The Hungarian government turns up the heat on the NGOs

Yesterday I wrote about Viktor Orbán’s pro-Russian policy, which does not endear him to Washington. Another sore point is the Hungarian treatment of certain NGOs and the attacks of late on independent organizations that receive money from the Norwegian Civic Fund. Barack Obama specifically mentioned the importance of NGOs as watchdogs over rogue states like Hungary. One would think that Viktor Orbán might try to mend fences with the U.S. by retreating a bit on this issue and not pursuing the controversial attacks on the Ökotárs Foundation, the distributor of the Norwegian Civic Funds. But no, these attacks have shifted into even higher gear.

In May the government ordered KEHI (Kormányzati Ellenőrző Hivatal = State Audit) to investigate the case. The Norwegians consider the investigation illegal because in their opinion the money Ökotárs distributed among several NGOs was not part of the Hungarian budget. The money never entered the Hungarian treasury in any way. The funds came straight from an office entrusted with the task located in Brussels.

If the Hungarian government had wanted to remove at least this particular sore point from the agenda, they could have quietly dropped the case and simply forgotten about the report KEHI prepared. Or they could have come out with a very mild reprimand for some lax practices. But Viktor Orbán wouldn’t be Viktor Orbán if he had chosen that path. Instead, yesterday KEHI released its 40-page report in which it accused Ökotárs of mismanagement, fraud, forgery of private documents, and unauthorized financial activities.

As usual, Magyar Nemzet was the first publication to write about the report. Their initial article indicated that the KEHI document is already in the hands of János Lázár. From that point on Magyar Nemzet kept publishing shocking reports about the frivolous items these NGOs spent their money on. The one that caused the greatest uproar was the purchase of tampons. It turned out that the Kékpont Foundation was guilty of this particular crime. The foundation, which deals with drug addicts, gave “motivational” hygienic packages to the addicts, and the tampons were in packages distributed to the women. All these stories came out in Magyar Nemzet before the report was made available to the Ökotárs Foundation.

Yesterday at last the document itself appeared on KEHI’s website. Okotárs over the years distributed 500 million forints and KEHI found something wrong with 200 million worth of the grants. Actually, the questionable items amounted to only 10 million (about $41,000). Yet Lázár is outraged and wants to renegotiate the contract with the Norwegian government. He promptly invited the “appropriate Norwegian minister” to Hungary for a friendly chat. Then, perhaps realizing the absurdity of his suggestion, he added that after all he would be ready to meet the Norwegian politician in Brussels.

Norwegian flag

What will Lázár tell the “appropriate Norwegian minister”? Norway should break the contract with the Ökotárs Foundation since it is not worthy of Norway’s trust. The funds should be distributed by “state or private organizations.” The English translation of the report will be sent to the Norwegian ambassador in Budapest as well as to the European Commission.

But not all accusations are in the KEHI report. Népszabadság reported that investigators at KEHI complained about Veronika Móra’s frequent meetings with American diplomats as well as her visits to the Norwegian embassy. These kinds of contacts are suspect in the eyes of the regime, as we know from Viktor Orbán’s “illiberal” speech in Romania.

Meanwhile Magyar Nemzet kept attacking both the Norwegian government and Ökotárs. Yesterday morning an article appeared in the paper which claimed, on the basis of information coming from KEHI, that Ökotárs passed on important documents for safekeeping to the Norwegian embassy. And that is not all. Officials at the embassy postdated certain documents. While KEHI investigators were at it, they decided to accuse the Financial Mechanism Office (FMO) that handles the Norwegian funds in Brussels of complicity because its official suggested to Ökotárs that it move all its documents out of Hungary.

Late last night journalists from more independent media outlets began looking at the findings of KEHI. András Földes of Index observed that only in history books could one find examples of such accusations that used to lay the groundwork for show trials in the Rákosi period. And, he added, “the officials are actually proud of it.” The proof presented to the journalists did not convince them, but they surmised that the officials of KEHI simply did what was expected of them by the Hungarian government. The results were preordained. Without going into the details, the KEHI officials, by pasting together parts of different sentences, actually falsified the intended meaning of Ökotárs’s CEO. The reporter for Index cites several dubious practices of KEHI that call into question the validity of the charges.

