Hungary to charge foreign-backed NGO in latest spat with West

By bne IntelliNews October 24, 2014

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Hungary announced on October 23 that it is now ready to press criminal charges against the distributor of Norwegian NGO funds. The move is the latest in a series apparently designed to enrage the EU and US, in a bid to show that Budapest will follow its own path. 

Budapest's government control office KEHI said in a statement to newswire MTI that its lengthy probe into the Norway-funded NGOs has revealed "irregularities" in 61 of 63 projects. KEHI announced it will now submit a criminal report against Okotars Foundation, which is the main disburser of the money, "on suspicion of mismanagement, budget fraud, forgery of private documents and unauthorised financial activity". 

The investigators were joined by senior government officials. The powerful head of the PM's office, Janos Lazar, who has been driving the case, told a press conference that Okotars "failed to do its job" and violated Hungarian laws. He also lamented that the NGO had "abused the trust of the Norwegian government". 

Hungary has been investigating Otakars since the  government blocked the funds in the spring, claiming the distribution was biased on political lines and went to "left leaning" causes. The case has provoked anger in Oslo, Brussels and Washington, which are wary of Prime Minister Viktor Orban's claim to be building an "illiberal" democracy modelled on the likes of Russia and China. 

In July, Orban called the foreign-funded NGOs "paid foreign activists". That invited comparisons to a crackdown on NGOs by Moscow last year. The Kremlin launched inspections at thousands of groups to identify those that receive foreign funding and engage in "political activity". They are now required to register as "foreign agents". That's hardly a fashionable comparison right now in Brussels or Washington. 


However, that appears to be the point. The ruling Fidesz government has spent years bickering with the EU, but since a meeting last month between Orban and Alexei Miller, CEO of Russian gas giant Gazprom, Budapest looks to be going out of its way to enrage Brussels and Washington. 

Following that meeting on September 22, Hungary promptly halted reverse gas supplies to Ukraine, which is struggling to agree a deal with the Russian state giant following a cut-off in June. Meanwhile, Gazprom agreed to raise supplies to Hungarian storage facilities in what appears a classic play by Moscow to pick off individual EU states from bloc policy. 

Hungary now appears to be bolting from the stable, as relations with the West nosedive, and Budapest has been hit for its digression. The case against the NGO's is seen as symbolic of the "intimidation of civil society," as expressed by US President Obama. Then a scandal erupted in mid-October when Washington announced it had banned six government officials from entering the US due to corruption concerns. It is the only reported instance of a travel ban placed on a Nato ally.

Meanwhile, EU officials and parliamentarians have raised discussion over the state of democracy in Hungary under Orban, and the country's candidate to the new European Commission was rejected earlier this month because of concern over his role in introducing controversial changes to judicial, media and human rights legislation in Hungary.

However, Orban has turned criticism from outside Hungary into a foundation of his strong mandate at home, where Fidesz won a second constitutional majority in April. The PM now appears ready to go toe to toe with the West. 

A day ahead of announcing the charges against the NGOs, a senior official said Hungary is preparing legislation that would allow it to bypass EU oversight on construction of its section of the South Stream gas pipeline. The EU has ordered all work halted on the giant scheme to bring more Russian gas into the bloc.

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