Hungarian government forced to release information on sports sponsorship programme

Hungarian government forced to release information on sports sponsorship programme
By Levente Szilagyi in Budapest October 25, 2017

Hungary's highest court, the Kuria, dealt a blow to the cabinet on October 25 when it upheld an earlier ruling that the government must release data related to a programme on corporate sponsorship of sports clubs and cultural institutions, commonly known as TAO.

Despite earlier court rulings, the government has blocked the publication of the data and even adopted legislation classifying documents relating to TAO as tax secrets. The government ministries now have two weeks to make the data of the last five years public.

The cabinet of Viktor Orban introduced a subsidy system that allows tax deductions for corporate sponsorship of sport clubs in 2011. The scheme was later extended to cultural institutions. Last year some HUF100bn (€325mn) of public money from corporate taxes went to to sporting organisations.

The Kuria's ruling will make it compulsory to release information on all subsidies given to football, water polo, basketball, handball and ice hockey associations between 2011 and 2016, broken down by company. There is vital public interest related to the transparent use of public funds, the court reasoned.

In October 2016, the parliament passed a bill that classified details of donations and related tax rebates as secrets. The move came after scandals revolving around the use of public funds by Magyar Nemzeti Bank foundations but it was also aimed at blocking the release of TAO subsidies, NGOs said.

The Kuria also said that disclosure of public data enjoys preference over the tax secrecy and this can not become an impediment to the publication of the figures.

Orban and his government have consistently denied that redirecting corporate taxes to sports clubs constitutes public money, as it is the choice of individual companies.

Civil groups, however, have long held that data regarding the TAO scheme should be made public because it is in the public’s interest to know precisely which corporations are transferring how much to which sports clubs.

Miklos Ligeti, head of Transparency International Magyarorszag, hailed the latest Kuria ruling. The data on corporate funding of sport clubs will reveal great disparities in financing and shed light on how prone the system is to corruption. “After receiving the documents, we can identify whether there are correlation to the size of TAO-contribution by companies to their success in public tenders,” he said.

Over the past six years, corporations have directed a robust HUF415bn to sporting associations. The football academy of Felcsut, in Orban’s home village, has been a major beneficiary of the programme. It has been the top recipient of funding, receiving HUF3bn last year, the largest amount received by any sport club since the programme was launched.