Church told to hand over control of 23 more primary schools

MrPudding wrote: »

. . . This simply means that if you have any dishonest or illegal intentions when you use equity, say setting up a trust to move your property into so you can avoid paying money you owe, then equity will not be available to you. You will be able to go through the process and set up the trust and even move you property into it, however, if it is challenged and it is found that you, for example, transferred the property so you did not have to pay compensation for the acts of child rape that your employees committed, then it is as if the trust never existed.

So if we take this and apply it to the behaviour of the church in Ireland it seems reasonable that many of the property transfers the various diocese and religious orders made to avoid paying the compensation they promise to pay could be nullified. These properties could then be used to pay off the debt those organisations owe to the state and the taxpayer. The easiest way to do this might be to turn the schools over to the state and they could then be credited for the value.

No illegal seizing of property required. Simply the reversal of a despicable and cynical scheme by a despicable organisation to avoid paying compensation to children that were raped by their employees.

Your problem here is twofold. First, even if you could show that the trusts were set up “to avoid paying compensation to children that were raped”, that would not entitle the state to seize the assets on the dissolution of the trust. The compensation is owned to the victims, not the state. If the state wants the assets in the trusts, it needs to show that the trusts were set up to avoid paying amounts due to the state.

Secondly, you’re a long way from showing, as opposed to merely claiming, that the trusts were set up to avoid paying amounts due to anybody. Holding property in trusts has long been the standard way for Catholic dioceses to hold property, because they are unable to hold it directly. There is nothing sinister or suggestive about the use of trusts in this context. The diocesan trusts which hold most national schools were established in the nineteenth or early twentieth century; good luck showing that that had anything to do with avoiding the consequences of the child abuse crisis. And even if you do find a national school in a trust established more recently, you’re going to need a bit ore than coincidence of timing to show that the purpose of establishing the trust was to defraud creditors.

Seriously, as a mechanism for handling property issues arising out of the transfer of school patronage, this is going nowhere.

Obliq wrote: »

That's a good point iguana. I remember seeing the link on the atheist ireland facebook wall and checking. My area wasn't being looked at at all, but I linked up the relevant pages for the nearest eligible areas and posted them to my wall. Gratified to see that Loughrea is now getting an ET school. The people I contacted had in fact heard about the survey through their school, which happens to be a gaelscoil with a decent Parent's Association. I wonder whether the VERY catholic schools even passed on the survey?????

In almost* every area surveyed, Catholic patronage was, by a considerable length, the most preferred patronage option. So my guess is yes, they did.

* Except Dublin 6 – the dirty pagans!

Peregrinus wrote: »

Your problem here is twofold. First, even if you could show that the trusts were set up “to avoid paying compensation to children that were raped”, that would not entitle the state to seize the assets on the dissolution of the trust. The compensation is owned to the victims, not the state. If the state wants the assets in the trusts, it needs to show that the trusts were set up to avoid paying amounts due to the state.

The thing is, they owe the money to the state. There was a deal set up between the state and the various church organisations to share the cost of compensating the victims. The deal itself is a travesty, but the church organisations even failed to pay the pitiful amount owed under the agreement. The state paid all the compensation due, including that which the church organisations had agreed to pay, but has not received the agreed amount from the church organisations.

Besides, the party challenging the trusts would not have to show they were formed to avoid paying them money, they would merely have to show they were formed to avoid paying someone. That said, the party challenging the trusts would typically be the person trying to recover money, but I can see no reason why the state could not challenge sham trusts as a matter of public policy.

Peregrinus wrote: »

Secondly, you’re a long way from showing, as opposed to merely claiming, that the trusts were set up to avoid paying amounts due to anybody. Holding property in trusts has long been the standard way for Catholic dioceses to hold property, because they are unable to hold it directly. There is nothing sinister or suggestive about the use of trusts in this context. The diocesan trusts which hold most national schools were established in the nineteenth or early twentieth century; good luck showing that that had anything to do with avoiding the consequences of the child abuse crisis. And even if you do find a national school in a trust established more recently, you’re going to need a bit ore than coincidence of timing to show that the purpose of establishing the trust was to defraud creditors.

There was a massive move to shift property into trusts when the abuse scandals started to break. I don't have time to dig them out now, but there have been a few articles about this behaviour in the US as well as other countries.

Whilst trust may have been used as a mechanism in some cases it does seem odd that organisations that seemed happy to hold property in their own name for decades suddenly decided, when faced with large compensation bills, to move them into trusts and be able to plead poverty when handed a bill.

Peregrinus wrote: »

Seriously, as a mechanism for handling property issues arising out of the transfer of school patronage, this is going nowhere.

As a method for forcing these despicable organisations to pay what they owe it could, if the will was there, be an option.

MrP

MrPudding wrote: »

The thing is, they owe the money to the state. There was a deal set up between the state and the various church organisations to share the cost of compensating the victims. The deal itself is a travesty, but the church organisations even failed to pay the pitiful amount owed under the agreement. The state paid all the compensation due, including that which the church organisations had agreed to pay, but has not received the agreed amount from the church organisations.

