumm was in control and if two of his generals are found guilty surely there must be enough evidence to charge and start extradition process.
This inquiry has no power to make findings against anyone. It is a complete waste of time. The judicial ball is rolling now so the Kildare Street circus will be used to circle the wagons to protect and a bit of cheap political point scoring. Give more resources to gardai. Fingers must have broken some many rules of company law over the years
Thors
Justice was fully served. He was brought before a jury and the evidence needed to convict him wasn’t there and thus he was found not guilty. That my dear sir is the fullest serving of justice or did you really mean …..,,,he should have been hanged anyway?
The true miscreants were the senior decision makers in the Central Bank of Ireland and IFSRA who made the deliberate decision to abolish the control of the supply of credit. Tragic and tragically harmful.
I agree Peter. But prosecutions from the ground up is the only way to open the can of worms. We’ll never get to the bottom of it.
Hopefully the judge will deal with this with an appropriate sentence and not a slap on the wrist which will run shivers down a few backs in Kildare Street.
Drumm; charge him now and issue extradition papers.
Gerbreen…….What’s stopping Fitzpatrick leaving the Country? Boston maybe?
11 counts and not even one charge – I’d say that’s a comprehensive victory for Fitzpatrick……..it makes you wonder why the prosecution brought him to Court in the first place!
Patrick distraction plain and simple, look at what has gone on at the times he was brought in for questioning arrested etc.
Paired with ‘attraction’ by the Judge………six years Society at large, had been gagged from as much as uttering guilty & Fitzpatrick in the same sentence……..and then, just before deliberations were to commence by the Jury……..” the Judge say’s……….don’t blame Fitzpatrick for the financial collapse of the Country”……..Now that’s a fcuking disgrace!
Patrick an elite protecting itself at the expense of every man woman and child in this country.Look at the lies corrupt acts committed by our elected politicians.See Kenny for lies, Lowry for corruption just two examples of The lowlifes in high office in this country.
Any legal eagle’s out there tell me if and considering the outcome in Fitzpatrick’s favour………if a “Judgement as a Matter of Law” (JMOL), was made by the Defence before the Jury heard the case?
Dog the bounty hunter is after David Drumm and the other Bankers…
A shameful indictment of Irish society as a whole. And nothing has changed! This, or something similar, will happen again. We never learn. Or seem to care !?
No Mark we elect politicians to protect us and our state they fail repeatedly we elect others who promise to do better but still they behave as their predecessor’s. The system fails us there is no sanction on these clowns when they break our trust.Also we have a permanent government that protects it’s insiders at all costs ie senior civil servants (who do they really serve?).
FG and FF and FG and FF. Over and over and over again. Do you suppose that could be at the root of the problem?
If nothing changes, then nothing changes.
Seamus senior civil servants during the crash have serious questions to answer as well but don’t hold your breath, those wagons were circled along time ago.
Its still happening as we speak dude…IBRC loanbook sell off without allowing irish mortgage holders themselves to bid….No FOI on NAMA….its a constant now
Circled wagons are vulnerable to flaming arrows.
Seven years later, seventy billions in debt, an entire generation consigned to unemployment and a nation to penury.
The salmon slipped the net as two minnows are offered up. Two scapegoats hung out to dry, to feel the full wrath of the legal system as they have their golf club membership applications black balled. They will most likely receive a strongly worded rebuke and a threatened custodial sentence, amid much publicity which will be quickly appealed and quietly released.
Meanwhile back at the ranch the rancid corruption at the core of the body politic will continue unabated as the population are farmed to keep the elites in the comfort to which they have grown accustomed.
Roll on May to give one lot their just deserts!
Jarlath, right on the nail.
The lifestyles of these people will not be in the least affected. The inquiry will generate lots of money for the legal profession. It will once again be demonstrated that there is a law for the Banking legal and Political elite and another for the normal people of this country. The total cost of this upcoming farce will of course be carried by the tax payer.
Joseph
That’s an extraordinary comment to make as you can only be referring to the defendants in this case or else you would have said so and each of these are bankrupt. Additionally their personal finance have been very extensively picked over by a prurient local press mob and thus little would have escaped such attention.
Neither are they likely to obtain alternative employment within the Banking sector or indeed anywhere else and thus your comment is foolish in the extreme.
Richard, are you really so naive ? I put this to you this whole trial was a fiasco, a big pretend we’re doing something about this. These despicable criminals should spend the rest of their miserable lives in jail with their political enablers.
