No free and plural media in Hungary? The government’s answer to Neelie Kroes

The reaction to Viktor Orbán’s speech a week ago has been uniformly negative. Even the conservative Wall Street Journal agreed with the liberal New York Times that Orbán’s vision of the future of Hungary is incompatible with western values, specifically the values of the European Union of which Hungary is a member.

This speech and its aftermath necessarily turned attention away from other developments, among which one of the most important is an article by Neelie Kroes, European commissioner responsible for the Digital Agenda for Europe. In the last four years there were two female members of the European Commission who especially irritated Viktor Orbán. One was Neelie Kroes and the other Viviane Reding, Commissioner of Justice, Fundamental Rights and Citizenship. The latter is one of the two Luxembourgians who dared to raise their voices against Viktor Orbán’s policies and therefore incurred the ire of Hungary’s “pocket dictator.”

The article appeared simultaneously on the website of the European Commission in English and in Hungarian in Népszabadság. The original title of the piece is “Media Freedom remains under threat in Hungary,” while the Hungarian title is shorter and therefore somewhat stronger: “Media freedom is in danger.”  Let me republish this short article here:

A free and plural media is the foundation of a free society, and a safeguard of democratic tradition. The new “advertising tax” in Hungary shows it is still very much under threat.

This new tax was introduced in Parliament in just a few days, without significant debate or consultation. Ostensibly an “advertising tax” to raise revenue, in fact it disproportionately affects on single media company, RTL. Indeed, according to their own calculations, they are the only single company that would face the highest rate of the tax; imposing significant losses and putting in jeopardy their ability to operate.

The conclusion is obvious. RTL is one of the few channels in Hungary not simply promoting a pro-Fidesz line; it is hard to see that the goal is anything other than to drive them out of Hungary. The Hungarian Government does not want a neutral, foreign-owned broadcaster in Hungary; it is using an unfair tax to wipe out democratic safeguards, and see off a perceived challenge to its power.

The freedom of establishment is a fundamental principle of the single market.

But it is about more than just one tax or just one company: it is part of a pattern that is deeply worrying; a pattern contrary to the EU’s values. Taxation cannot be an instrument for discrimination, and tax policy should not be a political weapon.

A new media law introduced in 2010 put huge powers over the Hungarian media into a body subject to political interference: breaching the Hungarian constitution and EU law and jeopardizing fundamental rights. Later on, opposition radio station Klubrádió lost its licence; they eventually got it back, after a complex and costly fight, but the episode revealed (in the words of the European Parliament) “biased and opaque tendering practices.” In 2013, new laws placed restrictions on political advertising. Meanwhile, just last month, the editor of oneline newspaper ORIGO was dismissed after it uncovered a political scandal; many ink his dismissal to political pressure.

Some of these criticisms and concerns have been addressed, under pressure from the EU and the international community. Others remain a very real worry.

A recent report from the OSCE shows that the impact this is having. It found that, in the run-up to recent elections, the majority of monitored TV channels showed “significant bias” towards ruling party Fidesz; with RTL being one exception. And it highlights an “increasing number of outlets directly owned by business people associated with Fidesz.” The picture it paints is of a media sector that is (at best) uncertain and self-censoring; and at worst partisan if not government-controlled.

In that environment it is deeply damaging that the government would turn a blind eye: they should be engaging positively to manage threats to media pluralism. The fact is, government control, monopoly and censorship belong to a different, darker, period in Hungary’s history: and no one should seek a return to it.

Fair and unbiased coverage is a principal function of a free and plural media. Undermining that, and attempting to silence dynamic debate, is an attack on Hungarian democracy. For the sake of that democracy, and of the Hungarian people who have fought so hard to enjoy its benefits, we cannot stand by as idle spectators.

Hungary is not the only EU country where such concerns and debates exist; these are also issues raised, with different emphases and in different contexts, in Bulgaria, Italy, the UK and others. Europe needs to get its own house in order to ensure a free and plural media. There are many proposals out there for how to achieve that–including those set out in the Report of the High Level Group chaired by Vaire Viķe -Freiberga. It’s time we started taking those ideas seriously, for the sake of our freedom and democratic values.

An answer came immediately from Gergely Gulyás, who was recently elevated to a new parliamentary position. He became deputy-president of parliament responsible for the legislative work of the House. In brief, all pieces of legislation that come before parliament will have Gulyás’s approval. Quite a position for a thirty-three year old. The tone of the letter is typical of this political leadership: arrogant and sermonizing.

