Hungarian government in damage control mode over US entry ban

October 19, 2014


Foreign Minister Péter Szijjártó talks to the press on Saturday about the US entry ban on certain Hungarian officials

Oh what a tangled web we weave when first we practise to deceive! – Sir Walter Scott, Scottish poet

It was not the United States embassy that first leaked information about the right of certain Hungarian officials to enter the United States being temporarily suspended, but economic daily Napi Gazdaság.

Since being acquired earlier this year by Százádvég, a think-tank founded and run by individuals close to Fidesz, including former government spokesperson András Giro-Száz, Napi Gazdaság has, on occasion, published false or erroneous information in an obsequious attempt to make the government or governing parties look good.

In June this year, shortly after independent TV station RTL Klub reacted to the new ad tax by broadcasting news critical of certain government officials, the Napi erroneously claimed RTL Hungary had paid out HUF 1.6 billion (USD 7 million) in bonuses to its board and committee members in 2013, when the correct figure was in fact HUF 1.6 million (USD 7000).  On the basis of its own erroneous information, Napi Gazdaság incorrectly inferred that RTL’s 14 top executives had each received bonuses averaging a massive HUF 110 million (USD 490,000) in 2013, or 11 times the average annual salary of its 244 employees.

At least that time the business daily had the decency to publish a front-page apology the next day.

Napi Gazdaság tells another big, fat lie

On Thursday, October 16 the business daily published an article entitled “Amerikai cégek ellen vizsgálódik a NAV” (NAV is auditing American companies), according to which

The tax authority is auditing numerous institutions and companies with American interest Napi Gazdasag learned.  According to our information the American party has reacted by arranging for the directors of the affected authorities not to be permitted to travel to the United States. Our newspaper contacted the American embassy in Budapest (whose answer can be read below) and the Hungarian tax authority also in order to ask which companies are involved. However, the National Tax and Duty office (NAV) referring to tax secrets said it could not give an answer. Our understanding is that a number of companies are affected, and one is the Ökotárs Foundation.

The Hungarian foreign ministry answers in kind

The article contains the following statement from the Ministry of Foreign Affairs issued to the Hungarian news service (MTI) lending credence to the notion that it was necessary for NAV officials to travel to the United States in order to audit US companies and that the purpose of the travel ban was to prevent them from doing so.

It is in the interest of both Hungary and the United States that the authorities be allowed to continue their audits in a basic, transparent, and lawful manner.  Hungarian officials complete their work independent of every kind of pressure.

But this time the US embassy calls their bluff

In response to the allegations contained in the article and the foreign ministry statement, the United States embassy in Budapest issued the following statement on Thursday:

The American embassy has no knowledge of any NAV audit of an American company in Hungary, and no American actions have taken place as a result of such an audit.  Certain Hungarian individuals were found not to be entitled to enter the United States.  At the same time we have credible information that these individuals either participate in corruption or benefit from them.  This decision was made by the American foreign ministry.  The question of whether to conduct a criminal procedure is the decision of the country in question.  American law seeks to protect private life, and for this reason we are not permitted to give out the names of the individuals in question.  Nobody stands above the law.  The United States shares Hungary’s “zero tolerance” position on corruption.   The handling of corruption requires a healthy system of checks and balances and transparency.  The actions of the American government are not specific to Hungary, but part of a growing US effort to combat obstacles like corruption which threaten the fundamentals of good governance, transparency and democratic values.  … Corruption threatens development and prosperity, endangers the integrity of world markets, and the stability of political systems and the safety of the international community.  It obstructs efforts to promote freedom and democracy, blocks economic development and foreign investment, and diverts energy from innovation and competition, as well as from entrepreneurial and technical development strategies.

In a press conference held at the US embassy on Friday, US Chargé d’Affaires M. André Goodfriend reiterated that the US government was not at liberty to disclose the names of the individuals in question, but that the Hungarian government possessed the information necessary to determine their identities.  According to Goodfriend, the right of “less than ten” Hungarian citizens to enter the United States had been temporarily suspended.

The statement triggers a media feeding frenzy

This statement led online news portal to report on Friday that, in addition to top-ranking NAV officials, András Giro-Száz, Százádvég chairman Péter Heim, and personal advisor to Prime Minister Viktor Orbán Árpad Habony were thought to be among those whose right to enter the US had been temporarily suspended.  Századvég subsequently denied that any of its executives, directors or employees were involved, and Habony’s lawyers announced it was not true that their client had been “banned from the United States”.  (However, as points out, the letter from Habony’s lawyers does not rule out the possibility that their client’s right to enter the United States had been temporarily suspended.)

On Friday, ATV online published an interview with an unnamed Hungarian businessman reportedly linked to Fidesz who claimed he had been told by the embassy that his right to enter the US had been temporarily suspended by “presidential proclamation”. His account was at odds with the US embassy’s earlier claim that the State Department had issued the decision.

Hungarian government in full damage control mode

On Friday evening Foreign Minister Péter Szijjártó, who will travel to Washington on Tuesday, called on the government of the United States to “make available to the Hungarian parties credible information forming the basis for the suspicion of corruption”, adding that failing to do so would “raise the suspicion that it merely wants to exercise influence over certain matters”.

At a press conference on Saturday, Szijjártó said that for the time being the government was not launching a separate investigation into the background of the affair, preferring instead to wait for the Americans to provide proof because, in his opinion, “this would be a much easier method of uncovering the truth”.

On Sunday evening Fidesz parliamentary fraction leader Antal Rogán appeared on ATV’s Szabad Szemmel to demand the United States furnish the Hungarian government with proof of corruption, saying the matter would be considered a “provocation” should it fail to do so.

Referring to media reports that the president of NAV and other NAV directors had been prohibited from entering the States, Rogán said a possible explanation was that former Democratic US President Bill Clinton was upset with NAV for suspending Ökotárs’ tax number because Norway is an important supporter of his foundation.  The Fidesz politician then openly accused the former US President of using his Democratic Party connections to influence the White House and the US State Department.

Rogán said he would like for this not to be the explanation, but that the truth will only be revealed if the US supplies the information.  He volunteered that as the chairman of the Parliamentary Economics Committee he frequently spoke to American or other company directors who complained that NAV was auditing their company.  Rogán claims he always told them Hungarian tax authorities conduct audits in an unbiased manner, but if they have any complaints they should turn to the courts.