Hungary has legalized corruption, says TI legal director Miklós Ligeti

January 24, 2017

Fourth in a series of articles about civil society in Hungary.

“The government would have people believe that George Soros wakes us up every morning and tells us to come into the office, and that our work is treasonous. Ultimately, one simply needs to come to the realization that NGOs will always be weaker than the state. It’s like David and Goliath. One has to redefine success and be steadfast because you face a lot of failures and pitfalls in this line of work.”

Miklós Ligeti has been the legal director for Transparency International Hungary for almost five years. Before stepping into the anti-corruption and pro-transparency NGO, he spent a decade in the government, first as a prosecutor and then transitioning to being in charge of quantifying crime data and preparing criminal legislation, as well as legislation overseeing policing and the clandestine services.

Ligeti, a frequent guest on prime-time television talk shows, is known for his subtle sense of humor. But when the Budapest Beacon asks him for a humorous explanation for why TI Hungary does what it does, he demurs.

“I have plenty of perfect metaphors, jokes and stories to describe this situation in Hungarian but these don’t work in English. I’ve tried it many times and it never works,” he says.

Ligeti says there is “definitely a tendency, or desire, on behalf of the government not only to keep people away from what it perceives not to be the business of citizens, but also to give a strong legal backing to practices and business transactions which we judge to be corrupt.”

The veneer of legality

The “strong legal backing” to which he refers is the manner in which corruption has been legalized in Hungary.

“Transparency International Hungary has publicly said that not only is corruption part of the system in Hungary, corruption itself has been codified into law. What we mean by this is that there are laws which themselves are corrupt,” he says. “Instead of being pursued by the government, corruption is being generated by the government.”

According to Ligeti, there are a number of laws that really showcase the extent to which cronyism and favoritism in national politics and economics have been legalized. By way of illustration, he points at some controversial laws adopted in recent years such as the creation of a state monopoly over tobacco distribution and retailing, the nationalization and immediate re-privatization of the nation’s largest savings cooperative in conscious violation of the provisions of numerous laws, the sale of state arable land, and a wide range of public procurement regulations.

“These all clearly serve the interests of key influential persons, business groups and interest groups, commonly referred to as oligarchs and the beneficiaries of clientelism,” Ligeti says.

Typically, when someone thinks of corruption, they might think of a businessman paying kickbacks to a politician, or someone getting preferential treatment from an official in exchange for money. But corruption goes beyond that, says the legal expert.

Imagine a scenario in which the state itself is the one engaging in the corrupt use of public funds and influence. To do this, and to prevent itself from being subject to the scrutiny of a justice system, the state must essentially condone corrupt practices through dubious legislation. And this pretty much sums up how official corruption works in Hungary.

Often times, simply legalizing corrupt practices isn’t enough. The law itself does not directly state that its purpose is to legalize that which was previously illegal. So, in an effort to avoid public scrutiny and debate, it obfuscates the aims of the law by limiting access to information which would quantifiably demonstrate the corrupt practice to the public.

Corruption by design

“In many cases, these hurdles are not only intentional, they are premeditated,” Ligeti says when asked whether these obstacles are not merely the by-product of an overly complicated system.

“It is not just a by-product and it is much more than intentional. These laws are designed and adopted in a manner that prevents data and information which is awkward for the government from going public.”

Ligeti says the government’s intention is even clearer when one considers its decrees which set tariffs on servicing public information requests.

The struggle for government transparency

There is nothing wrong with establishing a requirement that those requesting data pay a nominal fee for scanning documents, Ligeti says, “but we are now also required to pay the labor costs of the government employees who service these data requests.” These costs must be paid even when the state entity servicing the FOI request does not provide a proper answer to the request. In cases when the state agency outright refuses to service the request, the long and drawn-out process of litigation begins.

“If the court eventually rules in our favor, we go back to the government and tell them that the court now compels them to fulfill our request. Then, instead of getting a proper response, we might receive a reply that says ‘We are going to comply with the court ruling but first you have to pay the fees of our labor in advance’.”