Commissioner Neelie Kroes

“We agree with Neelie Kroes that ‘a free and plural media is the foundation of a free society’ and we are happy to report that the Hungarian media is free and plural. And as far as Hungarian society is concerned it is also free.”

According to Gulyás, everything is in order with the advertisement tax. It has been in the works for years. RTL Klub is not being discriminated against, because the tax depends on advertising revenues. RTL just happens to receive the largest share of ad revenues. Every segment of society must bear its fair share of the tax burden. RTL is no exception. Political revenge on the part of the government is out of the question because RTL Klub until now spent little time on politics. However, since the passage of the tax law the station “has been one-sidedly slandering the government and its politicians.” It seems that for Gulyás reporting on political scandals is nothing but slander.

Gulyás also objected to Kroes’s contention that the Hungarian government wants to drive out foreign companies. In this connection she reminded the Hungarian political leadership of “the freedom of establishment [which] is a fundamental principle of the single market.” Foreign companies have a large share of the Hungarian media market and this will most likely be the case for a long time to come, he said. As for “democratic values,” Gulyás would like to know exactly what kinds of values Neelie Kroes has in mind. After all, in 2013 the secretary-general of the Council of Europe found everything in order with the 2010 media law that Kroes is now criticizing.

Gergely must have been happy to find a factual error in Kroes’s letter in connection with Klubrádió. Indeed, Kroes wasn’t precise enough. Although Klubrádió valiantly fought for its survival for more than three years, it did not lose its license in Budapest. But what Gergely neglected to mention was that it did lose eleven other frequencies throughout the country. By now Klubrádió can be heard only in Budapest.

Gulyás was equally at a loss to know what Kroes could possibly mean by “biased and opaque tendering practices” in allotting radio frequencies. Gulyás “would like to inform the Madame Commissioner” that all the rules and regulations are constitutional and transparent; all applicants are treated equally, and there is the possibility of legal appeal.

As far as restricting political advertisement, Gulyás finds nothing wrong with the current practice. Every country in the Union has some restrictions. As does Hungary. And the current practice is fair because it gives the same chance to all parties regardless of their financial strength. It is in fact a highly democratic practice.  With respect to the firing of the editor-in-chief of Origo, allegedly for political reasons, there is no proof of it and “it is irresponsible of the commissioner to bring it up without any proof.”

As for the OSCE report which Kroes claims found bias in television news coverage in favor of the government, this allegation is also incorrect. If there had been such a bias, the liberal-socialist opposition parties would have gone to the Media Authority to protest, but with the exception of far-right Jobbik no party did.

Finally, Gulyás complained about the political pressure coming from the European Union every time the Hungarian parliament passes laws affecting foreign banks and companies.

This last accusation leads me back to Viktor Orbán’s speech. It looks as if the simultaneous appearance of two very strongly worded editorials in The New York Times and The Wall Street Journal surprised the right-wing political analysts. They can’t imagine that these two papers would independently call for strong sanctions against the Orbán government because they were genuinely shocked by the message delivered by Viktor Orbán on the virtues of “illiberal states.” Instead, they pulled out a favorite from the Hungarian right playbook, a conspiracy theory.

Ágoston Sámuel Mráz of Nézőpont Institute, a right-wing think tank with large orders from the government, believes that “foreign interest groups may be behind the attack [on Viktor Orbán] which will be deprived of considerable revenues because of the reduction of utility prices, taxes on the banks and advertisement.” Csaba Lentner, an economist who currently teaches at the newly established Nemzeti Közszolgálati Egyetem (National University of Civil Service)  thinks that The New York Times editorial might in fact be against international law because a newspaper from the United States is urging action by the EU against Hungary. A bizarre contention. I might add that Lenter, who is currently a great supporter of Fidesz, was a MIÉP member of parliament between 1998 and 2002. MIÉP was an openly anti-Semitic, far-right party.

More resolute foes of Orbán’s plans for Hungary come from unexpected quarters: Luxembourg and Norway

In the past four years most of the battles between Viktor Orbán and the European Union have ended with a victory for the Hungarian prime minister. Or, if the Budapest government was forced to make changes in some of its controversial laws, they usually smuggled in other equally controversial provisions while allegedly fixing the problems with the first version. Eventually, the “bureaucrats” of Brussels, worn down, were satisfied with superficial, inconsequential changes that did not matter as far as Viktor Orbán’s long-range plans were concerned. But now he is confronted with other kinds of foes: Norway, which does not belong to the European Union, and the Luxembourg-based RTL Group, Europe’s leading entertainment company which is majority-owned by the German media conglomerate Bertelsmann. Neither of them seems to be a pushover.

