Scandals in Hungary often fizzle out, as one of our readers correctly stated, but abroad scandals don’t die so fast. They spread via the international media. This is what happened with the case of Origo, an internet news organ, whose latest editor-in-chief, Gergő Sáling, was forced to resign, most likely for political reasons. Soon enough the deputy editor-in-chief followed suit, and by now practically the whole news team is gone. A fairly large demonstration was organized immediately after the sacking of the editor-in-chief, and more demonstrations are planned for next week.
Yesterday 444.hu, a relatively new internet newspaper, came out with additional information on the case which, if true, isn’t pretty. Origo Zrt. is a subsidiary of Magyar Telekom, which is in turn a subsidiary of Deutsche Telekom, which is partly owned by the German government. 444.hu learned from a high-ranking member of the government that the firing of Gergő Sáling was the result of a deal between Magyar Telekom and the Orbán government.
Kerstin Günther / Source: Portfolio
One of the problems with the Hungarian economy is the preponderance of the state in all facets of economic life, which means that good relations with the government are very important for any company. In 2010 and 2011 relations between Magyar Telekom and the government were strained, mainly because of the extra taxes levied on communications companies. Apparently Hungarian politicians didn’t particularly like the CEO of Magyar Telekom, the American Christopher Mattheisen. Then in April 2013 the post of CEO was split in two, carving out a separate post of chairperson of the board. This new job was created for Kerstin Günther, who was very knowledgeable about Hungary because she began her Telekom career in Budapest in the 1990s. According to 444.hu‘s informer, she was sent to Hungary for the purpose of improving relations between the company and the Orbán government.
The company needed the goodwill of the Hungarian government because it is the government that decides the fates of frequencies that T-Mobil, a large part of Magyar Telekom’s business, uses. In 2013 it was time to renew these frequencies. Their renewal was vital for the company. At the end of the year, the government decided to renew the frequencies of all three cell phone companies operating in Hungary until 2022. For these frequencies the government asked a total of 100 billion forints. Magyar Telekom’s share was approximately 35 billion forints. It is 444.hu‘s claim, based on information received from its source, that Origo’s fate was sealed by the end of 2013. The deal was that Magyar Telekom would get an extension of its frequencies and that in return the management would make sure that Origo plays ball. Apparently, János Lázár “was often unhappy” about some of the articles that appeared on the site about various Fidesz and government wrongdoings, including his own.
According to the informer, Günther and Lázár met even before Günther arrived in Hungary. Lázár apparently showed her a 150-page analysis of the news items that had appeared in Origo and Híradó, the government mouthpiece that provides news to all state radio and television stations. Given Híradó‘s pro-government stance, it’s no wonder that Origo looked “dramatically oppositional.” It seems, however, that Magyar Telekom found the “study” well founded and often referred to it in arguments with Origo.
In the last two years pressure mounted on the internet site, hence the frequent personnel changes at the head of the editorial board. In three years there have been four different editors-in-chief. In government circles it was common knowledge that Lázár believed that “one must do something about RTL Klub and Origo.”
The relationship between Magyar Telekom and the Orbán government is excellent at the moment. In fact, it looks as if Deutsche Telekom will be entrusted with “the government’s comprehensive development of rural broadband access” that will cover the whole country. Or at least this is what János Lázár said in his parliamentary hearing that approved his suitability for the post of minister at the head of the prime minister’s office.
444.hu immediately translated the article into English, and naturally the story was picked up by several important German papers, especially since DPA (Deutsche Presse-Agentur) reported on it. A long and detailed article, not based on the DPA summary, entitled “Under Pressure” appeared in Süddeutsche Zeitung by Cathrin Kahlweit. She operates out of Vienna but knows the Hungarian scene quite well. In the article she reminds her readers that four years ago the controversial media law “drew international protests,” and says that it seems that the Orbán government is again using “money and new legal provisions to impede critical reporting.” According to her, Deutsche Telekom received a one-billion euro contract from the Hungarian government for the “expansion of the broadband network,” the price of which was the taming of Origo. Deutsche Welle also reported on the attempted censorship by the Orbán government. And naturally, Reporters Without Borders protested as well.
