David Drumm trial: Defence put up strenuous challenge in lengthy legal arguments

During the numerous days of legal argument during David Drumm’s trial, which ran for 16 weeks, the jury was regularly excused to sip tea in the comfort of their quarters while barristers battled it out over issues of admissibility, hearsay and everything in between.

Drumm, the jury had been told, allegedly conspired with John Bowe, Willie McAteer, Denis Casey and others to defraud depositors and investors at Anglo Irish Bank by dishonestly creating the impression that Anglo's deposits were €7.2 billion larger than they were in September 2008.

After a 16-week trial at Dublin Circuit Criminal Court a jury yesterday convictedthe ex-Anglo Irish Bank chief executive of conspiracy to defraud and false accounting charges.

Former Anglo bankers John Bowe and Willie McAteer and former Irish Life and Permanent (ILP) chief executive Denis Casey were convicted of the same charge after an 89-day trial at Dublin Circuit Criminal Court in June 2016 and were subsequently jailed. A fourth man tried along side them, Peter Fitzpatrick, former chief financial officer at ILP, was acquitted.

Drumm, the State said, also falsely reported this information to the market by way of publication of Anglo’s preliminary end-of-year accounts in December 2008.

Not so, said Drumm and his lawyers, entering a not guilty plea on both charges.

One day, early in the trial, when arguing about the admissibility of a witness, Mary Rose Gearty SC, prosecuting, quipped: "We should be grateful he is prepared to come here at all. Most people can't find a barge poll big enough to put between themselves and this case."

Immunity

Whether the jury should be told that prosecution witness Matt Moran had been afforded immunity from prosecution by the State was the subject of intense debate before Judge Karen O'Connor.

Before he began his testimony, the former Anglo chief financial officer was asked to momentarily exit court 19. The prosecution reminded the judge that Moran had told the jury at the aforementioned trial in 2016 that he had been granted immunity. He should do the same now, they argued, so that his evidence could be interpreted in that light.

“That man might have been in the dock himself, he acknowledges that,” Gearty said.

In response, Brendan Grehan SC, defending, said he found Gearty’s comments quite extraordinary and disagreed that Moran could have found himself on trial.

He argued it would be highly prejudicial to Drumm for the jury to know Moran had immunity from prosecution as it suggested the witness was guilty of something.

The judge ruled in favour of the defence and agreed that the jury should not be told this fact.

Moran was the highest-ranking former Anglo executive to give evidence against Drumm.

A lengthy "voir dire", a trial within a trial, took place over three days in mid-April, as the defence prodded and probed the evidence of the State's only expert witness, Dan Taylor of accountants BDO.

Taylor had been asked by the prosecution to study the transactions between Anglo and ILP and give his professional opinion on them. He had complied a detailed report for the purposes of the trial.

But Drumm’s lawyers fought long and hard to keep his evidence out of the trial, a battle they eventually lost.

Circular transactions

In the absence of the jury, the witness was led through his evidence by prosecution lawyers and then cross-examined at length by Bernard Condon SC, representing Drumm. He remained good-humoured as questions about questions were fired at him relentlessly for hours.

The circular transactions could have continued ad infinitum, he said.

“They were only limited by the amount of time it took to put them through the bank’s payment system,” Taylor said.

He said everything he saw indicated the transfers were unsecured, passing cash with no underlying security.

There was no contract between the two banks, he said.

During this cross-examination, Condon informed the judge that he believed the witness had been coached prior to testifying and asked her to rule on whether he should be allowed to give his evidence before the jury.

The judge said she didn’t believe the witness had changed his mind or his evidence during the three days that he had been in the box.

“I believe he was not coached or prompted or persuaded by anyone,” she said.

But that hurdle had only been overcome when another row flared up in its place.

Taylor said that the transactions between Anglo and ILP were, in his opinion, the “artificial passing of money back and forth between the banks”.

He was asked to momentarily leave court while the defence objected to his use of the word “artificial”, arguing that the word had certain connotations and may colour the minds of the jury.

The judge ruled that the witness could use this word to describe the transactions to the jury.

However, somewhat ironically, when it came time for Taylor to deliver his evidence in open court he didn’t use the word “artificial” and instead described the inclusion of the transactions in the publication of Anglo’s preliminary accounts as “misleading and inaccurate”.

This prompted Drumm’s defence team to jump to their feet, and once the jury had departed court 19 they asked the judge to discharge the 10 men and four women because “the words the witness had used meant that the defendant could now not get a fair trial”.

They argued that because Taylor had used the word “misleading”, one of the words that appeared on Drumm’s indictment in relation to his false accounting charge, it implied his guilt.

Prosecution lawyers conceded that it was a pity it had happened, but said the jury could be asked to ignore this phrase when deliberating.

Half an hour of palpable suspense followed as the two legal teams huddled on opposite sides of the marbled floor of the Criminal Courts of Justice.

The judge returned to court and refused to discharge the jury, saying the opinion of an expert is simply an opinion and the jury was entitled to believe or disbelieve his evidence.

Drumm looked skywards, rolled his eyes and mouthed what looked very like an expletive. His best chance to have the jury discharged, and for the trial to collapse, had come and gone.

She followed this up with a warning later that day, telling the 10 men and four women that it was not trial by accountant, but trial by jury.

The defence opted not to cross-examine Taylor following this ruling, and his evidence went unchallenged.

Anglo tapes

Days were taken up with Drumm’s lawyers arguing for portions of the recorded phone calls to be excluded from evidence, stating that the tapes existed only because Bowe’s phone calls were being recorded, while the defendant didn’t know he was being taped.

The "Anglo tapes" were now a cultural phenomenon, they said, and a simple Google search resulted in hundreds of thousands of hits, bringing the user straight to an Australian talk show discussing their content.

They were prejudicial to the defendant, they submitted.

Prosecuting counsel argued that the disputed extracts of a particularly colourful call were in fact highly relevant, because "they said a lot about Anglo's perception of the Financial Regulator and Central Bank in 2008."

By calling the Financial Regulator “Freddy the fly” it showed Drumm thought of him as “a minuscule person who buzzes around annoying people and doing his fly-like best to disturb the doings of those whose lives he intersected,” said prosecution barrister Paul O’Higgins SC.

At the 11th hour, in week 15 of the trial, Drumm’s lawyers made an application to have the false-accounting charge against him dropped.

He had no intention of making a gain for himself and there was no evidence to show he knew the material in the end-of-year accounts was misleading, false or deceptive.

The prosecution countered that the defendant knew every detail of the case from its infancy and was “the father who gave birth to the publication of the false financial statements”.

The judge agreed with them, and said it was safe for the jury to consider this charge.

“It’s not necessary to show actual gain or loss, it’s the intention that’s important. The indictment was carefully drafted to reflect that intention,” she ruled.