Tensions mount as Hungarian government cracks down on media and civil society

June 4, 2014

Origo
News of the politically motivated sacking caused a flash mob to gather in front of Origo’s Budapest offices.

Politically motivated sacking of origo.hu editor in chief triggers protest in Budapest

Some two thousand protesters gathered in front of Hungarian news website Origo.hu’s Budapest offices on Tuesday afternoon to protest the politically motivated sacking of the daily news portal’s editor in chief, Gergo Saling.  Saling joins a long list of managing editors to be sacked as nominally independent media outlets come under increasing government pressure to practice self-censorship.

The protest was organized by popular Hungarian blog Kettos Merce (Double Standard), which called on the public to “express solidarity with the employees of Origo.hu and the civil organizations which are under attack”.

Demonstators were also protesting the further erosion of press freedoms in Hungary and recent attempts on the part of the government to cut off foreign funding by attempting to discredit and intimidate Hungarian foundations entrusted with administrating the distribution of European Economic Area and Norway civil grants in Hungary.

Background on Saling’s resignation

Late Monday night Hungarian news website 444.hu reported that Origo.hu editor in chief Gergo Saling had been forced to resign.

News reports attributed his resignation to government pressure on the publisher in response to a string of articles highly critical of the government, in particular State Secretary (soon to be minister) Janos Lazar.

In response to popular outrage, on Tuesday morning Origo.hu’s owner, Origo Zrt., stated that “in trying to adjust to changing media consumption trends, [Origo.hu] would like to place a larger emphasis in the launching of a more integrated content strategy and will be reorganizing the resources of its current content planning structure”.

However, according to numerous sources close to Origo.hu, Saling’s departure had more to do with his willingness to publish content critical of the government and government officials.  According to Saling the terms of his severance agreement prevent him from disclosing any details, volunteering only that his “departure occurred after coming to an agreement with management” which Saling himself “did not inititiate”.

The government giveth and the government taketh away

On Monday the government announced that it intended to impose a special progressive tax on the advertising revenues of media outlets.  The tax would mainly target independent television channels, in particular RTL, the largest and most important of Hungary’s few remaining independent television stations.

Even smaller, pro-government media outlets have objected to the proposed tax.  However, the word on the street is that the government intends to compensate them by placing that much more advertising with pro-government media.

The carrot and the stick

Hungary’s Media Law adopted in 2011 under the second Orban administration marked the beginning of the end for press freedom in Hungary. With the sword of Damocles hanging over their heads in the form of ruinous penalties and both civil and criminal prosecution for defamation, Hungarian media outlets have had little choice but to practice self-censorship.

Advertising by national government and state-owned companies now constitutes a significant source of income for many media outlets, particularly those prepared to tow the government line.  A recent study showed that government ads now make up nearly half of all ads run by pro-government Magyar Hirlap, Magyar Nemzet, Landhid radio and Echo TV.  It is not unusual for daily or weekly publications to contain several half- or full-page ads paid for by one ministry or another.  The May 30 edition of free daily Metropol contained two full- page full-color ads – one from the Office of the Prime Minister greeting Hungary’s newly elected MEPs and asking them to represent Hungary’s interests in the European Parliament and “not to forget that we are all Hungarians”, and another from the Hungarian National Bank offering low-interest, ten year loans to Hungarian companies.

Copious government spending on advertising serves as a major financial inducement for Hungarian media outlets to limit their news coverage to uncritically republishing articles appearing on the state news agency (MTI) website, and a major disincentive to publish articles critical of the government.  The government’s practice of selectively advertising with a certain set of media “partners” creates an unlevel playing field and can make and break media companies overnight.

As a result a number of foreign-owned media companies have either pulled out of the country or sold their media holdings to media conglomerates with close ties to Hungary’s ruling party.

The result is a legal and economic climate that is increasingly hostile to a free and independent media.

Lazar’s face has been in the news quite a bit lately

Tension between Origo’s owners and Saling came to the fore during Hungary’s general elections.  When domestic news outlets 444.hu, Hir24 and Magyar Narancs were banned by Fidesz from covering its election night event, Origo.hu refused to cover it in a show of solidarity with the blacklisted news outlets.

