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.”