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The Uses and Misuses of Europe's "Strictest" Asset Declaration System

MerényiM // 2018.10.05.

Címkék: english orbán viktor vagyonnyilatkozat

We were the first one to report on the Prime Minister’s trip to a Videoton-Ludogorec Champion’s League game in Bulgaria on July 25. The trip was made on a 60 million dollar business jet, and Orbán’s Press Secretary, Bertalan Havasi asserted that it has not been paid from public funds. In September, however, watchdog organization and online newspaper Átlátszó had published pictures of Orbán deboarding the luxurious jet, which is used daily by Hungary’s richest oligarchs. As a reaction to the article, Havasi has said the following: "Viktor Orbán attends all games of MOL-VIDI FC. On these occasions, he is the guest of the football club’s owner [István Garancsi], and travels in the same way as all other guests of the club. This has always been the case and it will continue to be so. All of this does not cost a single forint for Hungarian tax payers."

 

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Hungarian Prime Minister Viktor Orbán talking to István Garancsi (photo: Viktor Veres / ZOOM)

 

A cikk magyar nyelven itt olvasható!

 

It will continue to be so, meaning that Orbán will continue to accept millions worth of favors from István Garancsi, who has won billions through public tenders, partly due to his friendship with Orbán. Apart from the football club, Garancsi owns several companies including an advertisement company and a construction company, and has been named the 19th richest person in Hungary. While there are several cases in which his companies appear to have been violating the law, criminal investigation against them is either extremely slow, or is non-existent. What’s more, the government has made several decisions in the past which benefiting Garancsi immensely. His football club, Videoton gets a new stadium from public money, and has received billions of forints from corporate taxes. His company, Market, was the one to build the Duna Arena (central venue of FINA 2017 Budapest), amidst lax legal regulations. He has made a fortune on online cash registers, was part of the MET-deal and the controversies around the Jeremie EU subsidy scheme, and received ownership and free use of billboards through the modifications of relevant regulations. It’s clear that Orbán, as Prime Minister, had a direct effect on these decisions, and, as a member of the Parliament, he also had the chance to vote for bills that gave preferential treatment to Garancsi. It’s safe to say that Orbán’s relationship with Garancsi has considerable influence on his work as a politician, and citizens are ought to know about the details.

Hungary currently has a system of asset declaration which aims to create transparency for accepting gifts and favors. According to the law on the National Assembly, MPs cannot accept any gifts or goods delivered free of charge which are offered to them as a result of their position, and whose value exceeds the amount of their monthly remuneration. Moreover, gifts and free goods with a value greater than one twelfth of their monthly remuneration have to be reported as part of the asset declaration. Not only citizens, but any responsible leader, thus Orbán as well, should demand heads of state institutions and their employees to maintain clear boundaries with business stakeholders. It’s no surprise that the code of ethics of government officials also disapproves of public officials accepting gifts that would make them indebted, that is, benefits which they would not be able to afford at a market price, from their own salaries (such as traveling on private jets). In January, 2018, Orbán declared a total savings of only 945,000 HUF (approx. 3000 EUR), making the luxury football game trip certainly indebting in its nature. The fact that he does not have to fear any repercussions for not reporting this gift proves that the system is seriously flawed.  

 

Double-talk: claiming that this is Europe’s strictest system is a lie

In the chapter on corruption and conflicts of interest, the Sargentini report mentions the 2015 GRECO report and its call for a code of ethics for MPs, which could complement existing regulations in situations where MPs are faced with a conflict of interest. Furthermore, according to the report, “MPs should also be obliged to report conflicts of interest which arise in an ad hoc manner and this should be accompanied by a more robust obligation to submit asset declarations. This should also be accompanied by provisions that allow for sanctions for submitting inaccurate asset declarations.”  Unfortunately, none of these measures have been implemented. The most recent case of luxury-travel is not the first one to signal that despite his modest savings, Orbán lives an extravagant life, and his ways of acquiring assets is not transparent. The Sargentini report also mentions that the current system of asset declaration can lead to unlawful situations, questioning the accountability of politicians, a must in any democracy based on the rule of law. After the report was passed with a ⅔ majority, a journalist asked Orbán about his asset declarations, and the system in general. In his response, Orbán called the Hungarian system exemplary, stating it is the strictest in Europe (based on a comparative study by Századvég, a pro-governmental research institute), which all Hungarian MPs have to comply with.

