Hungary to legalize corruption

November 24, 2014


The 2015 budget bill would allow for members of parliament’s relatives and companies to directly secure EU and state funding, reports investigative on-line website Átlátszó.hu, clearly the way for official corruption.

The small amendment discovered by Átlátszó in effect says that MPs making decisions about EU and state funding can allocate funds to their own companies and relatives without committing a conflict of interest. The investigative journal wrote that this effectively undermines efforts to reveal or counter state corruption and effectively legalizes the direct funding of political parties through NGO funds.

Earlier this year the Hungarian government filed criminal charges against Norway Civil Grants managing NGOs for allegedly funding political organizations through NGOs.  Átlátszó argues that from January 2015 members of parliament will be permitted to engage in precisely the same activity, the obvious exception being that it will involve Hungarian taxpayer money.

According to the proposed budget bill, the following passage will be entirely deleted from the 2007 act regulating funding applications:

6 §.  (1) The following are not allowed to apply or to be funded during an application

f, any association, trade union, or any subsequent sub-department of such organizations, or legal entities falling under the auspices of church law

fa, who have signed a cooperation agreement with any of the political parties registered to legally operate in Hungary in the five years preceding the publication of a grant application (further referred to as party)

fb, who has nominated candidate together with a political party on general, municipal or EP elections in the five years preceding the advertisement of the application

Mihály Varga, Minister for National Economy, has attempted to justify this amendment by writing that it “will ensure equal opportunities for all civil organizations.”  By the same argument, all organizational funding provided from the state budget is to be exempt from regulations regarding conflict of interest.

The act regulating the issue in the case of state, EU and other international funding applications was serving as the legal ground for Hungary’s Government Control Office, KEHI, to investigate Norway Civil Grants manager Ökotárs.

In addition, transparency rules concerning public disbursements to NGOs have been softened up by budgetary law amendments. The bill proposes a scheme whereby only successful applications will be published. Unsuccessful ones are to be destroyed.  Recently, it was revealed that the vast majority of government funds disbursed to civil organizations went to pro-Fidesz NGOs.

According to Átlátszó, the 2015 amendment will in effect legalize such a system, as well as make it legally possible for the government to conceal details about the methods of distributing funds.

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