30k fine and a possible 5 year (suspended) sentence. Puts it all into perspective. This country is broken and rotten to the very core.
Richard are you posting from a script or do you actually make up that sh*te yourself?
The two found guilty are not bankrupts.
“unlikely to find employment in the banking sector or indeed anywhere else” ! my ars* Richard , in a few years time when the politicos of this country deem all to be quite and forgotten ,these guy’s will resurface on some government or semi state board, with a big pay packet and pension fund to boot. when will you face up to the fact that the so called ‘elite’ class in this country are as corrupt as can be ? no matter which party is in power the 2 major political parties in this country are exactly the same, self serving, money grabbing corrupt low lives!
How are we expected to believe Drumm didn’t tell Fitzpatrick about the Maple 10 – when the guy isn’t even in the Country to attest to such?
Drumm will never return (voluntarily) to Ireland. Never. He will float through bankruptcy in the US, much as Donald Trump did and continue spreading his filth across the financial sector, keeping his lifestyle intact because the law favors the wealthy.
I cannot help thinking that the prosecution seems to have learned nothing from the so called “Guiness” case against Ernest Saunders and Gerald Ronson. Those of you with hair of a grey hue will recall the Saunders, Roson and others conspired to support the Guiness share price against short selling by Jimmy Gulliver during a takeover battle for Distillers.
The crime was to lend Guinesses own money to a small group, including Ronson, to buy Guiness shares in order to keep the price up.
Saunders and Ronson went to jail although Saunders got compassionate release for health reasons.
As for the inquiry, critical and key documents are “lost” and expunged, recollections have conveniently diminished, there was a knack of ensuring that no contemporaneous notes were taken of the important meetings and those who will conduct the inquiry will be operating under impossible legal constraints.
The truth is known but will never be acknowledged.
Incidentally, we know who bankrolled Seanie Fitzpatrick’s defence, don’t we?
Subtle tip would be appreciated actually; I thought he was relying on the missus as she got all his assets…
Mike, Date Of Birth is that subtle enough?
Although it is a fact as to the identity of the tax exile billionaire who funded Seanie’s defence, mentioning his name would expose me to a life long ban from the Journal.
The funder has done rather well out of Ireland and was for a time the Deputy Governor of the Bank of Ireland. His portfolio in Ireland includes a hospital, provision of water meters, a newspaper and commercial radio interests.
He can issue a defamation writ faster than you can utter his name.
Norman , chuckling! Nothing wrong with mentioning the initials DO’B as standing for date of birth.
could you WATER that down for us please norman?
I think the name you are referring to is Denis O Brien
Can the Gardsi bring in all of Drumms relatives , inlaws relatives,and distant relatives for questioning about any information they may have? They could treat these people the same way as they treat the relatives of junkies by searching them on the street etc. money Junkies will go to the ends of the earth for their fix snd need to be rehabilitated in the joy with the other junkies. I am sure Drumms in laws would be very upset if the fraud squad rammed their hall door at 3 in the morning with dogs in toe to assist retrieve any info on Drumms activities.
These charges were the hard ones to convict seany on but his day is coming. He will struggle to plead ignorance on his next set of charges.
Am sure drumm could be deported back to face his crimes
Ciaran lynch wont have time for this inquiry,how will he find time to top up his sunbed tan heading this fiasco,,all jokes aside the law firms are rubbing there greedy hands now with this inquiry looming,,and of course its us tax payers footing the bill,AGAIN
Does anyone know how Sean Fitzpatrick, a bankrupt since 2010, paid for the legal team that got him off? In his upcoming case, how is he paying for that legal team? Please don’t say legal aid……………
Mike, Seanie’s was funded by a non resident billionaire. The best defence that loads of money can buy.
The Regulator did not do husband job correctly!
He should be arrested and tried for financial treason!
What next for Fitzpatrick?, well a big champagne celebration with his two special friends, an all night sneer finished with some pointing at passers from his ivory tower while signing “We are the champions of the world”
I very much doubt they will get much of a prison sentence if any at all…. Prison would be to good for them, hard labour would be better… And they should be striped of any assets they have and made pay it back…
Patrick Neary, the financial regulator that never regulated indeed condoned these “deals” was forced to retire and the poor pet was only allowed a €630k lump sum severance package and €143k annual pension. You have feel sorry for the man.
they’re all blind in denial, you’re right Eddie. Just look around…
Many heading back to Europe for a week or two, then back here again to clean us out a little bit more. Nothing in their own place to keep them there.
have your say