Hungary hunts NGOs

By bne IntelliNews August 22, 2014

Kester Eddy in Budapest -


Gyorgyi Toth is used to frustration at work. As director of Nane, an NGO that offers support to Hungarian women suffering domestic violence, she constantly battles ingrained attitudes of a misogynistic society.

"What upsets us most is how the whole system is stacked against these women, how traumatising it all is. It's not enough that you've been misled and your trust [destroyed] by your abuser, but the system then so often blames the victim," she says. But for the five doughty staffers at Nane, the bad news is life has taken a turn for the worse also.

Since June, the tiny NGO has been under investigation by KEHI - Hungary's Government Control Office. The probe is part of a campaign waged by the government against what it claims is the politically-motivated distribution of EU-connected funding. A senior official accused Nane of being "left-leaning" and therefore, by implication, opposed to the nationalist-conservative Fidesz government of Prime Minister Viktor Orban. 

For Toth, dealing with KEHI - and the perception that the investigators are intent on finding some form of infraction - is more than unsettling. "I feel very much intimidated," she says.

The story is similar at up to 50 Hungarian NGOs, which are rattled in the face of an unprecedented wave of investigations. "I assume my phone is tapped and my emails are read," one NGO head told bne.

Foreign agents

Critics of Orban - who in July said Hungary should look to the likes of China and Russia as role models for building an "illiberal state" - have likened the campaign 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 deemed to engage in "political activity". They are now required to register as "foreign agents".

The Hungarian Civil Liberties Union (HCLU), also facing an investigation, has called what it terms the "attacks" on NGOs a sign of "the Putinist characteristics of the Hungarian government".

The common thread to this campaign are the so-called Norway-EEA grants which Norway, (along with Iceland and Liechtenstein) contributes to less-developed European Union members. Hungary is scheduled to receive €153m in total from these donors between 2009 - 2016. The bulk of this, some €120m, supports projects co-funded by the state.

Another segment, worth €13.5m, is set aside for NGO development. Those funds are managed not by a government agency, but by a consortium of NGOs, led by Okotars, the Hungarian Environmental Partnership Foundation.

Okotars and its partners were chosen by the donors in a tender for a distributor of grants to active NGOs. To date, €3.7m has been awarded to 128 organisations in the first phase of awards. This includes €118,000 to Nane - nearly one third of its annual operating budget.

However, relations between Norway and Budapest have soured through the year. At the end of 2013, the Hungarian government unilaterally changed the system for receiving its portion of the funds. It suddenly announced that henceforth monies should be sent to the Szechenyi Programme Office, a state-controlled company. In April, senior Fidesz officials claimed the distribution of the NGO funds was being ruled by an opposition political party.

In May, Norway suspended all EEA and Norway Grants disbursements for Hungary. Not only was it not consulted over the change of recipient for the governemnt funds, it said, but the anointed recipient is not part of the central administration, as laid down in the contract that regulates the grant programme. After months of negotiation, Budapest backed down, and at the end of July agreed that the funds can be paid into the prime minister's office (PMO).

Links to the left

In the meantime, the government had initiated the KEHI investigations. Janos Lazar, minister in charge of the PMO, initially named 13 NGOs, including Nane, the Hungarian Civil Liberties Union (HCLU), the local office of Transparency International, and the Roma Media Centre, as having "links to the left". Eventually, the government listed 58 NGOs as "problematic".

Okotars, as the main distributor of the Norway-EEA funds, finds itself at the centre of the row. It is accused of offering support to the small opposition green party LMP, as well as making "biased decisions" when distributing funds.

While admitting that some individuals, inevitably, have loose personal links with LMP, Okotars has never funded any political organisation, director Veronika Mora, insists to bne.

"Okotars has no political affiliations: it has never given money to LMP, or any political party," she claims. She says the government has been firing off accusations through compliant media, but has never sought direct contact. "The whole thing has been [conducted] through the media. We have never once been contacted by the PMO, either in writing, or in person, to talk about what the problems are," she says.

More fundamentally, the NGOs insist that KEHI, as an office set up to investigate financial impropriety at government institutions, has no right to audit any NGO which does not receive Hungarian public funds. Norway, Iceland and Liechtenstein have steadfastly supported the NGOs.

"In our opinion, KEHI's mandate is to audit how Hungarian public money is spent, not how we spend our money here," says Tove Skarstein, Norway's ambassador to Hungary. "The whole point is that these NGOs should not be controlled by [any] government." 

The donors insist that as a pre-condition for resuming transfers to the Hungarian state, the government must "immediately cancel" the KEHI investigations. However, Budapest is also standing firm, and says checking on the destination of the funds is a duty.

"The Norway Grants are to be regarded as public funds; they are not a private charity donation, but an official agreement between the EU and Norway, Iceland and Liechtenstein on how these countries can support the development of certain member states," a government spokesperson wrote to bne in an email. "All citizens of Hungary are entitled to this funding, and so it is of public interest to monitor how the resources have been used."

Until one side or the other gives in, the vast bulk of the €120m in funds allocated to the government - and the projects they would support - are frozen. Meanwhile, at Nane, Toth and her team continue to spend time answering KEHI questions instead of assisting traumatised victims of violence.

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