This weekend, on April 6, the seventh free elections since the change of regime in 1989-1990 will be held in Hungary. But this election is different. Never before have the rules changed so much and so unilaterally as they did now.

Fidesz, the currently ruling centre-right party, won more than two-thirds of parliamentary seats in 2010. After winning the election with a landslide victory, Fidesz started to reshape the entire institutional framework, including the rewriting of the country’s constitution. They decreased the number of parliamentary seats from 386 to 199, and introduced a new election system that entails a single round balloting. Most of election experts argue that Fidesz used the tool of “gerrymandering,” i.e. redrawing the boundaries of constituencies to serve its own power interests. Simply put, the trick was that in several cases Fidesz split former constituencies with a leftist majority and merged fragments of them with voting districts of a right-leaning population.

The other big piece of election reregulation was rewriting the law on campaign financing, which entered into effect at the beginning of this year. Transparency International Hungary (TI-H) has been criticizing the country’s party and campaign financing system for many years, pointing out that the regulation is ineffectual in preventing obscure relationships from forming between political parties and certain business groups. Generally speaking, grey and black money arrives to the parties, and neither its source, nor its spending is transparent. Campaign and party financing has evolved as one of the major corruption risks.

Unfortunately, the law applicable to campaign financing, similar to previous regulation, is not suitable for eliminating campaign-related corruption, despite its publicly declared aim to do so and some minor achievements. An incomprehensible element of the regulation on campaign financing is that while individual constituency candidates – rightly – have to account for all public finances they receive to the last forint, and if they fail to win a at least two per cent of votes casted in their constituency repay this money in full, political parties have no such obligation. As TI warned several times in the past, there is a possibility that several small parties will only participate in the election to gain access to the generous allowance provided by the state. In addition, the Hungarian Court of Auditors does not investigate into the spending of unsuccessful ‘sham parties’ ex officio, but only in reported cases. Moreover, such an audit does not have the ambition to compare parties’ financial statements to reality and examine questionable transactions. Among the few positive elements of the new legislation on campaigning, it is worth mentioning that the rates of political advertisements in the print media are made public.

This is the second time (election) that TI-H, with partner organizations, is monitoring the campaign spending of the parties in the framework of our kepmutatas.hu (in English: hypocrisy.hu) project. The main results of this can be seen on the website, and as it is in visual form, the key findings can be followed by non-Hungarians as well.  We performed the same task in 2010, when we concluded that the two biggest parties, the Hungarian Socialist Party (MSZP) and Fidesz, both spent approximately three times more than what the law at that time would have allowed.

In the current campaign our findings show different results. The election campaign is not yet over but as of the end of February (so far this is latest data), Fidesz spent more than 2 billion HUF (close to 7 million euros), the left-wing alliance ‘Kormányváltás’ (Change of government) 680 million HUF (more than 2.3 million euros), while the right-extreme Jobbik spent 650 million HUF (2.2 million euros) and the green, anti-establishment party, the ‘Lehet Más a Politika’ (Politics can be different) 310 million forints (slightly more than 1 million euro). The spending limit set by law is HUF 1 billion (3.3 million euros), of which 700 million HUF (2.3 million euros) may come from public sources. TI-H’s program for assessing campaign spending looks at all forms of campaigning, by monitoring public billboards, media advertisements, direct marketing tools (letters by mail, text messages, phone calls, personal contact, flyers), and also party events and conventions. We have also calculated the expenditures of parties on their campaign team, opinion polls, and promotional items.

The new campaign financing law fails to address risks such as the outsourcing of a campaign. What does this mean exactly? In our ‘kepmutatas.hu’ research we have included the spending of a government organized civil society organization, CÖF (‘Civil Összefogás Fórum’ – Civil Alliance Forum), which blatantly campaigns for Fidesz. Furthermore, the government itself sponsors Fidesz’s campaign. The government gave Fidesz a gift of 540 million forints, as this is how much the ‘Hungary is performing better’ campaign and the campaign advertising the utility price cuts that lay the foundations of the governing party’s election campaign have cost since last November. These two items, CÖF’s and the government’s bill, constitute roughly half of Fidesz’s spending. TI-H has been criticized by Fidesz politicians for using this methodology, and pro-government press has said that TI-H has been involved in the campaign on the side of the opposition. That, of course, is not true. For us there has been no double standard – we have pointed out the shortcomings of regulations and the hypocrisy of party financing during Socialist governments, too.

And yes, this time as well we believe that our decision to include the outsourced spending is supported not only by our methodology but also by common sense. The CÖF, this Fidesz-clone CSO, is not subject to any control as a political organization. To be fair, we also have to note that government campaign advertisements were a frequent tool of previous governments, too.

Political advertisements in electronic media are free of charge, a step forward that TI would welcome in theory, but the way this regulation is put into practice negates all its advantages. Commercial TV channels do not want to deal with the advertisements of political parties, and in addition, public media is heavily biased towards the government parties. At any rate, due to tailor-made election regulations and campaign financing that disproportionately favors Fidesz so as it remains in power, TI-H states that the forthcoming election will be free but, in a number of points, not fair.

Commissioned by TI, a few weeks ago the polling agency Psyma assessed public attitudes concerning the campaign. The findings show that only 8% (!) of people expect a legally clean campaign. According to the poll, a majority of the public thinks that both the left-wing alliance (62%) and Fidesz (55%) use funds from corrupt sources in their campaign.

The regulation and practice of campaign financing leads us to a wider problem of Hungarian managed democracy. The current government used its power to eliminate almost all checks and balances in the state sector that could constrain its power. It also took measures to centralize politics and the economy. The system has become close to a state-capitalist one. Rent-seeking, i.e. making money through political connections rather than market performance, is spreading in Hungary. These tendencies are worrisome for those who think, in accordance with the economic and political literature on the topic, that the centralization of too much power not only hurts democracy but also, in the longer term, throws obstacles in the way of growth, competitiveness and prosperity.

That is why it would be crucial for the sake of Hungarian democracy and the Hungarian economy if the next government, whoever it should be, would find the path back to western-style liberal democracy, in which the equilibrium of power and checks and balances is restored. Should that not be that case, fairness of even the next elections would be at high risk.

József Péter MARTIN
Executive Director of TI Hungary