I was surprised to see that almost three weeks had passed since I first wrote about the war between the Hungarian government and RTL Klub, the Hungarian subsidiary of RTL Group. At that time I reported that the Hungarian government had proposed a bill that was designed to tax the advertising revenues of all media outlets on a sliding scale depending on profitability. RTL Klub is the most profitable television station in the country and hence would get hit the hardest. In fact, the proposed tax of 40% on its revenues could cripple it. Since more than half of all revenues from the advertising taxes would come from RTL, it became evident fairly early in the game that the whole bill was designed to target this particular television station.

The answer from RTL Klub was swift: the news editors decided to spend more time on political news than before, and they made sure that every day there was some story that reflected badly on the government. The government answered in kind. Mihály Varga, minister of national economy (basically the minister of finance), instructed the Nemzeti Adó- és Vámhivatal (NAV/National Office of Taxation and Customs) to examine the tax history of RTL Klub because, as he put it, “there is a suspicion that some of the transactions of Magyar RTL Klub in the past years are fictive; they don’t reflect actual business activity but are designed solely for tax write-offs.” It was at this point that an MSZP member of parliament charged that Hungary was no longer a country of law  (jogállam). The government was using the tax authorities to “punish” companies not to its liking.

The management of RTL didn’t cower. They told reporters that NAV has been after the company constantly. By now they have a department that deals only with tax matters. They have nothing to hide, and they invited NAV to come and investigate. It turned out that the “suspicious transaction” was a 2011 loss of 23 billion forints. The loss came about in the following way. RTL Klub purchased two cable companies which a year later were sold to its parent company. Apparently this transaction is a perfectly legitimate business practice. Because of this loss, RTL wouldn’t have to pay advertising tax this year. And that cannot be allowed.  Thus, the government had to come up with some other way to get to RTL.

Source: http://www.targetgdpi.com/

So came the old Orbán trick. If the law for one reason or another doesn’t have the desired result, let’s change the law. And indeed, as one newspaper put it, before the ink had even dried on the bill came an amendment according to which a company would be exempt from the tax this year only if its profits were either zero or negative in 2013. Clearly, this amended bill targets only RTL Klub. As László L. Simon, the man who presented both the original bill and its amendment, said, Hungarian newspapermen were the ones who called attention to this loophole. Since the government wants to make sure that everybody pays an equal share of the tax, they decided to change the bill.

Yesterday L. Simon for a solid 17 minutes tried to explain the intricacies of his amendment to the audience of ATV while a helpless young reporter sat and listened without interrupting him. He was less lucky when he made the mistake of giving an interview to RTL Klub. As a result of this interview it became evident that L. Simon doesn’t know what is in his “own” amendment. So much for law making in Hungary.

The RTL Group refuses to throw in the towel. Only yesterday a long interview appeared with Andreas Rudas, the director responsible for South-Eastern Europe, who as you might suspect from his name has a Hungarian background. He made it eminently clear that what is going on right now “is not a question of money” as far as the RTL Group is concerned. The firm is ready to stand by media freedom and to go to the highest courts to win against the Hungarian government.

During the course of the conversation we learned that Lis Mohn, the widow of Reinhard Mohn who was the owner of the media conglomerate Bertelsmann, serves on the supervisory board of the firm. And what is also important is that she is a good friend and supporter of Angela Merkel. Rudas revealed that he knows that the topic of what is going on with RTL Klub in Hungary is being discussed in Berlin as well as in other European capitals. RTL Klub is prepared to sue and they don’t care how much it will cost or how long it will drag on. It seems that Orbán has found his match in the business world.

Equally resolute is the Norwegian government. On June 25 a letter was sent to the Prime Minister’s Office which was brief and to the point concerning the suspension of the Norwegian Grants. No lifting of the suspension can take place until the demands of the Norwegians are met, which include the immediate cancellation of “the on-going audit by the Government Control Office.” The letter added that the “audit of the Hungarian NGO program is the responsibility of the Financial Mechanism Office in Brussels.” Well, that is clear enough. No answer has come yet from János Lázár’s office. As Népszabadság commented on the situation: “Lázár and Co. ran into a cement wall.”

In both cases we will see who will break his head first on that cement wall.

The war is on: The Hungarian government versus the media

During the Antall-Boross administrations after the change of regime (1990-1994), the government launched a full-fledged war against the media. At that time practically all Hungarian journalists were liberal. The right of center, which the government considered itself to be, was not represented in the print media or on television and radio. (At that time there was only one television station, MTV, and one radio station, MR.) The government tried to establish pro-government papers, but they were not financially successful. So, in the early months of 1994 the decision was made to get rid of all those journalists whom the government found objectionable at MTV and MR. Over one hundred journalists were fired just at Magyar Rádió. The government’s triumph was pyrrhic because a few months later MDF lost the election and the fired journalists triumphantly returned on the very day of the socialist victory.