Up to now two opposition politicians, Gergely Karácsony (E14-PM) and András Schiffer (LMP), have written letters to Timotheus Höttges, CEO of Deutsche Telekom, in which both strongly disapproved of the alleged “deal” between Deutsche Telekom and the Hungarian government. Karácsony called the deal unethical and expressed his hope that Deutsche Telekom would not be a partner to such a dirty affair. Surely, he said, Höttges considers freedom of the press a basic right. Schiffer’s letter was equally hard hitting and expressed amazement that a respectable firm operating in a democratic country would lend its name to such shady business.
Deutsche Telekom is washing its hands of the affair. The spokesman for the firm emphasized that they are all for freedom of the press but reiterated that they have nothing to do with personnel changes within Origo, which are the “result of internal restructuring.” I fear that will not be enough.
Hungarian Spectrum 
“444.hu learned from someone close to government circles that the firing of Gergő Sáling was the result of a deal between Magyar Telekom and the Orbán government.”
This is not correct and it is not what the original article says.
According to the original article:
“A high-ranking member of the government has also confirmed to 444.hu that the deal included expectations relating to Origo.hu.”
Which is certainly not true. “High-ranking members of government” would castrate themselves before talking to opposition papers which they all hate and which hates them all.
When something is this obviously made up, It discredits the whole story. If they lied in this, what’s stopping them from lying in the other parts?
Oleg – ummm, that’s why the government source is anonymous – for the exact reason you mentioned. So, despite what you believe, government sources will talk to journalists from non-friendly media outlets – they just won’t do so publicly.
How about this hero?
http://444.hu/2014/06/06/a-telekom-ugy-alkudozik-a-magyar-sajtorol-mintha-egy-kilo-krumplirol-lenne-szo/
He sent his SIM card back to Magyar Telekom because he doesn’t want to give money to a company that will sacrifice Hungarian press freedom for business. Awesome!
Remember, we can do the same if we’re not bound by a loyalty contract with them.
It’s also quite hilarious to go to Deutsche Telekom’s facebook page right now and see their posts inundated with comments from angry Hungarians.
http://www.facebook.com/deutschetelekom
@Eva
“For these frequencies the government asked a total of 1 trillion forints. ”
I would like to correct the number: 100 billion forints.
@Oleg, thank you for calling my attention to my mistranslation. I fixed it. I would like to add that it is very possible that by now there is real tension within the inner circle and there might be someone who is ready to squeal.
Tappanch, it is you who is so good with numbers. I can easily get confused with all those zeros. 🙂
Media Authority forced the closure of the last frequency outside Budapest of Klubradio today.
They sealed the broadcasting equipment.
http://nol.hu/belfold/lekapcsoltak-a-debreceni-lokomotiv-radiot-1466747
http://nmhh.hu/cikk/163362/Hatosagi_eljarast_kovetoen_nem_folytatja_tovabb_jogellenes_mukodeset_a_Lokomotiv_Radio
This is totally out of context but I would like to call attention to a course offered by Coursera, an internet offering of on-line lectures on different topics. I would like to emphasize that I don’t suggest to take for people to take these on-line course instead of attending college, but I found some of the lectures very interesting and useful.
Right now, I am following a course on the European Union. I have learned a great deal in the last few years about the functioning of the EU but I am still learning a something new by listening to these lecture. For example, I found it incredible that only 6% of the EU budget goes to the actually upkeep of the administration of the EU.
Although the course started on May 6, I don’t think that it is too late to join. Here is the link:
https://class.coursera.org/europe-002
A little OT – there was an article in the Guardian a day or two ago about Vodafone revealing the number of requests they’d had to monitor phone calls or provide metadata on subscribers’ calls. Data from Both the UK and Hungary were included in the article, and the comparison between the two is quite interesting.
The figures for the UK was a single number of metadata requests for all the local mobile operators combined, whereas the Hungarian figures only related to requests for metadata from Vodafone. And yet the numbers expressed as a percentage of the number of subscribers in each country were almost the same (around 0.64% for the UK and 0.63% for Hungary).
Vodafone only has 25% of the total subscribers in Hungary, so this means that the amount of ‘snooping’ going on in the UK, for all networks, is the same as that happening in Hungary for just one quarter of networks. Or, put another way – proportionately, there is four times as much mobile phone surveillance going on in Hungary, despite the fact that the UK has potentially a much greater need for such surveillance (terrorism, organised crime, etc).