In light of the above it is no surprise that Veronika Móra, CEO of Ökotárs, said to MTI today that it is impossible to respond to “accusations that are not supported by facts.” If the KEHI officials found irregularities, they should have described them precisely, but in the document one finds only generalizations. It is full of phrases like: “it also happened,” “there was also such a case.” Ökotárs is ready to go to court and hopes for a favorable verdict.

As for the Norwegian response to the publication of the KEHI report, according to a brief English-language article on the Norwegian internet site, The Local, the Norwegian government already considered the KEHI probe illegal and it is unlikely that after this most likely fraudulent report they will change their minds. It is worth quoting some passages from this article:

Hungary’s squeeze on foreign-funded NGOs has been criticized by Norway and the United States…. US President Barack Obama last month included Hungary in a list of countries where “endless regulations and overt intimidation increasingly target civil society.”…  Relations between the US and Hungary sank further last week when Washington issued entry bans to six unnamed Hungarian government officials it suspected of corruption. The US charge d’affaires in Budapest, Andre Goodfriend, told AFP on Tuesday that “intimidation of civil society” as well as “centralisation of authority, lack of transparency, and corruption” could prevent the US continuing as an ally of Hungary.

Norway was tough all along but now it must feel even more hardened since the United States is supporting its stance on this matter.

Assault on the Ökotárs Foundation in charge of disbursement of the Norwegian Civic Fund

On September 6 The New York Times published a long article by three investigative journalists entitled “Foreign Powers Buy Influence at Think Tanks.” According to the article, a lot of foreign countries, especially smaller ones, use think tanks located in Washington, D.C. for lobbying purposes. These countries’ lobbyists find direct contact with members of Congress or officials of the State Department difficult to come by, and thus they lobby indirectly through the non-profit organizations to influence official and unofficial opinions. Many of the examples the article cites are connected to Norway’s gifts to the Brookings Institute and the Center of Global Development. The reason for the focus on Norway is that Norway is a country with very liberal transparency laws. Thus, it was relatively easy to get information on the Norwegian government’s relationship with American think tanks. Some of these gifts were used to combat global warning, others to convince Congress to spend more money on foreign aid. Some of them clearly served Norway’s direct interests–for example, to promote plans to expand oil drilling in the Arctic. Hungary, by the way, was listed as being among the many countries that use think tanks to advance their lobbying activities. Hungary has such working relations with the Atlantic Council. The size of Hungary’s contribution was not revealed.

This report did not go unnoticed in Budapest. Today Magyar Nemzet carried an article entitled “Norway’s 22-Million Dollar Mask.” They called attention to The New York Times article, reminding their readers that the Kormányzati Ellenőrzési Hivatal (KEHI/National Bureau of Investigation) is currently investigating the Ökotárs Foundation, which is responsible for the disbursement of grants provided by the Norwegian Civic Funds. The harassment of this foundation as well as of the NGOs that received grants through it has been going on for months, but the article that appeared in The New York Times came in handy for the Orbán government. In the article several people were cited who criticized this kind of lobbying activity by foreign governments. It was easy to extend this criticism to foreign meddling in Hungary. If the Americans find the activities of Norway harmful from the American point of view, then surely the Hungarian government has every right to investigate what is going on in Hungary with the Norwegian Funds.

Of course, the two cases are quite different. It is one thing to fund so-called independent think tanks in order to influence lawmakers and opinion makers and quite another to fund NGOs whose spending on specified activities is carefully monitored. But, from the Orbán government’s point of view, the latter is undoubtedly more dangerous than the former.

This morning around 9 o’clock a dozen or so policemen attached to the Nemzeti Nyomozó Iroda (NNI/National Office of Investigation) appeared at the headquarters of the foundation. They sealed the office, told employees they could not use their cell phones, packed up all the documents they could find, and by 6 p.m. led the director of the foundation straight to police headquarters. I assume that the appearance of the article in Magyar Nemzet and this morning’s raid on the Ökotárs Foundation are linked. Of course, the harassment of Ökotárs is not new. It has been going on for months. Over the last few weeks charges leveled against them have been varied. First it was preferential treatment given to certain groups that are close to LMP; later the complaint was that certain civic groups that don’t represent liberal, anti-government sentiments are being discriminated against. The latest accusation is that Ökotárs has been engaged in illegal banking activities.

