US embassy cable - 04ISTANBUL1753

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, Istanbul 
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