October 19, 2012 7:18 pm

The NatWest one: Gary Mulgrew

One of a trio of British bankers extradited to the US to face Enron-related charges, Gary Mulgrew talks about prison life and why he still believes he did nothing wrong
Giles Darby, David Bermingham and Gary Mulgrew outside the European Court of Human Rights, Strasbourg, in June 2007©Edmond Terakopian/PA

(From left) Giles Darby, David Bermingham and Gary Mulgrew outside the European Court of Human Rights, Strasbourg, in June 2007

Gary Mulgrew, gang leader of the NatWest Three, meets me in his new pub, the Noble House in Brighton. Before he took it over with his two partners it was a bit of dive, but it’s now been Farrow & Balled with smoky shades of paint and shabby-chic sofas, aiming to attract a rather different sort of clientele. Mulgrew is a tall, strapping fellow – with a big thistle tattoo on one arm – and it is easy to imagine him as the Glaswegian nightclub bouncer he once was while he was a student, studying business at the University of Strathclyde. It is immediately apparent that he likes to play the joker: he is wearing a T-shirt for our interview which is printed with a black-and-white photograph of a bank robber.

But a recap might be necessary for those who have only a hazy memory of one of the first big banking scandals. “The NatWest Three” were a trio of British bankers who were implicated in the Enron story. In June 2002, the US Justice Department filed charges against Mulgrew, Giles Darby and David Bermingham, employees of Greenwich NatWest (a capital markets division of the bank). It claimed they co-ordinated the sale of NatWest’s holdings in various Enron-related investments to a partnership controlled by Enron’s chief financial officer Andrew Fastow. The partnership was “off-the-books” and allowed Enron’s liabilities to be hidden from investors. Allegedly with the help of Mulgrew and company, Fastow bought the shares from NatWest at below-market prices, then sold them for their real value, making more than $12m for himself and $7.3m jointly for the NatWest Three.

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The case became a cause célèbre in the UK, partly due to the aggressive approach of the American investigators. In July 2006, after a long court battle, the NatWest Three were extradited to the US. They were electronically tagged for 17 months, before finally agreeing to a plea bargain in which they agreed to pay back the money and which resulted in their serving 37 months in a US jail. They were eventually transferred to the UK to serve out their sentences, and were released in August 2010.

Mulgrew has written a riveting prison memoir, Gang of One (the title refers to his refusal to join a prison gang), which was published earlier this year, and is now out in paperback. It is about to be made into a Hollywood film starring Dougray Scott.

. . .

Mulgrew was born in 1962 in Pollock, Glasgow, one of three brothers. When he was three months old, his father disappeared, leaving his mother to bring up the family on her own. She was unable to cope and the boys were sent to a children’s home when Mulgrew was four. (His mother’s story is remarkable, too – she got her children back, and held down two jobs, studied at night and rose through the ranks of Scottish politics to become a Labour MSP and deputy presiding officer of the Scottish parliament.)

Gary Mulgrew©Kalpesh Lathigra

Gary Mulgrew

On leaving university, Mulgrew’s first job was as a bank teller at a NatWest branch in Manchester. None of his friends could believe it, he says – at the time he would have been voted man least likely to become a banker. He credits his success at NatWest, where he worked for 17 years with postings to Tokyo and New York, to supportive bosses who were excellent mentors. His particular talent, however, was managing people well and making it fun: “I’m not technically gifted so I was never the numbers guy or stuff like that. A lot of bankers lack personality, let me tell you,” he jokes. “So somebody with even a smidgeon of personality is gonna be like a rock star!”

His motivation was more about seeing the world and having great experiences than being flashy with money. “I was never motivated by the money,” he says. “I never wore a Rolex watch, I don’t drink champagne, I’ve never taken cocaine or drugs in my life … I’ve driven the same car, a Saab, for 14 years. There was a part of me that deliberately wanted to be counter-culture. When people used to come and visit me in New York from Glasgow, I’d always pick them up in a limo, just for a laugh. But I filled it with cans of Scottish McEwan’s Export and loads of Scottish fiddle music.”

In New York he met Laura, a New Yorker and former model. They married, and had their first child, Calum, who is now 16. Mulgrew travelled widely: his role was to open up NatWest into the emerging markets – Brazil, Argentina, Peru, Chile, Russia – and he was away from home a lot. By his mid-thirties, he had risen to the position of senior vice-president, global structure of trade finance.

At this point, he was earning a respectable but not outrageous $100,000 with 10 per cent in bonuses, but things started to change when NatWest acquired the investment bank Greenwich Capital. Mulgrew describes it as “run by some really sophisticated, heavyweight, investment bankers and because my business was in the emerging markets, it was plonked into the investment bank”.

By now, he was back working in London, with Laura, Calum and their new daughter, Cara Katrina, installed in a big pile in Essex: “ When I first saw it, I found it hard not to laugh … It was a beautiful, old Victorian rectory but it was ostentatious – five acres, tennis court, swimming pool – and it was just embarrassing, although the trees were gorgeous. I didn’t want it but Laura promised me that this would make her happy.”

One of his flaws, which Mulgrew readily identifies, is the need to be liked. He first realised there was a bit of a problem when colleagues in London started using an acronym “FOG” (meaning Friend of Gary). “With the teams I had created, I was always trying to say ‘I’m a nice guy’ and needing that reassurance, which you can’t do as a leader. It’s quite hard to change but, in the end, it’s unhealthy to want to be liked that much.”