Ligeti says it wasn’t always like this. Before the second Orbán government, which began in 2010, state organs did not make a habit of charging fees when fulfilling FOI requests, and when they did, they were nominal.

“But now there is a tendency for government agencies and state-owned enterprises to pass their labor costs onto those requesting the data — citizens, journalists and civil society groups interested in looking at the data. That’s a major shift from the practices of just a few years ago,” he says.

The government claims that costs associated with servicing these requests — human resources and supplies — are so high that it really has no choice but to charge such high fees. But Ligeti rejects this notion and argues that the state should get with the times. He even offers a model for best practices.

“An acceptable and economical solution would be to make public interest information available over the internet — that’s the cheapest solution. And that’s how Budapest’s 14th District goes about it. They run a separate transparency website where they put up everything. The 14th District doesn’t have to deal with individual data requests. When the 14th District receives an FOI request, they simply help the requester locate the proper IP address or web-link where they can access the data they are looking for.”

While the 14th District under the mayorship of Dialogue for Hungary (PM) co-chair Gergely Karácsony has emerged as a pioneer in transparency in this regard (thanks in part to the willingness of local politicians to utilize commonsense recommendations from civil society), obfuscation on the national level continues to cripple efforts for transparency.

This seemingly impossible struggle is now reduced to lengthy court battles largely decided by hastily adopted laws meant to keep public interest information secret. And this scenario is what hampered the emergence of some of the biggest stories in 2016.

“If we consider our work in court, that is our litigation struggle and campaigns to find out where the government spends money and where these funds are going, the avenues we use are becoming narrower and the slope we have to climb is steeper and steeper,” Ligeti says.

“The government now has more leeway and opportunities to keep secrets. And it is becoming harder and harder to litigate. Furthermore, the government did its best in 2016 to adopt legislation to erect even more hurdles in the way of accessing public interest information. From this perspective, 2016 was worse than 2015. To be frank, there’s no reason to hope 2017 will be any better.”

Anti-corruption work is “sexy”

Keeping the debate alive and informing policy-makers, despite the government’s best efforts not to, is why Ligeti does anti-corruption work. When I ask him whether he feels anti-corruption work is a “sexy” issue for the average citizen, Ligeti says he thinks it is.

“I believe that having high-quality and evidenced statements in the fight against corruption is always sexy, as are efforts to have reasonable criticism of the government, or at least certain actions of the government.

“My job is to underpin our statements and judgments with legal evidence and to find ways to gather and collect more evidence. My job is to find those stories, in the vast ocean of stories, which are susceptible to core litigation and can possibly end up successful in court. Most importantly, the cases I find must be easy to interpret for the public.”

Ligeti says that even convoluted cases can be won in court, but the “social win” in such cases is lacking because the average citizen simply cannot understand the complexities of the case.

“We have to select those cases which easily help the public understand what is going on in this country.”

Ligeti says Transparency International initiated around a dozen new cases in 2016. A further 10 cases were carried over from before.

Under fire

But being the legal director of Transparency International is not an easy job. Aside from the massive amount of research and litigation it involves, working at an anti-corruption NGO also makes you the target of government attacks.

“Well, I think the government would have people believe that George Soros wakes us up every morning and tells us to come into the office, and that our work is treasonous. Ultimately, one simply needs to come to the realization that NGOs will always be weaker than the state. It’s like David and Goliath. One has to redefine success and be steadfast because you face a lot of failures and pitfalls in this line of work. Even success in litigation comes rarely.”

Ligeti says it is difficult to ascertain why the issue of corruption has not yet reached a boiling point in Hungarian society. On one hand it may be because people are quiet about it.

“Those who benefit from corruption, or at least those who identify with being on the same team as those who benefit from corruption, all keep silent. From this perspective it is easy to politicize corruption which is not a political issue in the broader sense,” he says. The problem may be that debate surrounding corruption has been dumbed down to party politics and finger-pointing.

In a much broader sense, Ligeti suspects Hungary’s systemic corruption has played a fundamental role in establishing a new “national bourgeoisie” economically dependent and politically loyal to Fidesz. He says it appears this move on behalf of the ruling party is “the ultimate justice” as “it legitimizes every move and decision used to create a new political and social edifice, a loyal and economically strong social group.”

