In the months after Brian Lenihan’s bank bailout, Keogh, for the first time in his life, began to pay attention to the behavior of the Irish bankers. His own shares in AIB, once thought to be as sound as cash or gold, were rapidly becoming worthless, but the bank’s executives exhibited not the first hint of remorse or shame. AIB’s chairman, Dermot Gleeson, and its CEO, Eugene Sheehy, troubled him the most. “The two of ’em stood up, time and again, and said, ‘Our bank is one hundred percent sound,’” explains Keogh. “As if nothing at all was the matter!” He set out to learn more about these people in whom he had always placed blind trust. What he found—high pay, corporate boondoggles—outraged him further. “The chairman paid himself four hundred seventy-five thousand to chair twelve meetings!” he still shouts.
What Keogh learned remains both the most shocking and the most familiar aspect of the Irish catastrophe: how easily ancient financial institutions abandoned their traditions and principles. An upstart bank, Anglo Irish, had entered their market, and professed to have found a new and better way to be a banker. Anglo made incredibly quick decisions: an Irish property developer could walk into Anglo’s office in the late afternoon with a new idea and walk out with hundreds of millions of euros the same night. Anglo was able to shovel money out its door so quickly because it had turned banking into a family affair: if they liked the man they didn’t bother to evaluate his project.
Rather than point out the insanity of the approach, the two old Irish banks simply caved to it. An Irish businessman named Denis O’Brien sat on the board of the Bank of Ireland in 2005, when it was faced with the astonishing growth of Anglo Irish. (Anglo Irish was about to double in size in just two years.) “I remember the CEO coming in and saying, ‘We’re going to grow at 30 percent a year,’” O Brien told me. “I said how the fuck are you going to do that? Banking is a five-to-seven-percent-a-year growth business at best.”
They did it by doing what Anglo Irish had done: writing checks to Irish property developers to buy Irish land at any price. AIB, which had paid its lending officers based on how many dollars they lent, opened a unit nicknamed ABA (Anybody but Anglo), dedicated to poaching Anglo’s biggest property developer clients—the very people who would become the most spectacular busts in Irish history. In October 2008 the Irish Times published a list of the five biggest real estate deals from the past three years. Allied Irish lent the money for ten of the fifteen, Anglo Irish for just one. On Irish national radio the insolvent property developer Simon Kelly, who personally owes 200 million euros to various Irish banks and who belongs to a partnership that owes another 2 billion euros, confessed that the only time in his career a banker became upset with him was when he repaid a loan, to Anglo Irish—with money borrowed from Allied Irish. The former Anglo Irish executives I interviewed (off the record, as they are all in hiding) speak of their older, more respectable imitators with a kind of amazement. “Yes, we were out of control,” they say, in so many words. “But those guys were fucking nuts.”
Gary Keogh thought about how Ireland had changed from his youth, when the country was dirt poor. “I used to collect bottle caps,” he says. “Now the health service doesn’t even bother to take back crutches anymore? No! We’re far too wealthy.” Unlike most people he knew, Keogh had no debts. “I had nothing to lose,” he says. “I didn’t owe anyone any money. That’s why I could do it!” He’d also just recovered from a serious illness, and felt a bit as if he was playing with house money. “I had just got a new kidney and I was very pleased with it,” he says. “But I think it must have been Che Guevera’s kidney.” He describes his elaborate plot the way an assassin might describe the perfect hit. “I only had two rotten eggs,” he says, “but by God they were rotten! Because I kept them six weeks in the garage!”
The AIB shareholders meeting of March 2009 was the first he’d ever attended. He was, he admits, a bit worried something might go wrong. Worried parking might be a problem, he took the bus; worried that his eggs might break, he designed a container to protect them; worried that he didn’t even know what the room looked like, he left himself time to case the meeting hall. “I got to the front door early and had a little recce,” as he puts it, “just to see what was going to happen.” His egg container was too large to sneak inside, so he ditched it. “I had one egg in each jacket pocket,” he says. Worried that his eggs might be too slippery to grip and throw, he’d wrapped each of them in a thin layer of cellophane. “I positioned myself four rows back and four seats in,” he says. “Not too close but not too far.” Then he waited for his moment.
It came immediately. Right after the executives took their places at the dais, a shareholder stood up, uninvited, to ask a question. Gleeson, AIB’s chairman, barked, “Sit down!”
“He thought he was a dictator!” says Keogh, who had heard enough. He rose to his feet and shouted, “I’ve listened to enough of your crap! You’re a fucking bastard!” And then he began firing.
“He thought he had been shot,” he says now with a little smile, “because the first egg hit the microphone and went Pow!” It splattered onto the shoulder pad of Gleeson’s suit. The second egg missed the CEO but nailed the AIB sign behind him.
Then the security guards were on him. “I was told I would be arrested and charged, but I never was,” he says. Of course he wasn’t: this was, at bottom, a family dispute. The guards wanted to escort him out, but he actually left the place on his own and climbed aboard the next bus home. “The incident happened at ten past ten in the morning,” he says. “I was home by ten to eleven. At ten past eleven the phone rang. And I was on the radio for an hour.” Then, but briefly, all was madness. “The press descended on the house and they wouldn’t get out,” he says. It didn’t really matter; he wasn’t sticking around. He’d done exactly what he’d planned to do and saw no need to make a further fuss. He flew out of Dublin Airport at six the next morning for a long-planned Mediterranean cruise.
* On July 10, 2011, after a phone-hacking scandal, News of the World was closed.
† Lenihan died in June 2011, seven months after this interview.
IV
THE SECRET LIVES OF GERMANS
By the time I arrived in Hamburg, in the summer of 2011, the fate of the financial universe seemed to turn on which way the German people jumped. Moody’s was set to downgrade the Portuguese government’s debt to junk bond status, and Standard & Poor’s had hinted darkly that Italy might be next. Ireland was about to be downgraded to junk status, too, and there was a very real possibility that the newly elected local Spanish governments might seize the moment to announce that the former local Spanish governments had miscalculated, and owed foreigners a lot more money than they previously imagined. Then there was Greece. Of the 126 countries with rated debt, Greece now ranked 126th: the Greeks were officially regarded as the least likely people on the planet to repay their debts. As the Germans were not only the biggest creditor of the various deadbeat European nations but their only serious hope for future funding, it was left to the Germans to act as moral arbiter, to decide which financial behaviors would be tolerated and which would not. As a senior official at the Bundesbank put it to me, “If we say no, it’s no. Nothing happens without Germany. This is where the losses come to live.” Just a year ago, when German public figures called Greeks cheaters, or German magazines ran headlines like WHY DON'T YOU SELL YOUR ISLANDS, YOU BANKRUPT GREEKS?, ordinary Greeks took it as an outrageous insult. In June of 2011 the Greek government started selling islands, or at any rate created a fire-sale list of thousands of properties—golf courses, beaches, airports, farmlands, roads—that they hoped to auction in order to help repay their debts. It’s safe to say that the idea of doing this had not come from the Greeks.