The next, and what proved to be final, phase of Mulgrew’s banking career – when he started to make the millions we associate with unpopular bankers – must have been psychologically battering for him, since his own rewards were often a direct result of firing the very people whose approval he was seeking. He remembers the first time he got a million-dollar bonus, for staying at NatWest during the choppy takeover months. Mulgrew was gobsmacked, but his manager told him: “You’ve got to stop thinking like a commercial bank manager. You should be saying, I’m worth much more than a million dollars!” By the time the Enron deal came along, Mulgrew had earned around £4m-£5m in bonuses in three years.

. . .

In his conscience and in his own mind, Mulgrew is clear that he never committed a crime. Instead he believes that the Enron unfurling demanded a sacrificial lamb or three, and that he and his colleagues were convenient scapegoats. “There were literally hundreds of different bankers who had invested in different transactions with him [Fastow], and yet there were only three who were ever indicted for anything and that was us stupid mugs,” he says.

While I was interviewing him, I noticed that he constantly played with a simple wooden cross on a leather lace around his neck. In his book, he describes this crucifix, which was made by a fellow prisoner. One day, Mulgrew (a Catholic) came back to his bunk and found it under his pillow – “a gift offered without words”. He describes many such small acts of kindness in prison, which offset the terrible scenes of violence. He has stayed in touch with some prison friends, particularly one, a Native American called Chief.

I was able to speak to Chief on the phone as he is now out of prison. When I asked about his friend Gary, Chief corrected me, saying, “Ma’am, he is not my friend, he is my brother.” What was his initial impression of Gary? “I saw there was a lot of confusion in him and a lot of angst, and that he realised how humble he had to become. When I heard his accent, I thought he was definitely going to need help. And Gary wouldn’t stop saying ‘Thank you’. Just those two words go a long way.” What did he think of Gary’s book? “I really liked how he exposed the conditions behind the fence and the way the staff treated us. Most important is the regret and remorse he showed. You could sense at the time that it was genuine.”

Gary Mulgrew with his daughter, Cara Katrina, and son, Calum, in England in 2004

Gary Mulgrew with his daughter, Cara Katrina, and son, Calum, in England in 2004

Despite the anecdotes and the laughs, Mulgrew is haunted. His ex-wife (he and Laura divorced in 2006), who had received 65 per cent of his wealth in the settlement, left for Tunisia a few days after he was extradited, taking their daughter, Cara, with her. Laura had fallen in love with a Tunisian man, and it is thought they have made their new home in Tunisia. Mulgrew’s sense of having failed as a father is an ongoing source of sorrow, although it is definitely a great bonus for him that Laura left their son Calum in England. Despite the years apart, father and son now seem to be close.

Mulgrew has a large chest he keeps for Cara, and every time he and Calum go to a show or on holiday, he fills it with tickets and mementos for her. His book is, in part, a way of telling her how he has never stopped loving her. He has gone to Tunisia on numerous occasions to try to track her down; paying what turned out to be stupid money to unsuccessful investigators on false leads.

Our conversation weaves back and forth to this central unhappiness in his life, and what he plans to do about it, but I also want to ask him what he thinks about the status (or lack) of bankers in Britain today. In the wake of the Bob Diamond and Libor scandals, he has been invited on to various media discussion panels, and each time he’s asked the producers why they want him: “They want a bad guy, I think. It’s basically banker bashing. It’s an awkward one for me if you read about the hysteria that’s surrounding bankers at the moment … ” Is he saying he doesn’t think the strong emotion about bankers is justifiable? “It is – but everyone is innocent until proven guilty. So to start saying things like, ‘Who’s going to jail?’ is very reminiscent of what happened to us through the Enron crisis.” The extradition laws concern him greatly: particularly the case of the vulnerable Gary McKinnon, the British man whom the US was seeking to extradite for hacking into their military computers. (Theresa May, the home secretary, blocked the extradition earlier this week.) Mulgrew writes graphically in Gang of One of the brutality of the prison experience, and was fearful of how McKinnon would cope if he had been extradited.

Mulgrew seems to see-saw between feeling positive and negative about the way his life has turned out. He does have a tendency to crack jokes about his time in prison, but there are occasions when his bitterness about his conviction seeps out. “When I got back to the UK, I found I’m not banned by the FSA,” he says. “I’m allowed to be a director, NatWest hasn’t bothered me [indeed, they have enabled him to set up his new businesses], and my life goes on and it’s almost like it didn’t happen. But it did.

“When I listen to what people are saying now about bankers – I think it’s expediency. Someone has to go to jail – and you hope to God it’s the right person or people – not just somebody to make everyone feel better by jailing some banker. Because I’ve lived that – I was one of the bankers everybody felt better about, right?”

Mulgrew looks forward to working on other writing projects. His relationship with his long-term partner, who looked after Calum along with her own children when Gary was in prison, broke down a year or so ago, around the time he had a meltdown about not being able to find his daughter. I ask him if he thinks he might get into another relationship. “In the future? If I’m capable of it. I don’t know if I am capable. I live in my own little world at the moment. If you’d asked me 20 years ago what mattered to me more than anything else, it was to be a good father,” he says. “And whatever way you look at it, whether it’s completely my fault, or partly my fault, the choices I have made, meant that I’ve been a f***ing disaster. It’s something I’m always trying to repair, and time’s running against me.

“I really want to find my daughter, so that I can still change what she might become. I think she’ll be very damaged by 18, if she’s not already … if it’s not too late. But I’m not full of hatred, I’m full of hope and belief that I’ll find her.”

“Gang of One”, by Gary Mulgrew, is published by Hodder Paperbacks (£8.99)

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