This is a story of men without honour whose behaviour is akin to the petty thief.
It also reminds us big time bankers did their training in Las Vegas gambling casinos.
They are not the ones we meet at the bank desk, the junior and senior tellers wishing us a pleasant day, or middle-management who applaud our perspicuity for placing pounds in our savings account. They are not the women behind glass booths who count notes like a croupier dishes playing cards, the ones whom we ask anxiously if they might cash a desperately needed cheque without evidence of your identity. Those are the staff who lose their jobs because the executives protect theirs.
The villains are the senior executives, the ones who say “Aston Martins appreciate”, and “How much for a whole night?” and “Banks do not need regulation.”
Bankers are far too sensible and thrifty, never shifty, they opine, to squander money. Constraints and controls are not necessary, they repeat. Endlessly. Sometimes they pay others to say that.
To put it bluntly, the sons of bitches pulled a knife on us, and it didn’t have butter on it.
As we go about our daily lives wondering how we can make ends meet, and see the rich and powerful get richer and more powerful, our ire turns to bankers who got us into this mess, and the politicians who aided and abetted them.
Iceland, how’s that doing?
Iceland was one of the earliest, worst hit casualties of the 2008 crisis. Much of the nation’s rapid growth came after the privatization of its banking sector in the early 2000s and the banks subsequent aggressive expansion nationally and overseas.
The 2008 crisis triggered the collapse of Iceland’s three largest banks. Since then Iceland relies less on fishing for its economy and has diversified with software, biotechnology and tourism. In addition, Iceland took a democratic vote – a referendum – which resulted in the refusal to pay debts accrued by errant bankers, debts not the fault of the electorate.
Iceland rounded up its bankers and charged them with recklessness and attempting to cover up their illegality. After a cull of them – there’s no other way of putting it, twenty-six were put on trial, found guilty and incarcerated – the economy has started to recover.
A ‘cull’ of bankers is an apt collective noun.
Britain, how’s that doing?
In the UK we did the opposite to Iceland, we protected bankers, gave them fifteen years to get their house in order voluntarily, whitewashed their nefarious activities in costly enquiries the taxpayers paid for, (US: inquiries) and reports, raised more taxes, and imposed brutal austerity on the population. The population paid three times over.
For deliberately selling insurance and worthless stocks and shares we fine not them but the banks who took our money. No banker need fear jail. They’re free of control.
What do they mean by no ‘constraints’? We’re not asking them to swallow birth control pills. No one has advocated discontinuing their blood type.
Ireland, how’s that doing?
Ireland followed Iceland’s example.
One banker Irish justice fingered is David Drumm, former chief of the now defunct Anglo Irish Bank. Drumm is charged with thirty-three counts of alleged offences, and a separate one that comes under European Union transparency directive, a charge the UK won’t be able to engage on any of our errant bankers now it has dumped the EU.
Drumm faces charges of conspiracy to defraud, and false accounting relating to €7.2 billion in deposits placed in Anglo Irish Bank accounts by the then existing Irish Life and Permanent, during 2008. With the simple addition of an extra zero, or the numeral 1 altered to 7, these sums were allegedly shown as larger amounts in order to protect the bank’s balance sheet. Imagine if we did that without our pay cheques.
Each offence carries a five or ten year jail term, except for a single count of conspiracy to defraud, which has a maximum penalty of an “unlimited term of imprisonment”.
Drumm did what all men do keen to avoid the law, he skipped town. In fact, he hopped, skipped and jumped to Boston, followed by an extradition file to the U.S. government. Drumm was collared by U.S. Marshals in October 2015, and spent the next five months in a maximum security prison south of Boston. This is where the story really starts.
In 2010, he filed for bankruptcy under U.S. law. A Boston court dismissed his application saying he had lied and acted in a fraudulent manner.
The Massachusetts judge found Drumm had deliberately failed to disclose hundreds of thousands of dollars in assets, as well as almost a million Euros transferred to his wife’s account. It slipped his mind. Finding Drumm “not remotely credible,” the court ruled he could be extradited to Ireland. He’s back in Ireland facing the music. You wonder if he would be on trial at all had he moved to London and not Boston.