Why is the Hungarian government so interested in its citizen’s mobile calls?
Eva,
While the revelations of 444.hu seem damaging to Deutsche Telekom, I have to disagree with your assessment that they may not get away with what they have responded to the situation so far.
Even in Western countries where governments and the state have much less of a role in running companies, the attempts of multinational corporations to – minimum – twist the arms of lawmakers for more favorable and unethical policies is fairly common, although possibly less pervasive than in Hungary. The difference between Hungary and Western countries is that in the latter politicians take serious risks when engage in such shady deals. Such an exposure of a lawmaker as Lazar’s in Hungary would have had very serious consequences.
So I’m just musing about the naivete of Schiffer and Karacsony (along with the masses of Facebook protesters) pleading to Deutsche Telekom : if such a deal existed as claimed it is the Hungarian governing party that should be accountable for it. After all, DT’s primary responsibility is toward its stockholders, while it’s the politicians who should be accountable to their constituency. As one of HVG’s op-ed columists put it: why would DT miss out on a 100-billion forint business when Hungarian voters traded in the freedom of press for 3000 Ft of utility bill reduction (“rezsicsokkentes”) per voter, just a couple of months ago?
There are conspiracy theories and there are conspiracy facts. This deal is the latter.
There are literally dozens of people who have firsthand knowledge of Fidesz’ efforts to control origo.hu in the last 15 years. In fact origo.hu was always thought of by DT as a kind of bargaining chip, which it could give up if push comes to shove. It was acknowledged internally that it has to give it up sooner or later given the ‘various pressures’ from the Fidesz governments.
Only these people do not want to talk on record (never a practice in Hungary anyway), but the 444.hu journalists have heard them telling these stories from their own mouths. Also, the colleagues of those who had actually first hand knowledge (a couple of hundred people who also heard the stories all through the years) now know that the official statements are a blatant lie. Not that they were naive to begin with, but it is always a sad reminder.
Now, the stupidity of this is that DT does not get that now that it gave up the only thing that Fidesz really wanted (apart from money), there is nothing left to give really.
Just like with any blackmail, after you pay, there is a huge incentive for the blackmailer to come back for more. This is what’s gonna to happen, only DT has nothing left to offer, it will pay money, but it always had to, so that is obviously not enough. What is it that it will give then?
I tell you. DT will use its influence in Germany to help Orban’s government to get small favors. Essentially DT will be Orban’s lobbyist. Whether the Germans like it or not, this is what will happen, because pressure will grow despite the smiley meetings with Lázár. There may be a bit of a lull to make them believe that they played their cards well, let them calm down, but then the whole game will start anew.
The very fact that 444.hu referred to an unnamed government official (whose identity is known to 444.hu), in other words the deal was acknowledged by the government itself and in Nepszabadsag one can read about the potential increase of taxes which would be disadvantageous to DT mean one message: do not think for a sec that just because you fired the editor in chief (and maybe sell origo soon) you are off the hook. No. You are here and we own you.
Rest assured that Orban will come back for more. Again, the hopelessly naive Germans (even if they think they are so smart) thought that they could be smarter than Orban. The issue is is that any manager at DT or any democratic government always have a very short term vision, until the new elections, until the contract is up for renewal. They have to make deals which brings them just beyond the next threshold. While a real autocrat like Putin or Orban plans for the long term. There is no escaping them. The pressure will continue and they will have to yield. And they will.
“Western Multinational makes shady immoral deal with scumbag dictatorship in order to…make money.”
It’s hardly a shocker of a headline is it really?
But this, kind of is
“444.hu learned from a high-ranking member of the government that the firing of Gergő Sáling was the result of a deal between Magyar Telekom and the Orbán government.”
Two interpretations here. There has been a sudden discovery of a conscience within the regime’s higher echelons…. highly unlikely.
But if not, then what? Somebody is out to take down Lazar?
None of this scandal would have been possible without an insider within the dark heart of Fidesz leaking, that is the only fact we know for sure.
@Otto89
Thanks, spot on. Fidesz very long ago realized that there is no such thing as an organization. There are only people.