The Orbán government’s “handling” of the media has been both more subtle and much more ruthless. It is true that the public television stations were again cleared of undesirables and by now these organs are no more than propaganda machines of the government, but there is no longer the need to establish pro-government newspapers because Fidesz in the last fifteen years or so managed to acquire a full-fledged media empire. It seems, however, that this is  not enough for Viktor Orbán, who wants to completely eliminate all independent and critical voices. The best way to achieve this is to strangle them financially and, if that is not enough, to intimidate them. And if that doesn’t work, the Hungarian government is ready to put pressure on media outlets via their owners as was the case in the Origo affair.

This latest war on the media has a new element. It looks as if the Orbán government wants to get rid of foreign owners of media outlets. Mysterious Hungarian owners managed to buy TV2, originally owned by the German media giant Prosiebensat1, and it looks as if the decision was made to kill off  the foreign-owned RTL Klub, the most popular commercial television station in Hungary.

I covered the beginnings of the RTL story but, since then, the war between the firm and the Hungarian government has only escalated.  In order to understand what’s going on we must understand that RTL Klub might be the most watched television station, but it is not known for its high quality programs. On the contrary, the level is quite low. People call the station “trashy.” Personally I don’t think that all TV networks should satisfy highbrow audiences and, if the Hungarian public enjoys the RTL Kub’s offerings, who are we to criticize. What, on the other hand, people rightly objected to was RTL Klub’s news programs. Almost as if there had been a tacit understanding between government and management concerning the choice of news items. Stories that cast a bad light on the government or its members were conveniently left out or underemphasized and hidden. In this way, the argument goes, RTL Klub hoped “to buy the goodwill of the government.” But, critics point out, there is no way to appease this government. If Viktor Orbán wants to get rid of you, sooner or later he will succeed. RTL Klub right now is in the way of the government. Why? Perhaps because it is a fierce and successful competitor of TV2 and its new owners, who are apparently close to Viktor Orbán and Fidesz. Hence, the advertisement levy seems to be designed to kill off RTL Klub.

So, what was the station’s answer? They decided to bring up all the dirty linen of the government that until now they had studiously ignored. It is funny to hear an old story from years or months back being dredged up suddenly. They also decided to report truthfully on the important stories of the day, including those they would have left out in the past.  RTL Klub is only doing now what any self-respecting television news program should be doing, and they should be ashamed of themselves for not having done the same in the past.

Well, this is not exactly how the Hungarian government sees it. The counterattack began already on June 14 when the prime minister’s office objected on its website that RTL Klub’s news mentioned the fact that Viktor Orbán’s father’s business has flourished despite the bad economic figures of the last few years. It was pointed out by the news editors that the elder Orbán’s business relies exclusively on state orders. This was translated by the prime minister’s office as an act of revenge because they have “to pay taxes in Hungary.” Antal Rogán, the whip of the Fidesz parliamentary delegation, continued the attack on the station. The fact that RTL Klub’s headquarters are in Luxembourg comes in handy for Fidesz politicians because, as we know, there are several politicians from Luxembourg who are not to Viktor Orbán’s liking: Viviane Reding and Jean-Claude Juncker, for example. And now here is this Luxembourgian firm that uses its news “as a political weapon.” Rogán complained that it “intimidates and insults public figures,” even the prime minister’s father. It is sad, he continued, that “these billionaires from Luxembourg think they can do anything.”

This foreign media conglomerate looks upon Hungary as if it was its “colony,” János Lázár charged in Napi Gazdaság, another government mouthpiece recently acquired by Századvég. Moreover, he called RTL Klub a “corrupt firm.” After all, why didn’t it broadcast negative news items about the government and government politicians in the past? “If there is no tax there are no discrediting items; if there is, then come stories about Viktor Orbán’s father, daughter, or friend, Lőrinc Mészáros. This is unimaginable in any other country of the European Union,” he declared. He added that it was a mistake to let foreign companies own television stations in Hungary because  “they don’t possess the national point of view.” They are interested only in profit.

RTL’s management was not intimidated and rejected all accusations, while reiterating their belief in democracy and freedom of the press. They also stressed “the patriotism of  their employees.” RTL’s answer pointed out that freedom of the press is “a national treasure whose defense is the duty of all of us.” And the accusation that RTL Klub doesn’t pay taxes is a lie: just last year they paid 8.9 billion forints in taxes and other dues to the central budget.