And here’s your first hurdle. The trusts established by the religious orders concerned are not, for the most part, the trusts which own these schools. These school are mostly – and quite probably entirely – owned by diocesan trusts. If you’re chasing assets which you claim were disposed of by religious orders in order to defraud creditors, you have to find asserts which once belonged to religious orders. Very few national schools ever did. (Secondary schools, now . . .)

MrPudding wrote: »

Besides, the party challenging the trusts would not have to show they were formed to avoid paying them money, they would merely have to show they were formed to avoid paying someone. That said, the party challenging the trusts would typically be the person trying to recover money, but I can see no reason why the state could not challenge sham trusts as a matter of public policy.

Yes, the state could do this. As the trusts concerned are charitable trusts, the Attorney-General can intervene to ask the courts to ensure that they are property charitable, and are being properly administered. That would certainly enable the A-G to intervene to ask the court to declare that, in relation to a particular property transferred to the trust, or to all properties, the charitable purpose was a sham and the real purpose was to defraud creditors.

MrPudding wrote: »

There was a massive move to shift property into trusts when the abuse scandals started to break. I don't have time to dig them out now, but there have been a few articles about this behaviour in the US as well as other countries.

And here’s your second hurdle. It’s not enough to show that a property was transferred to trusts when the abuse scandal broke. You have to show that it was transferred to trusts because the abuse scandal broke, and in order to put it beyond the reach of people with an entitlement to compensation.

MrPudding wrote: »

Whilst trust may have been used as a mechanism in some cases it does seem odd that organisations that seemed happy to hold property in their own name for decades suddenly decided, when faced with large compensation bills, to move them into trusts and be able to plead poverty when handed a bill.

The facts are otherwise, though. The religious orders never held property in their own name; for the reasons already pointed out, they can’t. They have always used trusts for this purpose. (in Ireland, at any rate. I can’t speak for the US.) The use of trusts, in itself, is not at all suspicious; it’s absolutely standard.

What has happened in recent decades is not a transfer to trusts, but a transfer between trusts. And this reorganisation of trusts has happened on a fairly large scale.

It started, though, well before the abuse scandal broke. To my knowledge, it’s been going on since at least the 1980s. And it has primarily been a response to changes in the orders themselves – declining recruitment meaning, first, that seminaries and houses of formation were no longer required for their original purpose; then that the orders were no longer staffing their own schools, hospitals etc to the same extent as previously or, in time, no longer staffing them at all; then, that the orders were getting out of managing schools; then, that the orders needed to liquidate assets to generate funds to support a growing pool of aged members who could no longer be supported by a shrinking pool of members in employment, etc, etc. All this has necessitated a major restructure of what the orders were doing, how they were using their assets, and even whether they wished to retain their assets. And, for obvious reasons, this has taken the best part of a generation to carry through.

Typically, as part of this process, schools – secondary schools, mostly – get transferred from trusts for the general purposes of the religious order, with clerical trustees who are members of the religious order, to new trusts for the purpose of providing Catholic education in the spirit/tradition of the religious order, with lay trustees who are mostly past pupils of the schools. When the orders no longer staff, manage or operate schools, they have no particular interest in continuing to own them, so they hand them over to a successor body whose core function is running Catholic schools.

Now, I can’t deny that at some point during this process some orders may have come to see the putting of assets beyond the reach of abuse claimants as a useful objective to pursue in their restructuring strategies, and may have acccelerated transfers, or transferred properties which would not otherwise have been transferred. That may well have happened. But “I can’t deny” is a long way from “I can prove”. In order to claim this school from this trust, the state will need to show that it was put into the trust for the purpose of evading creditors, and as opposed to for any proper purpose. And that’s not going to be easy to show.

So, in summary, to make a go at this, the state would need (a) to find that one of the national schools earmarked for transfer formerly belonged to a trust for a religious order and was transferred to an educational trust not controlled by the order, and (b) to produce evidence that the purpose of this transfer was to defraud creditors who would have had access to the assets of the trust for the religious order. It’s a big ask.

Plus, there’s another way to look at this; if you could do all this, would it be a good outcome for the state?

I’m not sure that it would. Look at it this way. Suppose we identify a school that is to be transferred and we find that, yes, by happy chance it used to be operated by one of the religious orders which owes us money, and a few years back was transferred from their in-house trust to a trust for catholic education ostensibly unconnected with the order. And suppose we can even find evidence – a documentary smoking gun in some file or other – that this was done with a view to insulating it from abuse claims.

As matters stand, the religious order no longer has any interest in the property. They don’t own it, they don’t control it, they don’t run the school that operates there, none of their members are on staff there. Do they suffer in any way if the state now takes ownership of the school? I don’t see that they do. They’ve already given away the asset; I can’t see that they can lose it a second time.

