Matheson, the corporate law firm that works closely with the so-called "vulture funds" that buy distressed property loans, has admitted its use of registered charities to help the funds avoid Irish tax is creating "confusion". It pledged last night to review the practice after receiving fierce criticism.
The Matheson Foundation, a charity linked to the firm, is the registered owner of scores of foreign-controlled funds that are clients of the law firm, as part of complicated structures to avoid tax and house risky assets off balance sheet.
Some clients of Matheson, such as Mars Capital, have even bought distressed home loans through entities legally owned by the foundation. Mars is owned by the trusts Eurydice, Medb and Badb, which operate as Matheson Foundation.
TDs including Independent Stephen Donnelly have heavily criticised Matheson in the Dáil for using registered charities in this way, a practice first highlighted by The Irish Times. It has also caused concern among State officials and sparked an ongoing review by the charities regulator.
After several other charities moved in recent days to distance themselves from the Matheson Foundation over disputed claims of financial support, the firm said it would review how it used the foundation to service vulture funds.
“The foundation is not a vulture fund. However, we recognise that confusion now exists with respect to the status and activities of the foundation,” said Matheson. “This is in no one’s interest, least of all those worthy causes we support. We are conducting a review of the foundation to address this confusion.”
It promised to continue supporting charitable causes.
Meanwhile, the children’s charity Barnardos and Temple Street Children’s Hospital denied having received any donations from the Matheson Foundation, contradicting a claim on the foundation’s website.
Barnardos chief executive Fergus Finlay told RTÉ Radio's Liveline yesterday that this was "not true" and tried to disassociate Barnardos from any Matheson-linked entities that might be involved in the repossession of family homes.
"We've never had anything from the Matheson Foundation," he told The Irish Times. He said that in October 2006, he made a presentation to staff of the law firm, who pledged to support Barnardos through staff fundraising events.
"I remember them mentioning a karaoke night, and we got a cheque from the firm thereafter, which we were grateful for. But any suggestion that we are supported by the Matheson Foundation is completely wrong," Mr Finlay said.
Temple Street Children’s Hospital is also currently listed on the website of the Matheson Foundation as a “partner”. The hospital’s charity arm said it had received no donations from the Matheson Foundation. “Having reviewed our records, we have no note on file of having received any donations from Matheson Foundation,” it said.
Temple Street contacted the law firm to ask why it was listed on its website as a partner. It said it had not yet received a response. Matheson, however, last night insisted that it had “through our foundation” contributed to all charities named on the foundation website, contradicting the assertions by Mr Finlay and Temple Street.