Drumm invoked the now classic Corrupt Banker Doctrine – nothing he did was illegal.
Men in black
We used to hold an image of bankers as men in black of immutable prudence; rather stuffy types inhabiting the great marble halls of finance, men who wore stiff collars, and removable cuffs if ink spilled on them from the quills used to fill in the week’s ledger.
As a pillar of the establishment Drumm’s behaviour pretty well sums up the image we have now, venal, avaricious, duplicitous, and arrogant.
Prejudices and impressions confirmed
To quote the Irish comic’s catchphrase – ‘there’s more’. Other colleagues of Drumm are on trial for conspiracy to defraud. In evidence against them a tape of some of their confidential telephone discussions was played to the jury.
The language these ‘respectable’ bankers use in an effort to extricate themselves from arrest is the language of the low thief cornered.
Warning – some readers may be offended by the evidence I quote.
I’m not one to gossip, but I can tell you this
In a discussion in September 2008 about the bank’s seriously embarrassing end of year accounts, Drumm told one colleague, a Mr Bowe, to “just leave the rating agency aside for a minute because that’s just a complete fucking nigger in the woodpile”.
Elsewhere in the tapes Drumm tells Bowe that the “bigger picture” is that on September 30 “even with the six billion fixes which Mr fucking Denis (Casey) confirmed for me this morning….we’re still fucked”.
Bowe answers Drumm in like style. “We’re still in a fucking hole”.
Drumm later tells him: “We have to get a get out of jail card before December 3rd. Unless we can fix the poxy balance sheet over year end, which is next weekend, which to me does not look doable”. And in a final flourish of James Cagney like forties movie dialogue, Bowe adds, “If we pop up with that balance sheet it’s curtains”.
Consider that phrase, the “poxy” balance sheet. Any minute Little Caesar will enter to threaten reprisal, gun in hand. Curtains.
What does this story tell us?
At one point in the trial the bankers discuss “wearing the green jersey”, meaning Irish banks should support each other, a conspiracy refused by the other banks. It’s a proposal no different from a meeting of criminal gangs from different areas of a big city, gathered together to discuss pooling and sharing during stressful times, the cops closing in.
“Pooling and sharing” is a familiar phrase – aye, but with whose money?
We were told bankers look after our money as if their own. That was a lie. They steal our money, in vast salaries, excessive bonuses for supposedly doing what they were employed to do, and fake insurance policies.
We were told banks survive on the daily transactions of the small-time, ordinary saver, that is, you and me. That is also a lie. They have contempt for the small saver. Their apologists, some of them politicians, explained they only made errors of judgement, they did nothing illegal. That was a brazen lie.
They manipulated Libor, drained pensions, and gambled savings even as they knew the risks would be horrific for our economy. We learned none can be put on trial because risk is part and parcel of a banker’s decision making. That too is a complete falsehood.
We were also told by taking billions of taxpayer money and giving it to the banks we protected our way of life, and jobs. That too was a bare-faced lie. We have grown significantly poorer. Some people will never recover. And UK banks are closing branches everywhere and making thousands of staff redundant.
Governments gave bankers and financiers carte blanche to take massive risks with our money. We know the consequences. They stole it.
‘Irregularity’ is not a bowel disorder
Anglo Irish Bank was nationalized in January 2009, but succumbed to what is categorised as ‘financial irregularity’ two years later.
The financial crisis before and after the bank’s nationalisation almost destroyed Ireland’s economy, taxpayers burdened with over £25 billion costs to cover bad debt and repay investors. The collapse of its economy forced Ireland to take EU and IMF bailout packages of up to £77 billion in November 2010.
By hard work, massive cuts in social services and building programmes, and a miracle, it has paid back the lot early in 2016. The Irish economy is on the move upwards again, slowly but surely.
The unionist gibe tossed at Scotland as a dire warning, that Ireland and Iceland are basket cases, was just another lie to hoodwink Scots into voting against their own interests.
Some of us believed it. We know better now.
Reality – what a concept!