No cap on donations to much maligned social support body

There is no cap on donations to the independent social support body, nor are there any restrictions as to who can contribute, the Cyprus Mail learned on Tuesday, as the body again got caught in a storm following last week’s release of a video purportedly linking it to contributions to the presidential palace.

The body, or fund, was initially set up in 2014 to offer financial assistance to disadvantaged students. It is chaired ex-officio by whoever happens to be the spouse of the president.

Since 2023, the body has been chaired by Philippa Karsera, the current president’s wife.

In the eight-minute video, the fund gets an oblique mention from the CEO of Cyfield, the largest construction contractor on the island.

After seemingly boasting about his access to President Nikos Christodoulides, Cyfield CEO Giorgos Chrysochos says: “So we gave her [the first lady] €10,000 every year. It’s not much, but we support other initiatives as well. I have to pay, I’d say, €250,000 every year on.”

The remarks were widely interpreted as an admission of a type of pay-to-play arrangement – where corporate donors contribute to the fund, supposedly as part of their corporate social responsibility function, in exchange for access to the president and his inner circle.

Following the uproar over the video, over the weekend Karsera announced her resignation from the body.

State treasurer Andreas Antoniades, who also acts as the treasurer for the social support body, confirmed to us that according to the body’s rules it cannot convene to conduct official business without a chairperson.

This leaves the fund in the lurch until such time as a replacement is appointed.

The body’s chairperson does not need to be the first lady of the day – although she is the first choice. The cabinet nominates the first lady for the position. If she refuses, the cabinet nominates another individual of “high repute and good standing”.

With Karsera now out, the fund’s management committee is waiting on the cabinet to make its move.

Antoniades and another source said there is no limit to how much an individual or corporation may donate to the fund, and there is no restriction over who can donate.

The fund’s management committee stresses that it strictly enforces AML (anti-money laundering) guidelines, and that no cash contributions are accepted – only bank transfers.

What is noticeable is that in 2023 – an election year – donations to the body spiked. In that year, total revenue clocked in at €2.269 million. This represented about a tenfold increase on the previous year.

On the expenses side, in 2022 the fund spent €462,000; in 2023 it spent €547,000; and in 2024 it spent €1.6 million.

The fund’s operation had drawn attention in the past, as it is driven by private donations.

Suspicions over the fund have to do with the lack of transparency. The fund does post on its website the company logos of corporate donors – but does not disclose the amounts.

In a report published last November, the Audit Office said the fund gives the impression of being a charity-for-influence scheme.

“There exists a relationship – or there appears to be a relationship – of influence and/or the expectation of benefit,” the auditor-general said.

The pattern of donations may suggest preferential treatment, it added. Plus, the absence of full transparency over the donations creates doubts over the fund.

What the report flagged most of all was that a number of donors (companies and individuals) had some relationship or transactions with the state.

It cited, for instance, a company that donated a total of €695,750 in 2023 and 2024, while during the same period “it had negotiated and signed with the state a long-term contract of a high value”.

Karsera had twice appeared in parliament debating a bill that would mandate donor disclosure. In opposing the proposed disclosures, she argued that the publicity would in fact discourage prospective donors.

In October 2024, Christodoulides vetoed a law that would disclose the fund’s donors.

Under the law, which never came into force, the names of donors for amounts of €5,000 and over would have been published.

The president refused to sign off on the law passed by parliament, and referred the matter to the Supreme Court. The court sided with the president, finding that disclosure of the donors, along with the amounts, would violate the principle of ‘proportionality’.