The Charity Commission should have used its regulatory powers to remove the corporate trustee from the Cup Trust and replace it with trustees who live in England or Wales, according to a leading charity lawyer.
Moira Protani, head of the charities department at Wilsons, has said in an online article that the Commission could have taken a tougher line against the Cup Trust when it investigated it between 2010 and 2012, if it had wanted.
Even though it was powerless to remove the Trust from the Register of Charities, it was still able, if it chose, to suspend or remove trustees and appoint new ones.
“Perhaps the Commission should have taken a more robust stance than it did,” Protani said. “After all, a part of the scheme in which the Cup Trust was involved entailed disposing of assets for less than their market value to wealthy donors. Most people would consider that to be reprehensible in itself especially as the Cup Trust would, if it was to benefit from gift aid relief, be reliant upon the wealthy donors selling the bonds and donating the proceeds back to the charity.”
Accordingly, she said, the Cup Trust was taking a risk in selling assets below market value, which must have been enough of a breach of the duties of the trustee to allow the regulator to remove it.
Fund Commission out of rejected MP expenses
However, Protani also accepted that the Commission’s financial constraints meant it couldn’t regulate schemes like the Cup Trust effectively. She suggested some “creative thinking” to increase its budget:
“For example, if an MP’s expense claim is not approved by the independent body set up for that purpose, how about reallocating that proportion of the funds set aside for MPs’ expenses to the Charity Commission?”
PAC reaction 'quite remarkable'
And she was incredulous about the Public Accounts Committee’s reaction to the Commission’s evidence before it on the Cup Trust issue last month.
“Given the remit of the Public Accounts Committee, its failure to identify the correlation between cuts in the Charity Commission’s funding and its reduced resources with the reduction in the formal inquiries which has resulted, is quite remarkable.”
The Charity Commission is currently in the midst of a decision review in relation to a recent FOI request by The Times, and cannot comment on any aspects of its investigation into the Cup Trust.