Does the state benefit? Not that I can see. They already pay for the school that runs there; they’re going to have to keep doing that. What they would like is cash to fill the hole in the state’s bank accounts left when the state paid compensation to abuse victims, but the school building is not cash, and doesn’t generate any cash. The only way to turn the school building into cash is to sell it, but if they do that they’ll have to buy or build another building in which to educate the pupils concerned, and to employ the staff. I don’t see that the state will be any better off by doing this.

In fact, they’re worse off, since their claim against the religious order is now reduced by the value of the asset they have seized – and the religious order is better off by the same amount. How is this a good outcome from the public point of view?

If the state has a claim against the religious order, they want that claim satisfied in cash, or in something they can turn into cash. Title to a building in which a publicly-funded school is currently running, it seems to me, is not that thing; the state cannot sell that building or, if they do sell it, they must replace it. So even if the state has the evidence needed to overturn the transfer of the school building to the educational trust, they are probably better off not to attempt that, but instead to chase some asset of the religious order which can actually be turned into real cash. That’s worth more, and it’s easier to chase, since the problem of overturning the transfer to the educational trust will not present itself.

MrPudding wrote: »

As a method for forcing these despicable organisations to pay what they owe it could, if the will was there, be an option.

For the reasons given, not a very realistic option, I think.

recedite wrote: »

On the other hand, if the State purchases this theoretical school from the sham trust fund, it has to hand over money, so there is a real financial cost to the taxpayer straight away.
Secondly, the trust fund puts this new money into improving one of its other schools, giving it superior facilities to the school handed over. Then when demand for places in the "good" school increases, they can insist that parents must attend mass if they want to get their kids into the good catholic school.

At the same time, the State is paying the costs of both schools, as before. But now one of the schools has a big wad of cash to play around with, which is unfair.

Good point.

But it raises a larger issue. Since the reality is that most or all of the primary schools that get transferred will not be schools that came from one of the religious orders that owes the state money as a result of the Michael Woods deal, does that imply that in most or all cases the state will be paying hard cash to take the school out of Catholic patronage and make it available to another patron? And that hard cash will then be available to improve the remaining Catholic schools, to the comparative disadvantage of the (now) ET-patronised school?

That doesn’t look like a terribly good idea, for a number of reasons. First of all, the state doesn’t have a huge amount of hard cash to spread around. Secondly, it it did, in terms of investing in education there are more efficient ways to spend it. Thirdly, why would we want an effective subsidy to the residual Catholic schools? Fourthly, why should taxpayers money be spent buying school sites for the benefit of ET? Other patrons don’t get that treatment, do they?

I suspect the way through all this is to note that ownership of the school property and patronage of the school don’t have to be linked. There’s no fundamental reason why the Catholic church shouldn’t continue to own the sites of schools patronised by ET. If they want to negotiate for the sale or transfer of the site to the state, or to ET, or to anyone else, that can be dealt with separately.

The truth is that ownership of the school site is not a valuable asset; schools don’t pay rent. Plus, of course, the school site was typically developed with the benefit of substantial capital grants from the Department, and it is highly likely to be a term of the grant scheme that, if you sell the site (or cease to use it as a school), you have to repay the grants.

A way through this may be some kind of agreement whereby school sites are transferred on terms that no payment is made to the diocesan trust, and the trust’s contingent obligation to repay the grants is written off. The diocesan trust loses an asset of negligible value, the state lays out no money, the church’s involvement with the school is completely at an end, and nobody needs to go to the High Court to get trusts set aside as fraudulent. Viola!

Peregrinus wrote: »

In almost* every area surveyed, Catholic patronage was, by a considerable length, the most preferred patronage option. So my guess is yes, they did.

* Except Dublin 6 – the dirty pagans!

That doesn't mean they are pagan and us pagan wash ffs!

Well, possibly it has to do with the wording of the question. If you asked "ought there to be a wider choice?" you might get more support that if you just ask "would you like a wider choice?". People might understand the latter question as asking them whether the current range of options was enough to meet their aspirations.

But, still.

expectationlost wrote: »

fr drumm making points about the size of viable schools http://www.irishtimes.com/news/education/demand-for-new-school-patronage-lower-than-predicted-1.1359825





where ya get that 80-100 number perejesus?

The Department's report on the Consultation says (top of page 9) that "a four teacher school was selected as the approximate level of viable demand" to justify transfer of a school, and newspaper reports in the Indo and the I. Times both suggested that this would imply 80-100 pupils, reflecting, presumably, a pupil-teacher ration of between 20:1 and 25:1.

The figure of 51 pupils refers to the criterion used to establish a new school; they must expect an enrolment of 51 after three years. But since the primary cycle is seven years long, and since new schools tend not to attract significant transfers from existing schools, an enrolment of 51 after three years implies a school of more than 100 when it is "mature", i.e, when the first year's intake has completed the primary cycle and moves on to second level. So the "51 students after three years" criterion of for a new school looks roughly comparable to a "80-100 pupils" for an established school, or perhaps even a bit tougher.