Tensions reached a breaking point after Origo.hu published articles portraying Lazar in a less than favorable light. In an investigative article about the reimbursement of expenses incurred by government officials, Origo.hu writer Andras Petho revealed that Lazar had sought reimbursement for unusually large expenses incurred during “official” trips to Italy and Switzerland. When asked by the Origo.hu writer about the purpose of the trips, the Office of the Prime Minister responded that the trip to Switzerland was to attend “a meeting with a German citizen regarding Germany-Hungary relations and Hungary-Russia relations”, and the trip to Italy was taken in connection with “a meeting held at a hotel specifically chosen by our counterparts at which we met to discuss the illegal transfer of funds from Hungary to Switzerland”.

Represented by attorney Zsolt Nemeth at the behest of Transparency International Hungary, Origo.hu took the Office of the Prime Minister to court to demand a more detailed answer. The presiding judge ruled in Origo’s favor on the grounds that it is important to know the details surrounding the cost of the trips because this is the only way to determine “whether the use of public funds is justifiable”.

When news of the court’s decision was made public, rather than offer a more detailed answer, Lazar announced he would return the funds in question to the state.

The media attention generated by his questionable compensation came at a bad time for the State Secretary who, as Hungarian investigative journalism website Atlatszo.hu uncovered one week earlier, had been invoiced €30,000 (USD 41,000) for an upcoming hunting trip in the Czech Republic.  Calculating with the official rate of EUR 30 per pheasant, Atlatszo.hu estimated Lazar had planned to shoot between 2500-3000 pheasants.

Reports about his expensive tastes have drawn a lot of public attention because many do not understand how he can afford it.

Many attribute Saling’s resignation to Origo.hu’s owners bowing to government pressure – not uncommon in Hungary. Saling’s departure from Origo.hu indicates that – at least in Budapest – a growing number of people are aware of, and prepared to publicly protest against, the further curbing of press freedoms.

Civil unrest over attempts to cut off foreign funding of Hungarian NGOs

The Budapest Beacon has covered the Hungarian government’s war on civil society extensively. In this particular case the government’s war on non-governmental civil organizations is actually the result of the Hungarian government’s struggle to get its hands on non-public funds provided from outside the country.

In mid-April, State Secretary Janos Lazar wrote to the government of Norway accusing them of meddling in Hungary’s domestic affairs by providing funding to organizations with ties to political parties. The funds Lazar referred to are part of the Norway Civil Fund – a fund to strengthen civil society in the EU’s 15 most underdeveloped nations. The fund’s contributors are Norway, Liechtenstein and Iceland.

The Royal Norwegian Ministry of Foreign Affairs responded politely by explaining there is no political agenda from the donors, and that the funds in question are distributed in Hungary in accordance with the Memorandum of Understanding entered into by Hungary’s own government and Norwegian officials in November 2011. The Norwegian Ministry of Foreign Affairs’ response called Lazar’s accusations “surprising” and invalid.

On 30 April, State Secretary Lazar’s deputy, Nandor Csepreghy, was quoted by the Hungarian press as saying that Norwegian Civil Fund’s Hungarian administrators were a “useless group of partisan tricksters”.

On 7 May, the consortium of Hungarian foundations entrusted with the responsibility of administering the Norwegian Civil Fund’s grants in Hungary responded to Csepreghy by unanimously rejecting his statements as “unacceptable, especially coming from a representative of the government”.

On May 10, Norway, Lichtenstein and Iceland decided to suspend further disbursements of development funds to Hungary under the EEA and Norway Grants scheme because the Hungarian government has breached the international agreements outlining the implementation and monitoring of funds. However, the donors reaffirmed their confidence in the implementation of monitoring of funds distributed through Norway Civil Fund (which is part of the EEA and Norway Grants scheme) and would continue to provide the funding for Hungary’s civil sector through the consortium of Hungarian foundations entrusted with administering the civil fund.

Hungary’s government responded by stating that the government itself should have a greater say over how the funds are distributed.

On May 21, Csepreghy announced that the Office of the Prime Minister had asked the Government Oversight Authority to audit all funds coming from the Norway Civil Fund. Csepreghy stated the audit was needed to “clarify whether there are grounds for suspicions arising over the past few weeks on the part of the Hungarian government that Norway Funds supported political organizations or civil organizations tied closely to them”.

Last week the Norway Civil Fund’s donors advised the Hungarian foundations entrusted with administering the funds not to comply with the Hungarian government’s demands for an audit. The donors reasoned that, as the funds in question are provided entirely by the Norway Civil Fund and involve no public funds from Hungary, its activities fall outside the purview of the Government Oversight Authority.

