September 3rd, 2011, 03:13 AM
In the brig
Join Date: Sep 2007
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Anglo Irish Bank "partied" in days up to Govt guarantee
'This is Anglo so there is only one thing to do – party!'
ANGLO IRISH Bank spent hundreds of thousands of euro on client entertainment and staff parties in the weeks and months leading up to the government bank guarantee in September 2008 and the nationalisation of the bank in January 2009.
On September 5th, 2008 – just three weeks before the government introduced the bank guarantee to save Anglo from collapse in the first instance – the bank spent €80,000 on a party for about 600 staff, at the Mansion House in Dublin.
The cost excluded accommodation in hotels for staff who travelled from the bank’s regional offices for the party. The drinks bill alone on the night amounted to €24,000 and staff were entertained by a live band.
David Drumm, the chief executive of the bank, organised the party – themed the “Back To School Doombuster Party” – to lift staff spirits at a time when the financial crisis was deteriorating, banks were struggling to fund themselves and the economy was turning deeply negative.
Mr Drumm invited staff to the party in an e-mail the previous July: “Dear colleague, the stock markets are down. They say the economy is in recession. It rained most of the ‘summer’. The holidays are over. This is Anglo so there is only one thing to do – party!”
While the bank’s financial position was becoming more precarious in December 2008, the bank spent €175,000 on a Christmas party for staff, again at the Mansion House.
That month the bank also spent €53,000 on hampers and wine for clients and €24,000 bringing customers and their children to the annual Christmas panto in the Gaiety Theatre in Dublin.
The previous year, Anglo spent €272,000 on Christmas staff parties in Dublin, London and Boston and €229,000 on three Christmas parties for clients in addition to €87,000 on hampers and wine for customers.
Since taking Anglo into State ownership the following month, the government has committed €29.3 billion of taxpayer money into what was once Ireland’s third-largest bank to cover heavy losses on property loans as a result of the economic crash.
Anglo’s spending on client entertainment and staff parties are detailed in a new book by Irish Times journalist Simon Carswell, Anglo Republic: Inside the Bank that Broke Ireland , published on Monday.
In the year before nationalisation, the bank spent vast sums of money bringing clients to sporting events and paying for match tickets.
During the year Anglo paid €21,000 for Manchester United tickets, €19,000 for Chelsea season tickets, €42,000 for tickets to Ireland’s home rugby games against New Zealand and Argentina and €9,000 taking US clients to see the Boston Red Sox baseball team.
The bank also paid €140,000 for 10-year premium rugby tickets for the Aviva Stadium in Dublin.
In June 2008 Anglo flew some of its biggest customers in the US to Ireland for the bank’s annual golf trip to play courses along the west coast.
The flights for the trip cost €104,000 and hotel accommodation €103,000. The bank spent €7,000 on silver cufflinks specially made by a Dublin jewellery designer for the clients to commemorate the trip.
Golf was an important means for Anglo to entertain clients and attract new business to the bank.
As well as spending €1.38 million on golf paraphernalia, including more than €200,000 on golf balls, between 2006 and 2009, Anglo spent €300,000 in 2008 sponsoring a golf tournament for businesses interested in entering a team. The bank announced English golfer Lee Westwood as “a brand ambassador” to promote the tournament, which was played at some of the best courses in Ireland and Britain.
€7,000 on cufflinks - interesting. It's like partying on the Titanic after the Iceberg hit in first class.