 

 

Although there is no definite proof about foreign bank accounts, or other assets, Orbán’s recent trip – which admittedly happens on a regular basis and was not accounted for in his personal declarations –  illustrates that the ‘strictest’ Hungarian declaration system is nothing but a massive myth, and it would be high time to make changes to it. It’s true that the declaration form is long and versatile but that does not mean that the electorate gets a true picture of how politicians are growing their wealth and what business interests they might have. We are talking about a system which lacks basic transparency, as MPs submit handwritten, often illegible forms, as opposed to machine-readable and searchable documents (we digitize these forms every year and build a database out of them). Still, the biggest problem is the lack of accountability, which creates perfect conditions for government officials and MPs to form corrupt networks with business shareholders, a prime characteristic of illiberal systems.

The biggest flaws of the current Hungarian asset declaration system are the following:

  • The form does not address positions held at civil society organizations or on boards.
  • MPs can pick and choose which parts of their asset declarations are made public – they can easily and legally hide anything they want in the declarations of their relatives, which are not publicly accessible.
  • Only member MPs of the Parliamentary Committee on Immunity, Incompatibility, Discipline and Mandate Control can have access to the asset declarations of relatives of MPs, and only in the case of an ongoing assets investigation. Such investigations are not being initiated in practice.
  • The aforementioned Committee is comprised of MPs, who lack the necessary knowledge, will, and capacity to be able to address the complex anomalies that occur.
  • MPs do not have to indicate any identification details for most of the assets (e.g. in the case of a property, they do not have to indicate an address or parcel number, or in the case of a loan, they do not have to disclose the date or amount of the transaction).
  • Declaration forms submitted prior to 2011 are not available online on any webpage maintained by the state.
  • The system does not address the ‘revolving door’ phenomenon, once their mandate is up, MPs do not have to submit a declaration form.
  • Only the pretense of acquisition needs to be reported (e.g. purchase, or gift), not the sources of the financial assets.
  • Sanctions are currently applied only if an MP fails to upload their declaration or fails to correct any anomalies that are identified, thus submitting flawed or incomplete declarations does not have major consequences.
  • Nowadays, wealth investigations against politicians are only launched if the Prosecution Office deem it necessary as part of an ongoing case. As the Prosecutor General is a personal ally of the government, such investigations are not launched.
  • The system extends beyond MPs, and has even more serious flaws. Mayors submit their declarations in sealed envelopes, which rarely see the light of day.

 

If Orbán receives the luxury trips as benefits, free of charge, then, under Hungarian law, they count as taxable income, but due to the anomalies of the legal regulations and the protective bubble of the parliamentary community, the trips will probably not even appear on Orbán’s next declaration form. Every once in a while you can fool foreign reporters by pretending that all is fine in Hungary, but behind the scenes there is a growing number of cases where political and business actors are in clear violation of the rule of law and yet are not held accountable. If Orbán is more equal than the rest of us, there is no point in trying to prove that rule of law still exists. If our leaders don’t see anything wrong with violating the law and accepting favors in the spirit of nepotism, then there’s no need for double-talk. No one expects the Prime Minister to travel abroad by bike, but democratic politicians do take formalities seriously, and abide by the law, trusting that they will be able to explain the favor of an old friend to their electorate. So the line should not be drawn at “whatever citizens find acceptable”, as Gergely Gulyás, Minister of the Prime Minister's Office, has said. It is a basic pre-requirement to the system that regulations are respected, as if it wasn’t for investigative journalists, no one would even know about the free trips. As long as there is no real transparency, declarations containing authentic information, and real inspection and sanctions regarding the wealth of MPs, we will continue to have low trust, hypocrisy, a legislature stripped of its independence which works to the advantage of a few, and well-hidden assets. And, as a counterpoint to all that, well-warranted criticism coming from the European Union.

The Prime Minister did not deny that he was traveling on flights funded by Garancsi. On Monday this week, in response to a question in parliament from the opposition Jobbik party MP Márton Gyöngyösi, Orbán said "I used to travel like this 30 years ago, and I will travel in the same fashion next week." (BBJ) So he did: the prime minister was in attendance at Stamford Bridge to watch his local team playing against Chelsea at Europe League.

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