In 2021’s first semester, TI-Hungary commenced numerous freedom of information cases related to the use of EU funds and/or to the coronavirus pandemic in Hungary. In the first part of the paper we present the actual cases, while in the second part we draw conclusions of our experiences. 

This paper was prepared within the framework of the pilot project‘Integrity Pacts – Civil Control Mechanism for Safeguarding EU Funds’ funded by the European Commission. 

In 2021’s first semester, TI-Hungary commenced numerous freedom of information cases related to the use of EU funds and/or to the coronavirus pandemic in Hungary. In the first part of the paper we present the actual cases, while in the second part we draw conclusions of our experiences. 

The cases

 I.1. MP Simonka and his village called Pusztaottlaka 

TI-HU asked for information relating to EU-funded projects to be implemented in a rural area settlement called ‘Pusztaottlaka’, whose local strongman is government MP György Simonka, indicted for supposed subsidy fraud, embezzlement and graft (case heard by criminal court of first instance). EU-funded projects implemented in this village clearly failed to achieve project goals, and our suspicion is that the managing authority (Hungary’s Finance Ministry) may have intentionally failed to control and sanction irregularities, which enabled prodigal spending at the expense of EU’s funds. To substantiate our suspicion, we asked for the documents relating to the control and audit of these projects, but the government refused to reveal these documents, therefore we turned to the court and won this case in both the court’s first and second instance. The Managing Authority, i.e. the defendant (Hungary’s Finance Ministry) shared the information sought. It turned out that TI-HU was right anticipating that the managing authority failed to control and sanction irregularities, which enabled prodigal spending at the expense of EU’s funds. This was extensively reported in the press. 

I.2. MP Simonka and the CAP funds  

MP Simonka’s criminal behaviour also included lobbying for the revocation of repayment and correction orders issued by Hungarian authorities charged with the supervision of CAP funds. To find out if the rumour was true that Mr Simonka successfully lobbied for the necessary legal amendments, we asked the Treasury (to which Hungary’s former CAP supervisory authority merged) to open up information related to revocation of repayment orders. The treasury refused our FOI-request, therefore we turned to the lawcourt, and won in both the first and the second instance of the court. The treasury handed out the information and it came to light that most of the beneficiaries who applied for the revocation belonged to Mr Simonka’s interest group.  

I.3. The procurement of Russian and Chinese vaccines against COVID 

Hungary’s government procured large quantities of COVID-vaccines from Russian and Chinese makers, but the documents to testify these vaccines efficiency remained inaccessible, a reason for TI-Hungary to launch a FOI-case. We asked the domestic medical agency to open up the documents, but the agency wrongfully prolonged the response deadline to 90 days. TI-Hungary started a court litigation and won in the final instance. The government failed to promptly serve the court’s binding judgement; therefore TI-HU reported the government to the police for contempt of court. At the end we obtained the information, and it became evident that Hungary’s government was well aware of the lacking efficiency of the Chinese vaccine. The press reported extensively about this case, which was also followed by independent MP and anticorruption crusader Mr Ákos Hadházy.   

I.4. Support of the tourism sector 

On the pretext of helping the tourism sector because of the coronavirus pandemic, Hungary’s gov’t employs undisputedly distortive granting practices in the country’s tourism industry, giving prominence to cronies with an easy access to public subsidies. TI-HU suspects that gov’t grants are discretionarily designed and disbursed. To find out if we are right or wrong, we employed FOI-tools, but the tourism agency denied our questions. We turned to the court and are now waiting for the first hearing. However, it is clear from the tourism agency’s response that there was no open and competitive application, instead, the tourism agency gave grants to those market players who asked for the grants, giving rise to the suspicion that the playing field was unlevel. We also suspect – though not clear, since the allocated budget is not transparent – that EU funds are also involved. Out of altogether three FOI-cases launched to uncover details of the government’s shady granting practices in the tourism domain, TI-HU won two processes in the first instance, and a third process is waiting for the deliberation of the court’s first instance. In these cases, we are far from knowing the information sought, but still, there has been progress. It has to be noted that apart from the one case commenced in 2021’s first semester, TI-HU launched two additional FOI-requests during the fall of 2021, both aiming to uncover questionable grants. One of the two cases relates to grants allocated to a leading member of the lobby group called ‘Balaton-circle’, who, besides being a grantee of the Hungarian tourism agency, also acts as the donor’s adviser, which makes this deal suspicious of conflict of interest. 