Meanwhile the less than pleasant but true news items continue to be aired. 444.hu found at  least ten items in today’s news that reflect badly on the government, starting with the very questionable allocation of gambling concessions and ending with the U.S. statement on intimidation of civil society and media in Hungary, published also on Hungarian Spectrum. 

I have no idea who will win this fight. Most people think that it will not be the RTL Klub. But then all three television stations that can be watched nationwide without a cable subscription will be in Fidesz hands in one way or the other. That will mean that the government will control practically 90% of all the electronic media. Back to the good old days of the Rákosi and Kádár regimes.

The war is on: RTL Klub and the Orbán government

Yesterday Freedom House published its latest report on the post-communist countries, “Nations in Transit 2014: Eurasia’s Rupture with Democracy.” Freedom House lists the countries by geographic region: the Balkans, members of the European Union, and Eurasia. It measures the performances of these countries by something it calls the “Democracy Score” (DS), which represents the average of a country’s seven democratization indicators: electoral process, civil society, independent media, national democratic governance, local democratic governance, judicial framework and independence, and corruption. In addition, it calculates an NIT rating for each country on a scale of 1 to 7, with 1 representing the highest level of democratic progress and 7 the lowest.

According to the report, the DS in all three regions has been steadily declining since 2010. As far as the NIT ratings (civil society) are concerned, only the Balkans countries show considerable progress between 2005 and 2014.

Among the new post-communist EU members (Bulgaria, Czech Republic, Estonia, Latvia, Lithuania, Poland, Romania, Slovakia, and Slovenia) the country with the lowest DS score is Romania (3.46), followed by Bulgaria (3.25), but right next to it comes Hungary with a score of 2.96. Quoting the Orbán government’s slogan, one of the local newspapers wrote: “Hungary is performing better,” yes, better than Bulgaria!

The report states that the case of Hungary is “the most poignant reminder that democratization in post-communist Europe is neither complete nor irreversible.” By the end of 2013 Hungary’s DS score was one full point worse on the 1-7 scale than it was in 2004 when the country entered the EU. The report warns: “Any further deterioration in governance, electoral process, media freedom, civil society, judicial independence, or corruption under Prime Minister Viktor Orbán’s recently reelected government will expel Hungary from the category of ‘consolidated democratic regimes’ next year.“ 

And I’m afraid that given the events that have taken place since the national election in April, the likelihood of such an eventuality is almost guaranteed. The destruction of democratic institutions had been rapid even before the last election, but since then it has only accelerated. Two of the categories considered by Freedom House, civil society and the media, have been especially targeted in the last  few weeks.

Earlier I touched on Origo‘s encounter with János Lázár, who apparently pressured the owner of Magyar Telekom, a subsidiary of Deutsche Telekom, to keep the popular online paper’s journalists in line and refrain from any overt criticism of the government. The firing of the paper’s editor-in-chief caused a greater uproar than the CEO of Origo anticipated. Fairly large demonstrations and mass resignations of editors and journalists followed. But that was not all. Simultaneously with the upheaval that followed the Origo affair, the government decided to levy very heavy taxes on the media based on their advertising revenues. It looks as if the government specifically targeted the German-owned RTL Klub, a subsidiary of the RTL Group, which is Europe’s leading entertainment company. It has interests in 54 television and 29 radio stations in 10 different countries.

It seems, however, that RTL Group is not going to take Viktor Orbán’s attack lying down and that it is ready for an extended war with the Hungarian government. Earlier there had been talks that the Orbán government put pressure on the German firm to sell the station but was rebuffed. Thus Orbán and his minions moved on to the second nationwide commercial television station, TV2. There the pressure worked because the station was actually losing money. In any case, the government’s extra levies on advertising will hit RTL Klub the hardest. More than half of all taxes will come from this one station. It looks as if this tax is a punishment for the RTL Group’s refusal to sell the station.

Dirk Gerkens. Photo MTI / László Baliczay

The CEO of RTL Klub, Dirk Gerkens, a German-Spanish businessman who has been running the Hungarian subsidiary for the last thirteen years, is a combative type who is well prepared for the “war.” As he said not so long ago, “if there is war, there will be war strategy too.”  Since “the war” between the government and RTL has apparently been going on since the fall of 2013, the RTL management was well prepared for its latest counterattack.

