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