Veronika Móra, director of the Ökorárs Foundation, is being escorted by policemen to police headquarters

Veronika Móra, director of the Ökotárs Foundation, is being escorted by policemen to police headquarters

What are these alleged illegal banking activities? This latest charge involves a common practice of organizations that disburse subsidies or grants. It often happens that an NGO’s application is approved but that it takes a few months before they actually receive the money. These organizations are on a shoestring budget, and a couple of months of delay may mean that they cannot pay their employees. It is customary to give them a bridge loan. This is, for example, what both the Hungarian government and municipalities do when there is a delay of subsidies from Brussels. And this is what Ökotárs did in the past few years when some of the grants did not arrive on time. They used their own money for these small loans and charged a minimal interest rate. It is perfectly legal. This latest charge is just another pretext to eliminate all independent sources of funds for any civic activity not serving the interests of the government. Earlier this year KEHI was instructed to investigate and could find no evidence of fraud or any other financial crime, but the government is persistent.

Ökotárs was not the only victim. Police occupied the offices of Demokratikus Jogok Fejlesztésért Alapítvány (Demnet/Foundation for the Development of Democratic Rights). Apparently the police “ransacked both headquarters,” according to the Hungarian Free Press. The Hungarian Civil Liberties Union (TASZ) condemned today’s police raids against the Hungarian NGOs and criticized the passivity of the European Union. This afternoon they released an English-language statement, the final paragraph of which read:

In July, Prime Minister Orban made a speech in which he said Hungary is aiming to become an illiberal state. The EU Commission declined to comment on his words. Today’s actions prove again that the Orban government is challenging the core values and fundamental principles of the European Union. The HCLU agrees with Vidar Helgesen, the EU minister of Norway, who said, “When the Hungarian government is challenging these values it challenges the EU itself.”

Tonight about 500 people gathered in front of the offices of Ökotárs to protest the government’s latest attack on independent civic organizations.

The Orbán government’s behavior should remind us of the sustained attacks against civil society in Russia and elsewhere, for example, in Azerbaijan, as HCLU pointed out. Putin clamped down on nongovermental organizations during the winter of 2011-2012. Now, after the Ukrainian crisis, he instructed the Federal Security Office to be doubly vigilant when it comes to local groups working for “destructive” purposes. NGOs receiving financial support from abroad already have to register as foreign agents. Surely, Orbán does not want to go that far and be that obvious, but perhaps he can achieve the same goal through ostensibly legal means, like a charge of “fraudulent misuse of funds.”

We should follow this case very carefully, especially since it seems that Viktor Orbán’s latest speech at the Kötcse picnic was even more threatening than his talk in Tusnádfürdő/Băile Tușnad. We still know very little about the details of the speech since it was not open to the media, but as a Hungarian journalist friend of mine said, if the report that appeared in Magyar Hírlap is accurate, “this is the program of a dictator.” It is time to wake up!

The latest scandal: The Orbán government and the Norway Fund

On May 9 we learned that Norway had suspended €140 million of aid funds to Hungary. Most Hungarians, I’d wager to say, have no idea that, in addition to funds coming from the European Union, Hungary receives aid from Norway, Iceland, and Lichtenstein. In fact, Hungary is the second largest beneficiary, after Poland, of the so-called EEA and Norwegian Grants. The money that Hungary receives is the result of an agreement that Norway, Iceland, and Lichtenstein signed in 1994, the “Agreement on the European Economic Area,” which allowed these three non-EU states to join the common market of the European Union. Joining the large EU market was financially advantageous to these countries because within the EU their products were no longer subject to tariffs. In return, the three countries agreed to extend aid to less developed countries of the Union. After 2004, a large portion of the funds went to former Soviet-bloc countries. EEAUnder the arrangement Hungary will receive €153.3 million over the next few years. A large portion of the money that has already been received was under the supervision of the Hungarian government, while a smaller amount, the Norwegian Civic Fund, was handled by an NGO called Ökotárs Alapítvány (Hungarian Environmental Partnership Foundation). This organization was chosen by a Brussels-based office to be the lead NGO in disbursing funds within Hungary.

