TI legal director: Hungary’s prosecution service based on Soviet model

August 1, 2016

The head of Hungary's prosecution service, Péter Polt
Chief Hungarian prosecutor Péter Polt seems unconcerned about the alleged embezzlement of central bank funds.

Miklós Ligeti, Director of Legal Affairs for Transparency International Hungary, published a piece in last week’s edition of Magyar Narancs in which he outlines how Hungary’s prosecution service is obstructing any attempt to open an investigation into the National Bank of Hungary (MNB) foundations scandal.

A full translation of Ligeti’s article can be found on our sister site, The Budapest Sentinel, by clicking here.

Main takeaways from the piece

  • The foundations are directly controlled by the MNB through the individuals sitting on their respective supervisory boards (the foundations were incorporated and endowed by the MNB, and individuals in question are comprised of the higher-ups at the MNB). The MNB’s control over these foundations shows that the foundations did not act independently when they decided to engage in financial transactions which raise the strong suspicion of embezzlement.
  • Hungary’s Prosecutor General is unlawfully obstructing any pre-investigation and investigation into the suspected embezzlement. This is evident in the procedural barriers used by the prosecution service to suppress criminal complaints in the matter, including complaints raised by Transparency International Hungary. The nature and timing of these complaints and subsequent unlawful procedural barriers are documented in Ligeti’s piece.
  • According to Ligeti, there is absolutely no recourse against the prosecution service’s use of unlawful procedural barriers because any legal remedy for this situation is heavily subject to Prosecutor General Péter Polt’s hierarchical control over the prosecution service. (Polt’s wife, Marianna Polt-Palásthy, is also a ranking employee of the MNB and connected to the foundations.)
  • The Prosecutor General’s hierarchical control over the prosecution service allows him to arbitrarily obstruct, reassign or close the investigations being carried out by his subordinates.
  • In a recent Council of Europe “Group of States Against Corruption” (GRECO) report, the Council recommended that decisions on the removal of cases from prosecutors “ought to be guided by strict criteria and be justified in writing in order to avoid arbitrary decisions”.
  • A separate Venice Commission ruling expressed concerns about “the high level of independence of the Prosecutor General, which is reinforced by his or her strong hierarchical control over other prosecutors”, and went so far as to recommend a “sufficient system of checks and balances” within the system.
  • The current MNB scandal, and the prosecution services’s unwillingness to open even a pre-investigation into the matter, shows that both the Council of Europe and Venice Commission were spot-on with regards to their assessment of Hungary’s prosecution service.
  • But this problem is not something that has just now become evident. “The ability of senior prosecutors to have limitless powers to instruct subordinate prosecutors without so much as a written paper trail and to reassign individual cases significantly erodes the independence of individual prosecutors and their professional autonomy,” Transparency International wrote in a report published in 2013.
  • The problem here is two-fold. On one hand, the prosecution service is neglecting to perform its duty and investigate. On the other hand, the prosecution service simply cannot be held accountable. The latter is the result of the Prosecutor General not being accountable to any outside system of checks and balances.
  • The lack of any system to hold the Prosecutor General accountable is a legacy of communism. The construct of Hungary’s current prosecutorial system was first introduced to Hungary in the 1950s at the behest of Soviet influence. Since the fall of communism, there have been calls to make the Prosecutor General accountable to the government, but these calls have fallen on deaf ears.
  • What’s more, this particular problem is here to stay. Legislative changes introduced in 2011 only strengthened the Prosecutor General’s role within the prosecution service.
  • Current Hungarian law provides the Prosecutor General with a nine-year mandate, and the mandate is extended indefinitely until a two-thirds supermajority in the National Assembly of Hungary elects a successor. In other words, should just over one-third of the members of the Hungarian Parliament oppose a new Prosecutor General candidate, the incumbent Prosecutor General can remain in office until the end of time.
  • This provision “increase[s] considerably the political influence in respect of the election” of the Prosecutor General, GRECO wrote in its assessment on the law governing the tenure of Hungary’s Prosecutor General.
  • According to Ligeti, “this is of great consequence, especially when one considers the importance of the Prosecutor General’s responsibility to investigate serious corruption cases with high-level political ties.”