Analysis: Drumm faces dilemma after bail denied by Boston judge

Sitting in a New England detention centre facing Christmas and at least eight more weeks in custody after that, former Anglo Irish Bank chief executive David Drumm has a dilemma on his hands.

Denied bail by a Boston judge in his extradition case, the former banker has already been in custody for two months fighting a case that is not even deciding on the alleged crimes he has been charged with.

In other words, the battle Drumm is putting up to stop his return to Ireland may result in him spending more time behind bars than any conviction he might face if and when he is returned home.

He is facing 33 criminal charges in Ireland, most of which relate to the lending-to-buy-shares scheme designed to prop up Anglo’s share price as it was crashing under the weight of the global financial crisis and rumours of businessman Sean Quinn’s massive punt on the bank.

Other charges relate to the back-to-back depositing of €7 billion between Irish Life & Permanent and Anglo aimed at flattering the balance sheet of Mr Drumm’s bank, masking a huge run on deposits.

The writing was on the wall when, during Mr Drumm's bail hearing in the John Joseph Moakley Courthouse in Boston on November 13th, the judge asked a very pointed question about the Dubliner.

Mr Drumm’s lawyer Edward McNally, a top legal gun, one of four hired by the former bank chief, had said that two of Mr Drumm’s colleagues were granted bail as they awaited trial on some of the same charges that his client is charged with back in Ireland.

He also pointed out that a jury convicted the two but a judge found that he could not jail them because of the role the banking regulator played in supporting the illegal transactions they executed.

Judge Donald Cabell asked whether Mr Drumm was superior to these two former colleagues. Mr McNally blanked, saying he did not know.

Assistant US attorney Amy Burkart said that they were subordinate to him and noted how the judge in the Irish criminal case found Mr Drumm to be the instigator and author of the illegal share scheme.

Arguing that Mr Drumm was a flight risk and had a damning bankruptcy ruling against him that showed he “cannot be trusted”, she wanted him held until his extradition hearing, since scheduled for March 1st, 2016.

Judge Cabell, in a 11-page ruling filed in the Massachusetts District Court on Thursday night, sided with the government's argument on Mr Drumm's more senior role at Anglo.

Cited as one of several reasons why Mr Drumm was denied bail, the judge said that the two defendants back in Ireland were not in a similar situation to the scenario the former Anglo chief executive is in.

“They were Mr Drumm’s subordinates, were charged with fewer crimes, voluntarily cooperated with Irish authorities and voluntarily surrendered in Ireland,” said the judge.

The magistrate said that “Mr Drumm might indeed be released on bail in Ireland but that would be an issue for the Irish courts to decide”.

At the outset when he first appeared before him three days after his arrest at his home in the Boston suburb of Wellesley on October 10th, Judge Cabell had made it clear to the former banker that extradition cases carry a presumption that the defendant would not be granted bail.

He said they were akin to a probable cause hearing where the standard of proof was much lower: the government attorneys needed only prove that Mr Drumm had a case to answer back in Ireland.

It is pretty unusual for a US court to grant bail pending an extradition hearing.

In his ruling, the judge said the government had not unreasonably delayed bringing charges against him, that there was a “diplomatic need” to seek detention and that there was no basis to believe the extradition proceedings would “take an exceptionally long period of time to resolve”.

“It is true [Drumm’s] continued detention will create issues of varying degrees of strain and inconvenience for both him and his family, but there is insufficient evidence to suggest that it would be to such a degree to distinguish this case from other extradition cases,” he said.

Mr Drumm had “not established the presence of special circumstances sufficient to overcome the presumption in favour of detention in extradition cases”, he concluded.

Given Mr Drumm’s decision to launch a second appeal against his rejected bid for US bankruptcy and freedom from €10 million in debts, an appeal against Judge Cabell’s ruling to a higher court, the First Circuit Court of Appeals, would not be a surprise.

He is already appealing his bankruptcy ruling to that Massachusetts-based court.

The 49-year-old must also weigh though, following this setback, whether the bigger fight is now back in Ireland: defending himself against the charges he faces relating to his time at Anglo Irish Bank.