From his perspective, this new construct is simply cronyism and favoritism.

With respect to the state’s efforts to create new “national champions” (a group of hand-picked industry leaders favored by the state), Ligeti says the success of this policy will depend on whether these “champions” are capable of competing with other market players outside Hungary and around the world.

“But this doesn’t seem to be happening,” he says, referring to these champions’ ability to compete in the international playing field.

To illustrate this point, Ligeti points at Közgép, a construction company owned by former Fidesz oligarch Lajos Simicska. Between 2010 and 2015 Közgép was the single largest winner of public procurement tenders in Hungary’s construction sector. Following the very public falling-out between Prime Minister Viktor Orbán and Simicska in early 2015, Közgép’s business dramatically declined. But instead of opting to pursue ventures outside of Hungary, it remained in the country and was locked out of virtually every opportunity it would earlier have won, back when the two men were still on good terms.

After the fallout with Simicska, Orbán went about diversifying his oligarchs. No longer strengthening any single “national champion”, the prime minister seems to have shifted tactics and has created a handful of competing oligarchs, Ligeti says.

“This creates some measure of competition, which is good even in an oligarchic situation, but it also serves as a safeguard for the government because it can prevent a single player from growing too large.”

However, the multi-oligarch system has come at the detriment of market competition. Two particular sectors which have negatively been affected by these trends are media and construction.

The only surprise in 2016

According to Ligeti, there was only one new surprise in 2016: “The massive and rapid legislation campaign undertaken by the government.”

He had not expected the government to “restart the legislation factory” after the 2014 national elections.

“Between 2012 and 2014 we had a major operation in TI to comment on government legislation in different fields, but always touching on corruption and transparency. But after the 2014 national elections I thought this was over and I would have to find new things to do within the organization. It’s also why I accelerated our litigation stream after that period. But to my great surprise a new and massive legislation campaign began in the autumn of 2015 . This continued and accelerated in 2016.”

Ligeti admits the government’s post-2014 legislative agenda caught him off guard, and this is also why he is reluctant to make any forecasts for 2017.

“On one hand I don’t want to give the government any ideas. On the other hand I know making such forecasts is wrong because the government always has good ideas on how to make our lives more difficult.”

According to Ligeti, it’s not as though the situation regarding corruption and lack of transparency changed from one day to the next. It has been a process, one that continuously worsens.

The government’s impatience towards criticism and a lack of forums where different opinions could clash with each other has also played a role in Hungary’s worsening situation.

Orbán needs civil society because it offers the veneer of pluralism, but that’s all

“I think the government needs independent NGOs and critical voices in academia because we feed the perception that there is a freedom to criticize in the country, that there is media pluralism and that there are a variety of different opinions,” Ligeti says. “But I have no doubt that if we touch on something that is too sensitive for the government or one of its institutions, and it appears that a court would be brave enough to rule in our favor, the government may become very impatient and hastily reprimand these successes by restarting their campaign against critical voices. This may end very sadly for us.”

Ligeti believes this is the goal of government campaigns to label NGOs receiving funding from abroad as foreign agents. These campaigns escalate, such as in the Norway Funds fiasco, and move beyond harsh attacks in the media.

“Intelligence services, such as the foreign intelligence service, have been doing information gathering on civil society. The government has rejected calls to open up the files on these information gathering operations, but they have admitted the existence of such documents.”

According to Ligeti, the government may choose to use these intelligence dossiers on NGOs to lay the groundwork for future attacks on civil society.

Ligeti says it takes a durable personality and nerves of steel to do anti-corruption work in Hungary.

“Further obstacles can be put in the way of accessing public interest information, and the threshold for litigating these types of cases can be lifted even higher. If this continues, we may be forced to give up our litigation stream and find new strategies to expose government wrongdoing — which is not an easy task.”

When asked at what point mounting anti-NGO propaganda and a deteriorating legal environment might force him to change jobs, Ligeti responds that “I’m not a quitter.”