Stephen Donnelly tells Dáil debt buyer paid €250 corporation tax on €300m profit, reports the Irish Times.
Tánaiste Frances Fitzgerald will ask the charities regulator to examine the issue of charitable trusts, a number of which a TD claimed, had been set up specifically to avoid paying tax in Ireland.
Ms Fitzgerald was responding to Social Democrats TD Stephen Donnelly who highlighted the case of companies using charities to allow the firms avoid paying tax.
Mr Donnelly for the second time in a week in the Dáil had raised the case of Oaktree Capital, which deals in distressed mortgages and uses another firm to invest those funds.
He said Oaktree had paid €80 million for distressed mortgages in Ireland and expected to make a profit of between €300 million and €320 million.
Last year it had income of €14 million but paid corporation tax of just €250.
He said profits “should rightly be taxed in this country with the benefit going to the exchequer”.
He said the firm had three shares, each in the ownership of a charitable trust. “All three are controlled by one of Ireland’s top law firms, Matheson, ” he said.
He said charitable status should not be available to hedge funds, debt collectors, “to companies operating in the shadow banking sector in Ireland with the specific aim of avoiding paying taxes in this country”.
The Wicklow TD said it deprived the State of very valuable taxes “that it could be using to provide the public services that the real charities have stepped in to provide”.
Ms Fitzgerald said she would bring the issues to the charities regulator, adding that Mr Donnelly had raised relevant points about charitable status.
Both were speaking in a debate on a Social Democrats private member’s motion calling for the establishment of an anti-corruption agency, and for a critical review of the HSE’s 2014 revised framework for all organisations it funds.
The debate follows the controversies involving financial irregularities at the suicide charity Console and pay and pensions top-ups to senior executives at the St John of God organisation.
Introducing the debate, Social Democrats TD Catherine Murphy said “we tend to deal with the scandal rather than prevent its occurrence in the first place.”
She said there was only a very small number of dysfunctional charities “but they bring the whole sector into disrepute”.
Ms Murphy said 50 per cent of the sector’s income came from statutory grants.
“One has to question the effectiveness of a lot of the funding and one has to question whether it would be better utilised in a more streamlined sector where it could be more accurately targeted.”
She pointed out that there were more than 200 suicide charities and as a result funding was fragmented and disjointed. “An amalgamation or an umbrella of those charities would be very welcome,” she believed and it was the same with housing and animal-welfare charities.
The Tánaiste said “the public must have confidence that the money they donate to charity will be managed and used correctly at all times. Anything less is a betrayal of the goodwill of thousands of people around the country and of the taxpayer.”
She said one of the key roles of the charities regulator was to safeguard the future of the charity sector and there had been significant progress.
Ms Fitzgerald said the regulator was engaged with more than 12,500 charitable organisations.
“It has received approximately 300 concerns raised against 132 entities, the majority of which were charities. These concerns ranged from issues to do with an organisation’s purpose to the quality of services provided.” The Minister said the number represented about 1 per cent of all charities.
Referring to the Social Democrats’ call for the establishment of an anti-corruption agency, Ms Fitzgerald acknowledged they were “motivated by a concern to enhance the way in which a broad range of wrongdoing is addressed”.
But she said it was not clear how the amalgamation of the functions of a wide range of agencies with widely varying functions would, of itself, enhance the capacity of the State to fight corruption.
Fianna Fáil justice spokesman Jim O’Callaghan said serious allegations of misappropriation of funds were matters for An Garda Síochána.
“Any misappropriation from funds of charities is theft and should be treated in same way as any other theft,” he insisted.
Mr O’Callaghan added that had the charities regulator been fully implemented when it was passed a number of years ago, inspectors would have been in place and the dysfunction that occurred might have been prevented.