A few hours after the announcement of the proposed advertisement tax RTL issued a sharply worded statement. Since then RTL reacts every time a government official says anything about the advertisement tax or RTL. The management indicated that if the financial squeeze of the station continues, they might have to take off some of the most popular programs: “Among Friends,” “X-Factor,” and “Budapest Night and Day.”

Lázár called RTL’s reaction “blackmail” and suggested to Gerkens that they should go back to Germany and blackmail the German government. Gergely Gulyás, chairman of the parliamentary committee on legislation, complained about the low quality of the two commercial stations, RTL Klub and TV2. As he put it, one should look upon this new tax on media advertising as a variation on the newly introduced tax on unhealthful foods, the “chips tax,” because these stations have a harmful effect on society. It didn’t take long for RTL to reveal that Gulyás at one point asked for and received a free ticket to the finals of X-Factor. Yesterday RTL Klub aired a fairly long segment on Lőrinc Mészáros’s billions, which was delivered in a decidedly sarcastic manner.

We don’t know what else RTL Klub has in its arsenal, but a journalist of 444.hu gave its management a few ideas. For example, in the very popular show, “Among Friends,” they can put in a few lines about politics. Someone asks “Uncle Vili” what he thinks of the decrease in utility prices and Uncle Vili responds: “They try to fool the plebs.” Other members of the team can be transformed into people who are suddenly very interested in politics and who make snide remarks about the government. In the other hit, “Budapest Night and Day,” the chimney sweeps no longer come to the apartment on Margit kőrút because they went bankrupt. A few characters die of smoke inhalation because Hungarian health care is in ruins. There is no garbage pickup because of utility price decreases, and dysentery spreads among the inhabitants of the apartment house.

But jokes aside, the Orbán government has been very dissatisfied with RTL Klub’s news even though liberal old timers in the media complain bitterly that one of the great sins of the two commercial stations is that their news covers almost no important items, with most of the airtime spent on tabloid and police news. The station naturally disputes this and points to RTL II’s newshour that caused friction between the Orbán government and RTL management in the past. Fidesz leaders complained that RTL II’s news was too critical of the government party, especially during the election campaign.

It will be interesting to watch the developments. It is possible that RTL Klub will be a great deal more forceful and effective than the European Commission has ever been when it comes to media freedom and the destruction of democratic norms.

Is Deutsche Telekom lending a helping hand to the Orbán government to suppress media freedom?

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.

The attack on the media is backfiring

The events of the last few days in Hungary have already aroused the interest of the foreign media as well as international organizations concerned with the media and civil society in general. János Lázár might insist that he put no pressure on the CEO of Origo Zrt. to remove Gergő Sáling, the editor-in-chief, but journalists unanimously told AFP that Sáling “was forced out” for political reasons after the site published a story about the extravagant travel expenses of János Lázár, Viktor Orbán’s chief-of-staff. Transparency International also considers the Origo affair “intimidation aimed at stifling the voice of civil society and democratic oversight.” And this is just the beginning. One can be sure that in the next few days important German- and English-language papers will have articles about the Hungarian government’s heavy-handed interference with the distribution of Norwegian Fund grants and the pressure it put on the management of Origo.

Meanwhile the scandal is growing, as scandals usually do. After the firing of the editor-in-chief, András Pethő, deputy editor-in-chief, resigned. He was the author of the article that incurred the wrath of János Lázár. Soon afterward Péter György, the founder of Origo, also resigned from the governing board. He is the head of the Film, Media and Cultural Studies Graduate Program at ELTE.  Deutsche Telekom naturally refuses to bear any responsibility for what happened at the subsidiary of its subsidiary, Magyar Telekom, while Origo Zrt. steadfastly denies any connection between the editor-in-chief’s firing and the article about Lázár’s trip. So does Lázár, who tries to portray himself as a man of honor who would never put political pressure on the media. In fact, according to 444.hu, political pressure on Origo has been constant over the last three-four years. Ever since Viktor Orbán became prime minister of Hungary.

There are always people who are convinced that the Hungarian public will swallow anything and everything this government does. They claim that Hungarians have difficulty with the concept of solidarity. In brief, nothing will ever change. I don’t agree with this assessment of the situation. I’m convinced that there will be a tipping point. We don’t know what will prompt a widespread response to an abusive and dictatorial authority. The tipping point can happen at any time and over any issue, but I would say that launching a broadside attack on the media is not a bright move on the part of the government.

