GREEK BUYUKADA ORPHANAGE SEIZED; BALIKLI HOSPITAL

C O N F I D E N T I A L SECTION 01 OF 02 ISTANBUL 001753 SIPDIS E.O. 12958: DECL: 11/23/2014 TAGS: PHUM PGOV TU SUBJECT: GREEK BUYUKADA ORPHANAGE SEIZED; BALIKLI HOSPITAL THREATENED REF: A. ISTANBUL 843 ¶B. ISTANBUL 1279 Classified By: Acting Consul General Stuart Smith for Reasons 1.5 (b&d) ¶1. (c) Summary: Against the expectations of the Ecumenical Patriarchate, the Turkish Supreme Court on October 10 upheld a lower court decision revoking the Patriarch's deed of ownership for the long-vacated Greek Orthodox orphanage at Prinkipos (Buyukada) and awarded ownership to an already-confiscated Greek Orthodox foundation. In losing this case, the Patriarchate not only exhausted its last legal recourse in Turkey to regain physical custody of one of its most historically-significant and potentially valuable properties, but also lost what it saw as an invaluable lever to force the Turkish state to grant the Patriarchate legal status. Meanwhile, in another unpleasant surprise, the Greek Orthodox Balikli Hospital was recently notified by its district tax inspector that it owes five years of back taxes (despite the fact that they have tax-exempt status granted by Istanbul authorities). The community is exploring legal options, but if the decision is enforced, it may be forced to close the hospital. End Summary. ¶2. (c) The Greek Orthodox orphanage at Prinkipos is a large, beautiful, wooden structure on Buyukada, an island in the Marmara Sea near Istanbul. The building is significant to the Greek Orthodox community for both its historical and monetary value. Vacated in the early 1960s, the building has fallen into a serious state of disrepair. In 1997, the General Directorate of Foundations (GDF) initiated a legal process to have the 1902 deed (which is in the name of the Ecumenical Patriarch) transferred to the Greek Orthodox foundation administering the property (Note: Because the foundation had already been confiscated by the GDF, such a ruling would lead to the effective seizure of the orphanage). Although it predates the Turkish Republic, the deed is perhaps the only formal document in which the Patriarchate has any legal status in the eyes of the Turkish state. As such, the Patriarchate was confident that it had a strong legal case to maintain its claim to the property, and in so doing to force the Turkish state to grant the Patriarchate some measure of long-sought legal recognition. The Supreme Court decision on October 10 upholding a lower court's decision to revoke the deed came as a complete surprise. The Patriarchate intends to pursue the case at the European Court of Human Rights. ¶3. (c) In another unexpected development, Metropolitan Meliton, Chief Secretary of the Holy Synod of the Ecumenical Patriarchate, told poloff on November 21 that the non-profit Greek Orthodox Balikli Hospital has been notified that, despite its tax-exempt status, it may be forced to pay back taxes owed since 1999. Local tax authorities have appointed a team to audit the hospital. The 450-bed hospital operates with about 200 staff, generates USD 2.6 million in annual revenue, is open to the general public, and accepts about 200 charitable cases each year. As such, the hospital is one of the few remaining vibrant institutions in an otherwise aging and vanishing community. If it turns out that substantial sums are owed, Meliton predicted that the community would be forced to close the hospital. Asked whether this might simply be a normal, bureaucratic process, Meliton was skeptical and particularly worried about the decision to apply laws that cover "private," as opposed to non-profit, hospitals. Working together with the hospital's management and the Greek Orthodox community's lawyers, the Ecumenical Patriarchate is planning a legal challenge to the decision and will also send letters to the Prime Minister, Health Minister, and others in the Turkish government. ¶4. (c) Meliton indicated that the Greek community is not alone in facing this tax challenge: other minority religious communities have also been approached by the tax authorities in the past. The small Bulgarian Orthodox community here, for instance, was forced to close their hospital in 1982 after receiving a similar notification from the tax authorities. The Jewish community, however, told us that they voluntarily established a commercial unit to manage their hospital's taxable accounts. Operating at a net loss, the Jewish hospital pays only some value-added taxes on purchases. Similarly, the director of the non-profit American Hospital told poloff that his institution also pays only VAT and is subject to annual or biannual surprise audits. ¶5. (c) Comment: The decision on the orphanage and the notification to the hospital at a time when Turkey should be on its best behavior before the December 17 European Council decision have left the Patriarchate frustrated and discouraged. They feel that despite promises from the Turkish government there has been little real progress on their core concerns (legal status, reopening Halki, property restitution). Additionally, they fear that the government is powerless or unwilling to stop elements of the Turkish state and bureaucracy hostile to the Greek Orthodox community from proceeding in a systematic campaign against them. ¶6. (c) Comment, cont.: While the decision on the orphanage represents a serious setback for the community, we need to be aware that the Patriarchate's concern was not merely to recover the property, but also to use it to secure legal recognition of its status. Additionally, it may be premature to conclude that the Turkish state is trying to force the community to close the Balikli hospital. Judging by the experiences of other non-profit hospitals in Istanbul, these latest measures may simply be an effort to apply standard laws to the long-ignored Greek Orthodox hospital. SMITH