Upon learning of this, the government threatened to revoke the tax identification number of the Hungarian foundations if they did not comply with the audit. The government announced the audit would take place on Monday, 2 June.

Veronika Mora, CEO of the Okotars Foundation (the leading foundation of the consortium of foundations responsible for administering the funds), reaffirmed the wishes of the donor countries and stated the foundations have “nothing to hide” and “always cooperate with bodies authorized to inspect”.  Nevertheless, she pointed out, the government’s examinations have no legal basis and its unclear objectives represent a form of harassment rather than a method of a demonstrating transparency.

Then came the weekend. Everyone was filled with suspense over whether the government would actually carry out its threat. Members of the press assembled at the offices of the Okotars Foundation on Monday morning and waited for agents of the Government Oversight Authority to show up as expected at 9am. They never did. Instead, the government’s agents first raided the offices of the consortium’s other foundations and seized documents related to their activities. Later, around 3pm, the government agents finally arrived at the offices of the Okotars Foundation.

On 4 June, pro-Fidesz newspaper Magyar Nemzet reported that Norwegian officials had summoned Hungary’s Ambassador to Norway, Geza Jeszenszky, to attend a meeting to discuss the Hungarian government’s conflict with the Norwegian Civil Fund. Jeszenszky told Magyar Nemzet the summons came as no surprise because the Norwegian media has also covered the events unfolding in Hungary.

Referenced in this article:

Váratlanul kirúgták az Origo főszerkesztőjét, 444.hu; 2 June 2014.

Főszerkesztőjének nevével hekkelte meg saját címlapját az Origó, 444.hu; 3 June 2014.

Origo Zrt.: A megváltozott médiafogyasztási szokások miatt van szükség új főszerkesztőre, 444.hu; 3 June 2014.

Lázár: Beszéljen az Origo kirúgott főszerkesztője!, HVG.hu; 4 June 2014.

Magyarország Fekete hétfője utá, Kettős Mérce; 3 June 2014.

Ön jól ébredt? Lázár János nem!, 444.hu; 28 May 2014.

Lázár János 23 millió forintért rendelt csehországi fácánvadászatot, Atlatszo.hu; 21 May 2014.

Szimpátiatüntetés a leváltott főszerkesztő mellett, Origo.hu; 3 June 2014.

Tüntettek a kirúgott Origo-főszerkesztő mellett, 444.hu; 3 June 2014.

Lázárék ketten hozták össze a kirívó hotelszámlákat, Origo.hu; 27 May 2014.

Egy régi embere is kísérte Lázárt a költséges utakon, 31 May 2014.

Janos Lazar accuses Norway of interfering in Hungary’s domestic affairs, BudapestBeacon.com; 10 April 2014.

Norway tells Janos Lazar to go jump in a Fjord, BudapestBeacon.com; 30 April 2014.

Norwegian Civil Fund administrators to Janos Lazar: We are not a “useless group of partisan tricksters”, BudapestBeacon.com; 8 May 2014.

Norway, Liechtenstein, Iceland suspend disbursement of development grants to Hungary, BudapestBeacon.com; 10 May 2014.

Hungarian prime minister’s office issues misleading statement regarding EU fiscal transfers, BudapestBeacon.com; 19 May 2014.

Hungary government oversight authority to audit use of EEA and Norway Grants, BudapestBeacon.com; 21 May 2014.

Ráküldik a Kehit a Norvég Alapra, Propeller.hu; 21 May 2014.

Norvégia – Lázár: negyvenmilliárd – null, de a meccs csak most kezdődik, 444.hu; 28 May 2014.

Norway Funds accuses Hungarian prime minister’s office of harassment, BudapestBeacon.com; 30 May 2014.

Norvégiában berendelték a magyar nagykövetet, HVG.hu; 4 June 2014.

Délután elment a Kehi az Ökotárshoz is, HVG.hu; 2 June 2014.

Lázárék a civileket akarják megfélemlíteni, 444.hu; 2 June 2014.

Trükkösen kezdődött a Kehi-ellenőrzés a civil szervezeteknél, 444.hu; 2 June 2014.

Váratlanul csapott le a Kehi norvég alapos alapítványokra, Origo.hu; 2 June 2014.

THE JESZENSZKY AFFAIR, Hungarian Spectrum; 4 November 2012.

Ezt nem teszik zsebre – itt a RTL reakciója a reklámadóra, propeller.hu, 3 June 2014