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	A Bad Transfer Deal That Only Got Worse Sunday Business Post [Ireland] March 18, 2007 http://www.sbpost.ie/post/pages/p/story.aspx-qqqt=NEWS+FEATURES-qqqs=news-qqqid=21947-qqqx=1.asp Five years after the religious orders promised to transfer €80 million of property to the state, to help foot the bill for child abuse, the value of the properties transferred has fallen well short of the target, reports Political Correspondent Pat Leahy. Five years after the religious orders promised to transfer €80 million of property to the state, to help foot the bill for child abuse, the value of the properties transferred has fallen well short of the target, reports Political Correspondent Pat Leahy. When Taoiseach Bertie Ahern made his apology on behalf of the state to the victims of physical and sexual abuse in residential institutions in 1999, it was accepted in government that a compensation scheme would ultimately follow. Since the foundation of the state, the authorities had effectively subcontracted the job of caring for some children - typically orphans, children whose parents could not care for them and those who had come to the attention of the law - to certain religious orders. In care, some of these children were abused horrifically. As adults they had found their voice, and the government resolved that the state should hold its hands up. There would be financial consequences, but it was the right thing to do, ministers agreed. It was assumed that the religious orders would accept their share of the blame and shoulder their share of the financial responsibility for making reparation to people whose lives, in many cases, had been blighted by the indifference of the state and the crimes of members of the religious orders. The state and the church had yet to agree a share out of the costs but most ministers and officials assumed that the division would be on a 50-50 basis, on a total cost that the state estimated - with the input of the religious - would be in the region of »100 million (€127 million) to »200 million. Things turned out somewhat differently. The cost The final bill is not in yet, but it has been estimated by the Department of Education that it will be in the region of €1.2 billion. Over 14,500 applications for compensation have been made to the Redress Board, set up in 2002.The average award is about €71,000. Under an agreement struck in early 2002 between the religious orders and the state, the religious contribution would be €128 million in cash, property and counselling services. The property transfers were to make up the greater part - €80 million - of the religious contribution. The religious received an indemnity against any further court actions against them. However, the list of actual properties which were to make up the €80millionwas always kept private. In spite of numerous requests over the past five years, neither the state nor the religious orders would release the details. Over recent months The Sunday Business Post has succeeded in assembling the previously secret list of 64 properties that have either been transferred or are in the process of being transferred from the religious orders to the state or to charity/community organisations. An examination of the list of properties shows unequivocally that whatever the state has got out of the deal, it certainly isn't €80 million worth of marketable property in the generally understood sense. Instead a series of about 64 health, community and educational facilities have been transferred (or are awaiting transfer) to the state or to charities. However, many of the properties were previously maintained, funded and staffed by state bodies. In few of these instances has the state realised any financial value from the transaction. Most of the properties have been transferred to either the Health Service Executive (HSE) or the Department of Education, with a number of charities such as the Alzheimer Society, the Irish Wheelchair Association and the St Vincent de Paul also appearing as beneficiaries. The properties transferred to the charities are counted as part of the orders' contribution to the state. Schools for scandal The Department of Education refused to supply individual valuations for the 16 properties transferred to it under the agreement. Instead, it says that individual valuations will be released once the negotiations between its legal representatives and the orders are finalised. It refuses to say which individual transfers have been agreed or to release their valuations. In a statement last week, the Department of Education said: "The legal transfer is a slow process and it will take some time to finalise the transfers. We will not be in a position to release the information until this is completed." It's not just a slow process - some aspects seem to have come to a halt. In 2004 an official from the department told an Oireachtas committee: "As for the other properties already transferred, while no formal acceptance was made at yesterday's meeting, it is expected that there will be substantial progress within the next three to four weeks. "At that stage, the minister will be in a position to release further details. I am not in a position to give those details today. However, I expect a number of meetings over the next two to three months to bring this matter to a finality." That was two and a half years ago. In all cases, the department says that the newly-owned properties will be used to "develop school provision in the future", although it declines to go into any specifics. In several cases, the properties transferred are school buildings, which have been for many years maintained by the state. It is difficult to see what the state gains by a change in ownership. In other cases, the lands are described as "lands/site". However, closer inspection shows at least some of these to be playing pitches - such as those adjacent to the Sisters of Mercy schools in Carna, Co Galway and Doon, Co Limerick. Several other properties, including those at Moate, Glenamaddy, Enniscorthy and others, are existing schools. A statement from the department said: "Most of the properties accepted by the department were school buildings or else sites/lands adjacent to school buildings." Title on the properties So what has changed with the transfer of title? Almost nothing, it seems. Asked if there had been any change to the management or governance of the schools since the title was transferred, the department says: "Governance/ managerial practices in the school are a matter for the relevant patron body and the board of management of the