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2020.01.10 09:00

Blessed with NGO status, Catholic Church runs business and politics – LRT Investigation

Jurgita Čeponytė, LRT Investigation Team, LRT.lt2020.01.10 09:00

The Catholic Church in Lithuania runs numerous businesses and is the biggest property owner in the country. No laws it cares about are passed without the Church’s blessing, and it has now been given the status of an NGO, giving it access to EU and national funding, LRT Investigation Team reports.

The Lithuanian Bishops Conference, a powerful lobby group, was closely involved in drafting a law regulating the country's non-governmental organisations (NGOs), LRT has found.

Under pressure from the lobby, the new law allows religious organisations to self-identify as NGOs and compete for public funding. Unlike secular NGOs, however, they are not obliged to make their financial accounts public.

The bill, which had been three years in the making, was drafted in late 2018. One of its purposes was to make the non-governmental sector more transparent and included a clear definition of what bodies could be considered NGOs. One of the criteria was making annual public financial statements.

Meanwhile religious organisations, operating under a separate set of rules, are not required to disclose their finances. The country's non-governmental sector sought to draw a clear distinction between secular organisations and the church.

In early 2019, the bill was sent to a task group made up of Social Security and Labour Ministry representatives and the Bishops Conference. The group decided that any organisation can decide itself whether it's an NGO.

Under these rules, about 700 parishes in the country can declare themselves NGOs.

Gaja Šavelė, the head of the National NGO Coalition, says that church organisations are interested in being treated as NGOs, while not being subject to the same level of accountability.

“The main goal is to have access to funding from the government, municipalities and the European Union. There are usually restrictions: that only NGOs can apply for these programmes,” Šavelė says.

If church organisations can compete for public service contracts and funding, it seriously distorts the playing field, says Judita Akromienė, the head of the National Network of Education NGOs.

“Some [religious] organisations do not pay income tax, others do not need to rent premises. It is likely that they will have greater chances of winning the contracts,” she says.

In a statement to LRT, the Lithuanian Bishops Conference insists that church organisations, like all the others, declare income from commercial activities to tax authorities and file reports about publicly-funded projects to the funding agencies. “We believe that it is enough,” Ieva Urbonaitė-Vainienė, a spokeswoman, said in the written statement.

Network of church businesses

The Lithuanian Catholic Church's activities are funded from parishioners' donations and the annual grant from the government, about 1.2 million euros. In addition to that, church organisations get funding for specific projects and manage large possessions of real estate.

A recent study by the business daily Verslo Žinios has shown that the Catholic Church is the biggest property owner in the country. In addition to houses of prayer and seminaries, the possessions include big plots of land and real estate in central parts of many of Lithuania's cities and towns.

These properties are used for business activities: rented out, run as hotels or even wind farms.

The Diocese of Kaišiadorys, in central Lithuania, built the first wind power plant in the country through its company UAB Dalis Gero. Aidas Bernatonis, the company's chief, says the idea was suggested by a diocese in Germany which also advised and helped secure a loan.

Later, UAB Dalis Gero was involved in drafting legislation and tax rules for the country's nascent wind energy industry and was one of the founders of the Wind Power Association.

According to Bernatonis, the Kaišiadorys Diocese needs the business to support its activities and, unlike urban dioceses, it cannot make much money from letting its properties.

But the diocese also owns a hotel housed in a former seminary in the spa town of Birštonas. Another seminary-turned-hotel is operated by the Archdiocese of Kaunas, in the very centre of the city. Kaunas priests also ran a credit union at one point.

The Archdiocese of Vilnius runs three businesses: a hotel in the centre of the city (Domus Maria, by the Gates of Dawn), one of the biggest funeral service providers in the country and a construction company specialising in heritage restoration.

However, the archdiocese's biggest stream of revenue comes from renting out its properties. This alone generated nearly 3 million euros last year.

Political influence

The Church has a long tradition and infrastructure for lobbying politicians and is particularly effective before elections, said the head of the National Network of Education NGOs, Akromienė.

During debates on an artificial insemination law, politicians told the media they received phone calls from the Bishops Conference, urging them to vote the way the Church wanted.

Keeping its financial matters private is also among the key interests of the Church.

“Now or 15 years ago, the Bishops Conference has always insisted that the Church will never disclose its finances,” a source from one of the previous governments tells LRT Investigation Team.

“If you see that an issue is of interest to the Church, you can be certain that they will have their way,” says a lawyer representing an official lobbying firm who preferred to stay anonymous.

“You can forget about convincing politicians otherwise.”