I.5. 35-year long highway concessions 

TI-HU spotted a disquieting public call to concede the maintenance and development of the country’s highway and freeway grid to a concessionaire for a period of 35 years, and this call seems to go against EU and national legal requirements. According to the law, specific calculations need to substantiate why the concession period should be longer than 5 years. To decide if the gov’t acts wrongfully, TI-HU asked the government’s concessions bureau to open up these specific calculations, but this bureau refused to do so, therefore TI-HU litigates the bureau in court. Additionally, we also turned to the Hungarian Public Procurement Authority to initiate an official remedy procedure for establishing the infringement of the national provisions, and to the European Commission, because we believe that the planned concession infringes specific provisions of Directive 2014/23/EU on concessions. Also, this case relates to our monitored M6 Motorway project, since M6 Motorway – along with M5 Motorway – are the only two motorways that are operated by a Concessionaire at present, which the government deems as a bad practice, and they want to reorganise this concession construction, but now for the whole network. As regards the FOI-case commenced in relation to the government’s planned 35-year freeway concession, TI-HU won in the court’s first and second instance, at the moment we are waiting for the defendant to comply with the judgement. 

I.6. Procurement of ventilators for treating COVID patients 

TI-HU started two FOI-cases related to the purchase of ventilators during the pandemic’s first wave. As a result of this purchase, Hungary possesses now some 17 thousand ventilators in the value of roughly 1 billion euro. With this, Hungary spent by far the most on ventilators, resulting from overpriced purchase processes. The government announced its intention to resell ventilators in excess of the amount needed. The Human Resources Ministry is in charge of the resell process, and TI-HU asked for the details of this process. As the government denied answering, TI-HU turned to the court, the first hearing is scheduled on March 1.  

A different aspect of the shady ventilator business relates to a Malaysian supplier, who sold over 6500 pieces of ventilators to Hungary, at an extremely high price. The government keeps the details of this business secretly, therefore no one knows who selected this supplier and how did the government of Hungary examined if this supplier met transparency requirements. This is most disturbing, as there is credible information that this supplier, called Datuk Vinod Sekhar is a crook, and there have been criminal investigations against him in Malaysia. TI-HU asked the government to reveal the details, but the gov’t failed to do so. The court case is on, the second hearing by the first instance court is scheduled on March 30. 

Lessons learnt

Considering TI-HU’s track record of how FOI tools can be best employed to uncover wrongdoing and to make the life of those involved in mismanagement harder, we can conclude that the very FOI-cases commenced in the framework of this project underline the necessity of civil society’s dedication to making government spending and public decisions more accountable. We have positively learned out of these litigations that the Hungarian government is exploiting its overwhelming influence over state control institutions to help member of its clientele enrich at the expense of public assets. This not only entails the questionable distribution of EU-funding, but also the hazy or overtly lacking oversight of the use of funds, and it ultimately results in impunity. The cases related to MP Simonka indicate that oversight institutions, incl. the managing authorities and the audit authority are aware of irregularities, which take place at daylight and beneficiaries of EU-funding only run the risk of such irregularities once they are politically outwit. This means that the oversight institutions are unable or unwilling to do their job if politically ponderous persons are believed to be involved in questionable dealings. And even in cases where a ‘no go command’ is lifted and law enforcement may perform its tasks, the recovery of mismanaged assets is just minimal. This makes us conclude that the efficiency of domestic control of EU-funding is far below expectations, to put it very mildly.  

Another moral of our efforts relates to spending explained to better fight the Covid-19 pandemic. After almost two years of litigating the government to obtain basic information, we are safe to say that Hungary’s incumbent leadership could not resist the temptation of greed and the opportunity offered by the state of emergency to conclude suspicious transactions below the radar thanks to extensive secrecy and circumvention or suspension of transparency requirements. The shady procurement of ventilators and vaccines outline the government’s readiness to put the life and health of millions of Hungarians to clear and present risk, a price no government should be allowed to pay at the expense of taxpayers’ money just to further enrich its cronies. The Hungarian government simply overstepped this dire straight and enabled loyalists to pocket some EUR 30 million in extra profits due to obscurely designed purchase contracts and through the involvement of intermediaries, whose only role was to land the lucre. 

Although we could not make this practice come to end, by publicly exposing wrongdoing and by naming those responsible for it, we prevent the government from successfully denying the facts and the commissions of these acts.