For reasons unknown, the Orbán government unilaterally decided to change the way it handled the aid received from the EEA and Norwegian Funds. As of January 1, the office that had been in charge of the distribution of the grants closed its doors and a private non-profit organization took over its duties.  This new organization has strong ties to Századvég, a Fidesz-related think tank.

The Norwegian government considered the move a breach of  the agreement the Hungarians signed with the Norwegian government, which supplies 97% of the funds. The Norwegians did not mince words. Vidar Helgesen, minister of EEA and EU Affairs who is also the chief-of-staff of the prime minister’s office, said that “Hungary’s actions in this matter are unacceptable” and added that “the Hungarian government has shown little willingness to find solutions that comply with the agreements entered into. We have therefore decided to suspend payments until this matter has been resolved.” He insisted that “the monitoring and implementation tasks in connection with the programs and funds under the EEA and Norway Grants scheme must be transferred back to the central government administration in Hungary, in line with the practice used in all the other beneficiary countries.” Up to now there is no sign that the Hungarian government is ready to oblige.

And that is not the only issue in dispute between Norway and Hungary. The Hungarians are also unhappy about Ökotárs Alapítvány’s administration of the Norwegian Civic Fund. According to Origofriction between the Orbán government and Norway over the Civic Fund goes back to 2012 when Tibor Navracsics complained to the Norwegian foreign minister about Ökotárs Alapítvány. He alleged that  this so-called independent organization has strong ties to LMP, the Hungarian green party, and therefore its distribution of funds favors the opposition forces.

The Hungarian government also complained about the process that selected Ökotárs as the lead NGO. Indeed, Ökotárs was the only organization that was found to be acceptable by the members of the jury, although originally there were seven applicants. Some of the groups had close ties to the government, while others were brand new creations with neither history nor reputation. Two were actually owned by the Hungarian state. The owners of two others were involved with CÖF, the government-created Civic Forum, the organization of the peace marches and sponsors of the pro-government election campaign. In any case, Navracsics’s complaint fell on deaf ears. The Norwegians were satisfied with Ökotárs.

Then, sometime after January 1, János Lázár again tried to convince the Norwegians to “renegotiate” the agreement on the basis of the new status quo. In addition, he wanted to take the Norwegian Civic Fund out of the hands of Ökotárs. The Norwegian government wasn’t impressed. So, Lázár began harassing Ökotárs Alapítvány. First, the government released nine names from the 50-60-member staff who, according to them, had had some kind of relationship with LMP, MSZP, or an anti-government university organization that was active for a short while in 2012. What they neglected to mention was that several employees had had close relations with Fidesz. Second, the government compiled a list of recipients who, in their opinion, should not have received any financial support from the Norwegian Fund, including the Roma Press Center, the Association of Liberal Youth, Women for Women against Violence, Transparency International, TASZ, the investigative journalism portal, Foundation for Democratic Youth, and two gay organizations that received small sums of money, Labris Lesbian Association and  the Rainbow Mission. Obviously, for the Orbán government, grants should go only to pro-government organizations. Critics should not get a penny as far as they are concerned.

Since neither Ökotárs Alapítvány nor the Norwegian government was intimidated, this morning the Hungarian government ratcheted up its campaign against the four NGOs that have helped Norway disburse the grants. It said that it would audit Ökotárs, the lead NGO. And today employees of the state audit department appeared at two partner organizations. At Autonómia Alapítvány, employees cooperated with the auditors but announced that they found the procedure illegal. The Hungarian State Audit Department does not have the right to investigate non-state funds, and clearly whatever small amounts of money these organizations received came from Norway. At the second organization, Demnet, the two men who showed up claimed that the investigation might take weeks. Demnet also put its objections in writing, claiming that the State Audit Department lacks jurisdiction.

Already on Friday Bernadett Szél, co-chair of LMP, wrote: “To János Lázár, the non-government sector is just another area to occupy. LMP rejects the charges.” And board member Attila Mong told Reuters that the government had set out to “cut that lifeline from the organizations it considers unfriendly, adding there were almost no other financial sources to replace these grants. Orbán’s message is clear: he wants his hands to be the only ones to feed NGOs. If you don’t want it, you will starve.”

This is where we stand now. Another unfinished chapter in the endless war of independence. Shameful, utterly shameful. Viktor Orbán and his henchmen have been systematically ruining what little remains of the reputation of Hungary.