And these people for all sorts of reasons, because they want to get promoted, do not want to look for a job in a tight job market and so on, are susceptible to incentives and pressures.
DT isn’t different from any other ‘scary’ institution. Top people there want to keep their jobs as they got used to a certain life-style, want to show to their superiors that they can get things done, want less distraction by problematic subsidiaries and so on so they will always enter into deals.
Putin is indeed similar to Orbán, because just like Putin and his people Orbán and his people have similarly great people’s skills. They study people thoroughly and apply all sorts of incentives, otherwise they wouldn’t be where they are in the first place.
For all we know DT’s lobbyists could already be helping Orban here and there. Just a little favor, you know. And for Orban it’s already enough, because this is how you build a great relationship. Slowly, bit by bit. Not a friendship, mind you, but a relationship which is always clear about Orban’s superiority.
Even though RTL Klub has not shown a political news item for years and thus was completely neutral politically, if anything it assisted Orbán in various ways, and Origo was as middle-of-the-road as you can get this state of affairs was not enough for Fidesz.
Origo for example never really had an op-ed section when Index was once famous for it. Obviously Index was eventually subdued as it lost two editors-in-chief and Origo (which similarly lost two rounds of editors prior to Sáling) while it introduced op-eds it eventually decided to starve it slowly.
I think what remains of that section is edited by a guy who Origo brought in from Magyar Hirlap, which is an even crazier and more-loyally right-wing outfit than Magyar Nemzet is, if this is possible at all.
Fidesz wants complete control over these entities and I agree that slowly, but surely it will gain that control. The expats at RTL and DT or at any foreign banks want to keep their jobs and don’t want to go home to some boring Belgian suburb.
Here they are kings, special, they talk to government people, their costs and expenses are paid, including a hardship allowance, they are important, while at home they are some middle managers in some giant corporation. So these expats are always the most reliable ambassadors of the will of the Hungarian government, because from the beginning they present the situation to their superiors so that their own job in Hungary would be kept, which inevitably means a compromise with the government.
This is just one episode in a long story. Fidesz is gradually gaining control over everything in Hungary and our supposedly freedom-loving friends from the developed West are enlisted to assist actively. Move on, there’s nothing to see here.
@Paul
Keywords: Government spying on its citizens, Guardian, Vodafone
Sources:
http://www.theguardian.com/business/2014/jun/06/vodafone-reveals-secret-wires-allowing-state-surveillance
p.76
Click to access vodafone_full_report_2014.pdf
p.38
Click to access vodafone_law_enforcement_disclosure_report.pdf
That is quite a shame. Certainly in the case of the other investments it will not be much different, even if probably not so blatant as in this case with Origo. I also think that this affair is not yet over for Deutsche Telekom, it will take some time to make it known in Germany but it will certainly come up next time there will be official statements to the effect that Orban Viktor is not playing by the democratic rules.
This corrupt German manager must be fired. She brought shame to Deutsche Telekom.
Her shady deals must be investigated.
Poor Hungary needs people who can run its affairs openly.
Light must projected on criminal deals of the regime.
The supporters of regime must wake up. Who will start this process?
I would like to hear more from people like Dorottya Karsay.
At least it is reassuring to see that when it comes to pressure and opportunism, it’s not only Hungarians who buckle. Orban is exploiting universal weaknesses of humans; he’s only been working the Hungarian population longer. Don’t get me wrong, I do believe that the Hungarian society was a lot more susceptible to his machinations than other (western) countries with stronger democratic norms. Still… though the reaction of Hungarians may be socially conditioned, it is not “genetic.” Orban can find the weak points in an organization/society and is shameless about exploiting it. Another case in point how he plays the EPP and the EU.
Why are bloggers so surprised that a rogue government is willing to employ pressures on companies that no civilized government in the 21st century would employ? Isn’t this the same government that hasn’t seen national institution–whether courts or what have you–that it hasn’t seen fit to pervert? Isn’t this the government that seeks out instability and insecurity for its citizens?
So then, when the national head of a multi-national corporation behaves in a ‘when-in-Rome’ fashion, what’s the surprise? She’s furthering her market share in a jungle society, that’s all.
Ms Balogh, please remove my comment above.