Tag Archives: András Baka

Financing of Hungarian sports: court rules it must be transparent

Even small victories can lift anti-Orbán hearts nowadays in Hungary. Thanks to the recent decision of the Kúria, Hungary’s highest judicial body, Viktor Orbán was rendered a defeat that must have hit him hard. At risk is what he considers to be one of his greatest achievements, the Felcsút Football Academy.

Transparency International spent a considerable amount of time and energy investigating the government’s lavish support of sports and came to the conclusion that the sports financing system the Orbán government established is rotten to the core. In the course of its investigation Transparency International also ascertained that the “absolute winner of the whole system is the village of Felcsút and its football club.” Felcsút has become the symbol of everything that is wrong in Viktor Orbán’s Hungary. It is a village of 2,000 people with one of the most lavish football stadiums, which can seat 4,500. The club uses all sorts of tricks to entice people to attend the club’s games, usually to no avail. The stadium is practically empty most of the time. In fact, according to those in the know, Hungarian football is dead, and the incredible amount of money that was poured into the game was an utter waste. Hungary’s FIFA standing is the same as it was before.

Over the years people have tried to find out how much money was being spent on sports, mostly football. But the system is intentionally complicated in order to hide the exact amount that comes from two main sources: direct grants allocated for sports in the budget and something called Társasági Adókedvezmény/TAO (Corporation Tax Allowance), introduced in 2011. Corporations can get a tax break if they support one or more of five sports: football, handball, basketball, water polo, and ice hockey. Money allocated to support sports is considered to be part of the tax owed. Thus, all money that is donated to these sports is a direct loss to the central budget. Since 2011, according to the latest estimate, 330 billion forints of corporate tax money was diverted to sports organizations. Or, put another, more shocking way, in the last six years the Hungarian state has given up one out of every nine forints in tax revenue.

From this money 128 billion went to football clubs and 86 billion for handball, while the rest was shared by basketball, water polo, and hockey. Viktor Orbán has been insisting for years that TAO is not public money and therefore no one has the right to learn about the sponsors, the recipients, and the amount of the money donated.

Interest in Hungarian football–Debrecen Stadium, which can seat 20,000. Cost €40 million

Transparency International, being convinced that the tax allowance is public money, asked the ministry of human resources for their allocation figures, which was denied. Transparency at that point sued the ministry. In the first instance, Transparency lost the case. The decision was based on tax secrecy. In addition, the judge didn’t consider the requested data to be of public interest. On appeal, however, the decision was reversed. Tax secrecy as a reason for denying access to the information was discarded, and the court ruled that the TAO monies are, after all, considered to be public funds. The ministry then turned to the Kúria, and on October 25, 2017 the decision of the appellate court was upheld.

Concurrently with Transparency International’s suit against the ministry of human resources, Demokratikus Koalíció (DK) sued Viktor Orbán’s Academy in Felcsút for the release of all contracts for jobs that were financed by TAO money. Felcsút apparently received about 14 billion TAO forints in the last six years. In July 2016 the Székesfehérvár Court ruled in DK’s favor, but Felcsút Academy had no intention of obliging and appealed. In February 2017 the Budapest Appellate Court also ruled in DK’s favor, but for a different reason from the Székesfehérvár Court. While the lower court considered TAO to be public money, the appellate court based its verdict on the non-profit status of Felcsút Academy. Felcsút Academy was obliged to turn over all documents relating to TAO funds within 15 days. Felcsút Academy again appealed the verdict, and thus the case ended up in the Kúria for a final decision. On November 15 the Kúria ruled that Felcsút must provide details of how they spent the enormous amounts of “public” money. The verdict could have been predicted because a month earlier, in connection with the Transparency International case, the Kúria had already declared TAO funds to be a public resource.

Index described the verdict as “the final and humiliating defeat of Orbán’s football academy.” János Lázár’s reaction a day later amply showed what kind of a country Hungary has become in the last six or seven years. During Lázár’s usual press conference on Thursday, when asked his opinion of the Kúria’s decision, he said: “There is a judge in this country who is very angry with Hungary’s government and Fidesz. His name is András Baka. Because of his changed official status, he has been greatly offended, and for some strange reason all TAO cases end up on his desk. I wouldn’t want to suppose that any bias would have influenced the judge, who on numerous occasions publicly criticized Fidesz and the government.”

Let’s stop here for a moment and go back to 2011, when the Hungarian Supreme Court became the Kúria. The chief justice at the time was András Baka who, prior to his appointment in 2008, had been a judge at the European Court of Justice for Human Rights for 17 years. Although he was considered to be a conservative judge, he became worried about Viktor Orbán’s so-called judicial reforms. He objected, for example, to the forced early retirement of judges, which gave the government a free hand to fill about 300 positions that became vacant as a result of the new law on retirement. Orbán desperately wanted to get rid of Baka and eventually came up with a good excuse. Baka hadn’t been a judge in Hungary for five years. His 17 years with the European Court of Justice were not considered relevant. Baka turned to the European Court of Human Rights and eventually was awarded about 100,000 euros, which naturally the Hungarian government, or to be precise Hungarian taxpayers, had to cough up. Baka couldn’t return to his old post, which had been filled by someone else, but he was reinstated, I’m sure grudgingly, as one of the leading judges in the Kúria.

