A former bank chief accused of conspiracy to mislead investors told gardaí that he had authorised a €7.2 billion deal with Anglo Irish Bank because he felt he was obliged to support the other bank under a "green jersey agenda", backedby both the Financial Regular and the Central Bank.
The court yesterday heard further details of statements made to Gardai by Denis Casey (56) who was the group chief executive of ILP from May 2007 until February 2009,
Four former executives from Anglo Irish Bank and Irish Life & Permanent (ILP) are on trial for allegedly conspiring to mislead investors by setting up a €7.2 billion circular transaction scheme to bolster Anglo’s balance sheet.
Mr Casey told gardaí Anglo misrepresented the deposit from his bank to achieve their stated aim of bolstering its deposits figure.
Mr Casey from Raheny, Dublin, Peter Fitzpatrick (63) of Convent Lane, Portmarnock, Dublin, John Bowe (52) from Glasnevin, Dublin, and Willie McAteer (65) of Greenrath, Tipperary town, Co Tipperary, have all pleaded not guilty at Dublin Circuit Criminal Court to conspiring together and with others to mislead investors through financial transactions between March 1st and September 30th, 2008.
At the beginning of week 14 in the trial Det Sgt Catharina Gunne from the Garda Bureau of Fraud Investigation gave evidence of voluntary interview statements provided by Mr Casey in October, 2013. The court had heard last week of an earlier statement from Mr Casey made in 2010, but further details emeged on Tuesday fromthe later statements.
No role
Mr Casey told Det Sgt Gunne that he had authorised the allegedly back-to-back transactions with Anglo but had no role in the structuring or execution of the deals.
He said he authorised the placement of billions of euro to Anglo in September 2008, to cover the date of their year-end accounts on September 30th, in order to support a “pillar” financial institution in the Irish banking system.
He said he was motivated to do this because of his understanding of a request from Pat Neary, the then chief executive of the Financial Regulator, and Central Bank governor John Hurley for Irish banks to support each other, a so-called "green jersey" agenda.
“The September transactions would never have arisen or never have been contemplated by ILP but for our understanding of our obligations under the green jersey agenda mandated by the Central Bank and Financial Regulator,” he told gardaí.
He agreed that Anglo was seeking support to bolster its deposits by billions of euros. Mr Casey said he authorised the placement on the basis that it would be collateralised, or secured by another payment or asset. He said he believed the financial exposure to ILP from the deposit with Anglo was nil.
“As the transaction was collateralised no financial exposure arose for the Group (ILP),” he said. He said that because the deal was collateralised it could not have been used to bolster Anglo’s deposits because of accounting regulations which only allowed deposits that carry a risk to be included on the bank’s balance sheet.
In fact the €7.2 billion deal did appear in Anglo Irish Bank’s corporate deposits figure on its year-end balance sheet when it published its accounts in December 2008.
Investigators put it to Mr Casey that he had facilitated Anglo Irish Bank’s intention to bolster its deposits figure by engaging in these transactions.
The accused denied this was true and said: “The collateralised transactions could not have been used to ‘bolster’ Anglo deposits. In fact Anglo were required to misrepresent the transaction . . . in order to present it as it did”.
He told gardaí that in September 2008 he had no reason “to question or doubt the integrity and honesty of the senior management in Anglo”.
Mr Casey told detectives that it was only in February 2009 that he became aware that if Anglo went into liquidation the financial exposure in ILP could have been €7.2 billion.
He said that in September 2008 he “had no reason whatsoever to doubt the honesty and integrity of Anglo Irish Bank”.
He said he didn’t believe that it was the same €1 billion being circulated during the course of these transactions.
Merger of institutions
On September 22nd, ILP chairwoman
Gillian Bowler
and Mr Casey met senior executives from Anglo, including their chief executive
David Drumm
, to discuss the merger of the two institutions.
He said he had previously recommended that the ILP board reject the merger proposal and the board had done this on the previous Friday. He told gardaí he was deeply unhappy that a second meeting had been arranged and did nothing to disguise this.He said he found out later that Mr Drumm described Mr Casey as having “a f**king brick wall built in front of him” and “kept saying very, very stupid things”. Mr Drumm told colleagues that “we stopped short of insulting him”.
