Having not returned to Ireland since his ouster, Drumm is currently facing serious legal issues, but continues to maintain that he was not alone in causing the Anglo Irish Bank’s collapse.
David Drumm came to Anglo Irish Bank in 1992 when the company was headed by Sean Fitzpatrick. The bank had been established nearly 30 years before and had grown into a billion-pound institution, specialising in business and commercial banking in Austria, Switzerland, the UK, the US, and the Isle of Man. Despite being in his mid-20s at the time of his hire, Drumm established a reputation for himself in the bank, founding Anglo Irish Bank’s presence in the US in 1998. Drumm was eventually chosen to replace Sean Fitzpatrick as CEO in 2005. After the promotion, Fitzpatrick stayed on as Chairman of the Board.
Like many banks and lenders during the years leading up to the financial crises, the Anglo Irish Bank became heavily involved in real estate lending. Unfortunately, the company often lent funds at a loan-to-value rate of 100 percent, causing it to have significant exposure in the event that investments failed or returned low amounts. When the real estate market began to lose value, the Anglo Irish Bank began to lose substantial amounts of money and was eventually nationalised by the government of Ireland to keep it afloat. During the process, officials discovered that the bank had been making extraordinary loans to its directors, including Fitzpatrick, so that they could purchase shares of the company to keep it in business. The bank had also been transferring these loans to other institutions to avoid reporting them on their financial statements. Following these revelations, Fitzpatrick and Drumm both resigned in 2008 amid government investigations.
Drumm has not yet been charged with any criminal actions, but he has since fled Ireland to the US, where he remains to this day. The Anglo Irish Bank, now called the Irish Bank Resolution Corporation, is pursuing Drumm for repayment of bank loans, claiming that Drumm owes the company €8m. Upon receiving his US visa in late 2009, Drumm immediately filed for bankruptcy protection. In 2011, the bankruptcy court sold his $4.6m home in Cape Cod, Massachusetts for a reported $3.8m to pay toward his debts.
In the meantime, the Irish Office of the Director of Corporate Enforcement continues investigating whether Drumm and Fitzpatrick committed criminal acts during their tenures at the bank. Among the allegations are claims that Anglo Irish Bank lent money to ten prominent businessmen who then used the funds to buy up stock, and that the bank received a late deposit just before its fiscal year ended and then sent the funds back out afterward to make the balance sheet look better than it was. Reports suggest that officials believe both Drumm and Fitzpatrick were complicit in these transactions. For his part, Drumm claims that Irish regulators knew about the bank’s lending practices and that the investigation has been a “witch hunt”.