Yesterday one may have been disappointed that only 1,000-1,200 people decided to protest the government’s actions against the media. But by today the opposition to the government looks much more impressive. More than sixty media outlets joined forces against the introduction of  taxes on advertisements. And, what is most important, not just left-of-center TV and radio stations, newspapers, and web sites got together but right-wing media as well: not just RTL Klub but also TV2 and HírTV. Among the radio stations not only Gazdasági Rádió but also Katolikus és Lánchíd Rádió. Among newspapers not only Népszabadság and Népszava but also Magyar Nemzet, Nemzeti Sport, and Metropol. Among online newspapers not only Hír24 but also Mandiner.hu.  And many, many others. Tomorrow the television stations will be dark for a while and newspapers and online newspapers will be blank. I think János Lázár and his boss made a big mistake. They managed to turn even friendly, often servile media against them.

And the Orbán government is facing other problems at the moment. I will mention a few. Lately the European Court of Human Rights handed down several decisions that found the Hungarian government in violation of the Convention for the Protection of Human Rights and Fundamental Freedoms. Although the Orbán administration swears it will not abide by the court’s rulings, one has the feeling that they might be forced to change their minds. Then there is the Norwegian case. It looks as if the Norwegians are not about to be pushed around by Viktor Orbán and his chief-of-staff, János Lázár. Today the Hungarian ambassador to Oslo was called in by the Norwegian foreign ministry. After the conversation Géza Jeszenszky could only say that he hoped the misunderstanding would be cleared up soon.

And let’s not forget the infamous monument which, though still not erected, continues to provoke criticism. This monument, which was supposed to serve as a symbol of Hungary’s loss of sovereignty on March 19, 1944, has been strongly opposed by historians, the Jewish community, and the center-left political forces. Even American Jewish congressmen and senators got involved and wrote to a letter to Viktor Orbán asking him to sit down and discuss the issues surrounding the idea of the monument. Viktor Orbán just answered the American legislators and told them that the monument will stand regardless of what the whole world says, including the Hungarian public. According to Medián, more than 55% of the Hungarian population thinks that the monument falsifies the country’s history. Yet he goes ahead.

Finally, there is the question of Viktor Orbán’s strong objection to Jean-Claude Juncker for the post of president of the European Commission. More and more it looks as if the anti-Juncker forces will not prevail, especially since Angela Merkel is under strong pressure to stick with Juncker, the choice of the European People’s Party. In order for the British-Swedish-Dutch-Hungarian anti-Juncker forces to succeed they would have to gain the support of 55% of the member states and 65% of the population. Somehow I don’t think they will be able to convince that many heads of state to vote for another candidate.

Hungary is fighting battles on so many fronts that it might seem strategically suicidal to open up two more fronts: the Norwegian Fund and the media. There is, however, one possible explanation for the government’s aggressive behavior. The European Union right now is between two administrations and occupied with an internal struggle between the European Parliament and the European Council. Perhaps Orbán decided that under these circumstances Brussels would be too busy to care much about Hungarian domestic problems. Given the latest developments, however, it seems that Brussels is still functioning and is quite capable of acting against the Hungarian government if it does not abide by the rules. And the “domestic disturbances” are turning out to be a much bigger deal than Orbán and Lázár thought.

Renewed attack on the Hungarian media: freedom of the press is at stake

As I was settling down to write this post, a large demonstration in Budapest was just coming to an end. It was organized by journalists who protested the sudden firing of the editor-in-chief of Origo, one of the best and most widely read internet newspapers. Gergő Sáling, the editor in question, has been working for Origo for twelve years, but it was only in November 2013 that he was named editor-in-chief of the paper. Why did the owner of Origo, Magyar Telekom, decide to sack Sáling? Origo has the reputation of being an independent site that views Hungarian politics in a critical manner. But rumor has it that pressure was put on Origo to change its government-critical posture, and as a result editors-in-chief have come and gone lately. It seems that Sáling was not pro-government enough. In fact, he made the mistake of allowing András Pethő, one of the journalists at Origo, to investigate the latest Lázár affair.

The sign says “Is it still possible to bark?” Source: Klubrádió

The Origo affair is only the tip of the iceberg. Since winning two elections in a row, Fidesz and the Orbán government have decided to attack the remaining remnants of Hungarian democracy with full force. Besides the NGOs, their other target is the media. This time, however, they may have gone too far. Something unexpected happened. Even right-wing journalists joined liberals to oppose the latest plans to silence critical voices.

