The Budapest Beacon sat down with Sandor Lederer, founder and CEO of anti-corruption NGO K-Monitor, to find out how his organization weathered the Government Control Office’s (KEHI) audit of his organization, what lessons they learned from the experience, and what K-Monitor’s plans are for 2015. To see a transcript of the interview, click here.
K-Monitor’s unique approach to fighting corruption combines information technology with civic involvement. The independent “grass roots” NGO was founded in 2007 with the goal of raising public awareness of corruption.
K-Monitor was one of a handful of Hungarian NGOs audited by the Government Control Office (KEHI) last summer as part of a dispute between the Office of the Prime Minister and the government of Norway over the distribution of Norway Civil Funds in Hungary.
Lederer says the dispute is proof that, unlike other European countries and the United States, in Hungary the government is at war with independent civil society.
“This government can’t really tolerate when anyone raises their voice against it . . . and has attacked the free press in many ways,” Lederer says. “There is now no real opposition in Hungary. The opposition parties that exist are fragmented and not strong, and pose no real threat to the government… I would say that civil society has become a sort of opposition. It isn’t a political opposition or a parliamentary opposition but it is opposing the government on certain issues.”
Hungary’s independent civil society came into the crosshairs of the Office of the Prime Minister in April 2014 after Norway officially informed the Hungarian government it was suspending payment of some EUR 142 million worth of development grants after the government failed to satisfactorily address concerns over the winding up of the National Development Agency (NFU) at the end of 2013. NFU was responsible for administering EU, Norwegian and European Economic Area (EEA) development grants in Hungary before this responsibility was transferred to the Szechenyi office.
In response to the loss of the EUR 142 million in funds from Norway, Liechtenstein and Iceland, Office of the Prime Minister head Janos Lazar accused Norway of interfering in Hungary’s domestic politics and insisted it suspend payment of civil funds to Hungarian NGOs until a comprehensive agreement could be reached on all Norwegian and EEA funds. When Norway refused, Lazar and minions (including his personal hatchet man, assistant undersecretary for communications Nandor Csepreghy) accused Norway Civil Fund beneficiary NGOs of being agents for foreign governments.
“Because we were often critical of the government, we were identified as an organization that in a sense is a threat to the government’s policies, or to their power. Of course, it’s also about reputation,” says Lederer.
Although like Norway Civil fund administrator Okotars, K Monitor challenged KEHI’s right to conduct an audit of civil organizations, K-Monitor eventually complied with KEHI demands by publishing all the information requested on its website, thus also making it available to the public.
According to Lederer, the investigation lasted months. Finally, in mid-October KEHI published its findings in a lackluster report which essentially uncovered nothing.
“We were not satisfied with the report,” he says. ” We had a problem with the whole underlying premise of the investigation. But we were quite curious to see what they would find out and what would come out of this whole thing. They never mentioned any of the organizations by name, so it wasn’t possible to find out whether there was a problem with your organization that wasn’t published. The report had a very general finding according to which there was a misuse of public funds, conflicts of interests, mismanagement and so on. But you couldn’t find out what their exact problem was. So we determined that this report is a communication material for the government rather than a real investigatory audit.”
Lederer thinks the objective of the government’s investigation and the KEHI report was to tarnish the reputation of Hungary’s independent civil society. There have been no indictments as a result of the investigations.
He says experience both taught him the importance of accurate and timely financial reporting and accounting, and reinforced his belief that the government is waging war on independent civil society.
What’s in store for 2015?
K-Monitor will continue with its advocacy work in 2015. Lederer tells the Beacon that there are three particular areas the organization will be involved in, in particular monitoring the Hungarian government’s implementation of an EU directive on public procurement.
He thinks the EU directive will prompt new legislation regarding public procurements in Hungary, and he hopes K-Monitor can provide assistance in the legislative work that goes into this.
“This is very important because most of public funds are distributed through public procurements. So shaping the environment and the legal framework is a fundamental issue if you do anti-corruption work. So we will be very carefully monitoring this process and raising our voices any time we see that this is not going well, and of course making suggestions on how we would implement parts of this,” he says.
K-Monitor is also working with Transparency International Hungary on an IT program called “Red Flags in Public Procurement” that notifies journalists about suspicious calls for tenders. Lederer expressed his hope that even managing authorities will use the program to track public procurements.
Asset declaration is another area in which K-Monitor hopes to bring about change. Lederer feels that this is one particular area in which Hungarian citizens can really get a sense of what corruption looks like.
“We think that there can be huge public pressure in this area because this is an issue that people really understand. They see that a government employee is able to buy a huge villa and lands in the countryside from his normal salary. How can he do this with his small salary if there is nothing dubious going on? So I think this is an issue where people can have a special sense for what corruption is doing in this country,” Lederer says.
K-Monitor will continue developing its program called “A Halo”, or “The Net”, which shows networks between politicians, business people and state funds they receive. The program’s beta launch revealed a few kinks that still need to be worked out. The Net will enter the second phase of its development this year.