school and are not affected by the change in title." And who or what is the patron body? "The patron body is the order," says a spokeswoman for the Department of Education. In other words, actual control of the school hasn't changed since the title was transferred. Very little else has either. Despite their purported value on paper, it is very difficult to see any real benefit to the state from these transactions. While formal title has in many cases passed from the religious orders to the state, in few cases is the actual property marketable. There has been no inflow of funds to the state coffers from the property portfolio. For the religious orders, however, the benefits are very clear. The health portfolio More detail is available for the 26 properties transferred to the health boards. Examination of these "transactions" raises even more questions than for the schools transferred. In several cases, the agreed "price" of an individual property is considerably greater than the valuation submitted by the religious order. In other words, the religious orders submitted a property as part of the list and put a value on it. However, instead of bargaining the "price" down, the state has bargained the "price" upwards, valuing the property at more than the religious orders actually sought. Last week, the HSE said that this discrepancy was because of a rising property market. However, at the time the deal was agreed, the state specifically insisted that the religious orders should not be able to delay individual transfers to piggy-back on a rising property market. The rise in prices occurs despite the fact that the state promised to discount from the value of the property the cost of any improvements funded by the state. This inflation has occurred in every case for which the details are available. In one case, St Colemans, Rushbrook, Cobh, Co Cork (a former girls' industrial school), the state settled for a valuation 40 per cent higher than the original valuation submitted by the order. This is also one of the properties that has not yet been formally transferred to the state; there are, the HSE says, "outstanding issues being considered by the Commissioner for Charitable Donations". The state has always refused to say what these "outstanding issues" are. However, according to informed sources, in the case of many religious-owned properties, they were bequeathed to the orders but with restrictive covenants. In other words, properties were left to the orders but with the stipulation that they should be used for education, or care of the destitute, or some other specified purpose. Just transferring some of these properties to the state is not as simple as it might seem. The are other curiosities about the properties transferred to the HSE. Many of the valuations are very similar:13 of the 26 properties are valued at between €200,000 and €300,000, and three properties are given identical valuations of €250,000. Two are over €4 million and another two are over €1 million. All the rest are under €1 million. The total value of the 26 properties transferred to the HSE is €18.5 million - the only ones for which valuations are available - with an average valuation of just over €700,000. In the total scheme, this leaves over €50 million of the religious orders' contribution to be accounted for. The Department of Education says that €10 million has been provided in lieu of property, but this still leaves €40 million to be made up by the combination of school buildings, community facilities and playing fields. When the department eventually does release the individual valuations, it will be interesting to see how this is accounted for. Surprise? None of this was foreseen by the politicians who made the decisions back in 2002.Or was it? The circumstances of the agreement have been shrouded in mystery and controversy. The attorney general's office was not represented at crucial meetings that the then education minister Michael Woods and his secretary general John Dennehy had with representatives (legal and otherwise) of the religious orders. Initial estimates of the cost of the compensation scheme were between €100-€200 million, though as custodians of the institutions where the abuse took place, the religious orders had access to significantly better information than the state. At a distance from the deal and in the light of what happened, it appears that the orders played this advantage for all it was worth. The deal itself was signed on the day before the last government left office, and ratified by the cabinet that day. No financial memorandum was produced at cabinet. Hours later Michael Woods would leave office for good. Taoiseach Bertie Ahern has always stoutly defended the deal, despite the steadily escalating cost. Late last year, questioned by Labour leader Pat Rabbitte, he told the Dail: "He believes I should have taken the money from the church but I do not. I do not believe the church should have coughed up another €500 million. "I accept Deputy Rabbitte's view and he should accept mine. The Irish church does not have those resources. I was not prepared to go down that road, nor am I prepared to do so now." Later the Taoiseach said: "The deputy may argue that they should not be paid or that we should take land off the churches, but that is not a road I would go down ... I do not believe for a second that we should have taken any more money from the religious institutions in the state. That is my position." There is one final postscript. In recent years, property sources estimate that religious orders have sold property worth hundreds of millions of euros on the open market. Faced with declining numbers and the rising cost of care for their ageing members, orders have been cashing in on their landholdings, some of which are located in the most expensive areas of the country. Large tracts of land in Dublin especially have been sold off for private development - some of it for the most avowedly exclusive residential schemes. Not all of the lands sold have been owned by the 19 orders which took part in the deal. But many have, and because of the charitable status of many orders, they have been exempt from tax. Shortly after the deal had been concluded, in an interview with The Sunday Business Post, Sister Elizabeth Maxwell of Cori, the religious orders umbrella body, said that the government was "getting very good value" from the deal. "All our legal advice is that the government has done well by getting so much from us," she said. Five years and €1.2 billion later, it doesn't seem like such good value anymore.
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