A new bill was submitted for consideration to levy heavy taxes on media outlets’ advertising revenues. The new bill proposes taxes on all such revenues but on a sliding scale. Those outlets with the largest advertising revenues would have to pay a tax of 40%. The bill seems to have been aimed at RTL Klub, the largest foreign-owned commercial television station in Hungary. The other important commercial station is TV2, but it seems it would be spared the 40% levy. You may remember that TV2 was recently purchased by mysterious buyers suspected of being closely connected to Fidesz. So, the first reaction was that the Orbán government wants to eliminate TV2’s only serious competitor by financially ruining RTL Klub. The management of the television station claims that if they are forced to pay such a hefty sum on their advertising revenues, they might as well close their doors. Soon enough they will be bankrupt. In fact, RTL estimated that its share of the ad tax would be about 4.5 billion forints, nine times its 2013 profits.

The story might not be so simple, however, because it looks as if TV2’s management is also up in arms and ready to join RTL Klub’s protest. I also heard rumors that even HírTV might join them. That may be only a rumor, but today’s Magyar Nemzet came out with a scathing editorial on the advertising tax. Péter Csermely, deputy editor-in-chief of the paper, viewed the bill as a bald political move: “the two-thirds indeed wants to step on the throat of freedom of the press.” Strong words from Csermely who normally on the P8 program makes Fidesz politicians look good with his softball questions. In his opinion, taxing advertising revenues makes no sense whatsoever because the central budget will receive only nine billion forints from this new tax while every ten forints spent on advertising adds fifty forints to the GDP. So, he came to the conclusion that the proposed tax is meant to put a lid on free speech and the press.

But that is not all. László L. Simon, the Fidesz member of parliament who proposed, or more precisely lent his name to, the bill, threatened that further taxes, this time on internet social media, will be introduced. And speaking of the internet, a few days ago the Constitutional Court came to the conclusion that comments attached to articles are the responsibility of the publishers. This ruling may mean that online newspapers will no longer allow readers’ comments.

But let’s return to the Lázár affair that ended with the firing of the editor-in-chief of Origo. Some time ago, one of the journalists at Origo went to court because the prime minister’s office refused to give out details about secret trips János Lázár took. The courts backed transparency and the law and ruled that the details of the trips, rumored to be very lavish, must be revealed. The prime minister’s office reluctantly obliged. It turned out that the cost of these trips exceeded the wildest imaginations of the journalists. In November 2912 Lázár spent three days in London. The bill was 920,000 forints. In March 2013 he spent two days in Switzerland that cost 469,000 forints just for lodgings. In July he traveled to Italy, again for only two days, which cost the taxpayers 582,000 forints. Upon further probing, Origo found out that the bill totaling 1.97 million forints for these three trips actually covered the expenses of two people.

Lázár was incensed. He wrote a snotty “reply to the article of origo.hu” and posted it on the webpage of the prime minister’s office. The letter included such sentences as: “I am glad that the independent Hungarian courts find it important to get acquainted with my traveling habits.” Or “Appreciating the unbiased, objective, and correct reporting and valuing the journalist’s work in the defense of the Hungarian budget, I decided to renounce the travel allowance that I am entitled to.” He specifically mentioned András Pethő’s name, adding that he would like to make his day with this gesture. One’s immediate reaction is: if Lázár was entitled to the travel allowance, why is he returning the money?

We still don’t know much about the nature of these trips, but it was reported in the media that the persons who accompanied Lázár were “interpreters.” That is curious because, according  his official biography, he speaks both German and English.

Today we found out a few more tidbits, at least about the trip to London. According to Zsolt Gréczy, the spokesman for the Demokratikus Koalíció who gave a press conference on the subject, Lázár stayed at the Crowne Hotel, the most expensive accommodations in London. Apparently, that is the favorite hotel of members of the Hungarian government. Lázár’s job, it seems, was to convince the British to allow a meeting of Viktor Orbán with David Cameron. In fact, Viktor Orbán hoped that Cameron would come to Budapest to demonstrate his support of the Hungarian prime minister. DK learned, however, that Lázár completely botched his negotiations in the Foreign Office and in the end Szijjártó had to be sent to London to straighten things out.

And a final note. The reporter for the official Hungarian telegraphic agency, MTI, was present at the press conference. In fact, he even addressed a question to Zsolt Gréczy. However, MTI chose not to report on the event. That means that the details DK unearthed will get to very few newspapers and online outlets because they all receive MTI news free of charge. I read about it in Népszava, because one of its reporters was there. This would not be the first time that the MTI management decides not to publish reports that do not reflect well on the Orbán government. So much for transparency and truth.

The free Hungarian media is under renewed attack, but it seems that this time even pro-Fidesz journalists are ready to stand by their colleagues on the other side of the great divide in Hungarian politics. They seem to realize, as Benjamin Franklin famously said, that “We must, indeed, all hang together, or most assuredly we shall all hang separately.”