THE inadequacy of the indemnity deal negotiated between
the Government and the religious orders in 2002 is underscored by the
fact these congregations made €468m by selling property after signing
their agreement with the Department of Education.
A lack of foresight on the part of Bertie Ahern’s
cabinet and perfect timing in terms of market conditions created a
windfall that appeared to answer all of the orders’ prayers. In every respect 2002 was the watershed year when it came to the financial fortunes of the 18 orders at the centre of abuse allegations dating back 70 years.
In the three years preceding the blanket indemnity, the orders had amassed approximately €150m by selling land and buildings.
Then the completion of the controversial indemnity package coincided with an extraordinary acceleration in house prices.
The changes finance minister Charlie McCreevy made in his budget for 2002 incentivised the development of zoned areas and put a premium on available land banks.
The religious orders, with dwindling numbers living in large urban campuses, were in a better place than most to capitalise on the appetite for construction. They were looking to sell properties when there was more money than ever available to buy them.
And for seven years they evaded a growing bill linked to the compensation claims of the children who were abused in their care. This was because of a deal the government reached in its final hours in office.
On May 11, 1999 the then taoiseach, Bertie Ahern, made an apology on behalf of the state to the victims of abuse in residential institutions. He also revealed his government’s decision to set up a commission to inquire into what went on. By saying "sorry", he accepted the state was complicit in the treatment of those children and had a duty to compensate them.
In the first half of 2000 the new education minister, Michael Woods, published and guided through the legislation allowing for the establishment of the Commission to Inquire into Child Abuse. However, solicitors for the victims told the department they could not co-operate with an investigation unless an offer of compensation was on the table.
Over the course of nine meetings at the end of 2000 and the beginning of 2001 the department sat down with colleagues from the Department of Finance, staff of the Attorney General’s office, and representatives of the Conference of Religious in Ireland. On February 27, 2001, the compensation scheme was approved by Government.
The commission had still to begin its work or assess the volume of complaints involved. This did not stop the department making an inadequate stab at the eventual cost.
By the end of 2001 the Government had asked the orders to cough up 50% of the anticipated compensation package, this would have seen the orders signing over €127m in cash and property.
CORI walked away from the talks because it felt this was unfair and the orders demanded credit for properties signed over to the state during the 1990s.
A compensation advisory committee was working in the background and brought its assessment to Government in January 2002. This was accepted by CORI on the basis of a capped figure of €128m.
In the 24-month period between the publication of the law to establish the commission and the agreement on the €128m figure, the orders made a combined €113m from property transactions.
It took another five months before the final indemnity deal was signed off by Government. This absolved the orders of any compensation bill above a €128m ceiling.
That year, 2002, and the year after it, were not particularly busy times in terms of land sales by the religious orders. Both annual totals fell below €40m. They were to be dwarfed by an acceleration of disposals in the period that followed.
As the controversy surrounding the agreement Dr Woods had negotiated escalated, the property market nationally went into a frenzy.
In 2004 the orders made more money in sales than their combined contribution to the original redress scheme. This was aided by the enormous sum of €105m paid for the Oblates of Mary Immaculate’s campus at Belcamp. This site has never been developed and decayed in the years since the order moved out.
If 2004 was lucrative, it paled in comparison to the activity in 2006.
That year, the Christian Brothers off-loaded four properties, including a valuable patch of land in Youghal, for €7m. The Presentation Sisters made €30m for its convent site in Terenure. The Sisters of Mercy received €32m for a 16-acre tract in Killarney. And the Sisters of Our Lady of Charity sold the site adjoining its Magdalene Laundry in High Park Dublin for €55m.
While the property figures rose steadily, the cost of redress spiralled beyond anything imagined in the early part of the last decade.
An original estimate of €250m in compensation rose to €1.3bn as the expected 2,000 victims became 14,000.
By the time the public outcry around the Ryan Report forced the Government to reopen negotiations, the orders had made five times more money from land sales than they had originally agreed to offer towards compensating the victims.
This was to change when the second watershed moment occurred in 2009 and the public, and the Government, said €128m was not enough.
The orders’ improved offer of €476m is remarkably similar to the €468m they made selling land, buildings, warehouses, convents and houses after they were first granted indemnity. But all this is a long way short of the €680m contribution the Government is seeking or the €1.3bn the state will have to pay to help make amends for its sorry past.
Hard cuts
EDUCATION Minister Ruairi Quinn has warned he will have to make unpalatable cuts to his budget if religious orders are not willing to contribute more to the abuse compensation bill.
He said he believed the €1.3 billion needed to compensate the victims of abuse in residential institutions should be split evenly between the state and the 18 orders named in the Ryan Report.
"It is about recouping, for the distressed Irish taxpayer, a vast amount of money the alternative of which is we have to further reduce expenditure and introduce savings in areas that we would otherwise not want to do," he said.
Mr Quinn said he would restart negotiations with the orders but he was not sure whether they would sign over another €200m to meet the target.
They have already pledged to provide €476m in property and cash to the redress scheme.
He said the arrangement negotiated by the previous government was an "unfair" one and needed to be revisited.
"To date €1,300m has been paid out by the tax payer and a fraction of that has been received by the religious orders.
"Negotiations were effectively suspended, it seems to me, for the last year and a half… but it is my intention to resume negotiations as soon as possible," he said.
However, Mr Quinn said he was not confident of achieving the 50:50 contribution target because he did not know what the situation was within the various orders.