The Charity Commission has refused to release its correspondence with the charity the Cup Trust in response to a request made under the Freedom of Information Act.
The commission was criticised by the Public Accounts Committee in March for not taking action against the Cup Trust, which turned over £176m in two years but gave only £55,000 to good causes and was accused of being a tax-avoidance mechanism.
The paper said the commission refused to disclose the correspondence and would not say how many times it had raised "tax avoidance" or "regulatory concerns" with the Cup Trust or the law firm Bates Wells & Braithwaite. The law firm advised Mountstar PTC, the charity’s corporate trustee, on its response to the commission’s investigation of the scheme.
The commission said that disclosing information about the Cup Trust would prejudice its ability to carry out its regulatory functions. "Disclosure of correspondence between the commission and charities that it regulates could result in the withdrawal of cooperation on the part of charity trustees, which could hinder the work of the commission," said the commission’s reply.
Margaret Hodge, chair of the PAC, told The Times there was no reason for the commission not to disclose the information.
"Lifting the veil of secrecy has to be the way of ensuring that organisations and individuals use charitable status for proper means and not for tax avoidance," she said. "I cannot think of a solid reason why the commission should refuse to reveal this information, and all this does is raise yet further questions about whether they are fit for purpose."
A commission spokeswoman said the regulator had responded to The Times's FOI request but was not able to supply all the information it asked for. The Times then appealed against that decision and the commission was now carrying out an internal review of its original response, she said.
The review will take 20 days. If The Times is not satisfied with the outcome it can appeal to the Information Commissioner, the commission spokeswoman said.