The Kúria’s answer to Lázár was brief and to the point. They will not comment on politicians’ statements concerning their activities, but the spokesman explained that the assignment of cases is determined a year ahead and given to judges according to their professional specialties.

Unfortunately, I’m not at all sure that this is the end of the story because János Lázár intimated at the press conference that it was time “to make order” as far as TAO is concerned. To make order to me means that they will most likely come up with some modification to the law that would prevent the public from learning where that incredible amount of money has gone.

November 17, 2017

More serious problems with the new Hungarian constitution

I promise this is the last post on the constitution. Yes, I know, I spent too much time on the “national creed” but I don’t think that it was a total waste of time. After all, beside the historical inaccuracies there are a number of provisions that might have far-reaching implications.

I read quite a few analyses of the draft that minimized the significance of certain changes introduced in the main text of this new constitution. The first word usually is “thank God at least it doesn’t completely undo the power structure of the Third Republic.” Thanks for small favors. After all, even Fidesz cannot come up with a constitution that openly admits that Hungary is no longer a democratic country but an autocracy. That much honesty we can’t expect from these guys.

However, a careful reading of the text reveals that a substantial narrowing of the democratic structure is being attempted here. The subtle and not so subtle changes in wording aim at ensuring Fidesz’s political influence in the future, perhaps for decades. Even if Fidesz loses the next elections the rewritten constitution will help Viktor Orbán and his cohorts make the work of the next government well nigh impossible. In addition, Fidesz seems to want to reduce social services to a minimum and to cut the remaining checks and balances even further.

Here are some of the more worrisome new provisions. Let’s start with the constitutional court. Although Gergely Gulyás and János Lázár often claimed that the competence of the court will be restored in the new constitution, that is not the case. The court will not be able to rule on financial matters. Also, there will be a change in the election process and the tenure of the chief justice. Today the chief justice is elected by his fellow justices for a period of three years. According to the new constitution he will be elected by parliament for a twelve-year term. One must keep in mind that the frequent reference to the Hungarian parliament as the best guarantee of the present regime’s democratic practices is a laugh. After all, the Fidesz-KDNP members of parliament were hand-picked by Viktor Orbán himself, and not one of them would dare go against the chief’s will. So, basically, it depends on Viktor Orbán alone who will be elected to what position.

At the moment Péter Paczolay is the chief justice; he was elected in 2008. Thus his term as chief justice expires this year. So, let’s assume that “parliament” elects István Stumpf, a member of the first Orbán government. He will be the chief justice until 2023.

I wrote earlier that the Supreme Court (Legfelsőbb Bíróság) will be replaced by the traditional court known as the Kúria. That may and most likely will mean the replacement of András Baka as head of the Supreme Court. András Baka was nominated by László Sólyom and Baka is not exactly the favorite of the current government. Especially since he had grave reservations about the nullification of crimes committed during the 2006 September-October events.

The new constitution also extends the tenure of the chairman of the national bank. Currently it is six years but if the constitution is accepted, and why wouldn’t it be, the new bank chairman will be able to serve for nine years. András Simor’s tenure will expire in 2013–that is, if he has enough perseverance–and therefore a Fidesz man can fill the position until 2022.

The positions of chief prosecutor and head of the accounting office were taken care of earlier. Péter Polt, a key member of what Bálint Magyar (SZDSZ) called in a 2001 article the “szervezett felvilág” (organized upperworld instead of underworld), may remain in his position until he reaches the age of seventy (2025) because his possible successor must also be elected by a two-thirds majority. The head of the accounting office, László Domokos, received a twelve-year term. He will be there until 2022. In brief, if we start counting with the beginning of the current Fidesz government these key posts will remain in Fidesz hands through three election cycles.

The role of the “annoying” ombudsmen will be seriously curtailed. Currently there are four ombudsmen (human rights, privacy issues, minority issues, and environmental issues). From here on there will be only one ombudsman who may name a certain number of deputies. Máté Szabó (human rights) most likely will be removed because he is an especially bothersome fellow. Considering that the Hungarian government in its role as rotating president of the European Union made solving the Roma issue an important goal, its elimination of the position of ombudsman for minorities, currently held by a man of Gypsy origins, is interesting to say the least. I might also note that while the constitution is defending sign language, minority languages are not mentioned in the document.

There are serious attempts in the constitution to eliminate elements of the welfare state. For example, here are a couple of important changes. The current constitution declares that “the citizens of the Hungarian Republic have the right to social security.” The new draft states that “Hungary is endeavoring to provide social security to all its citizens.” As for pensions for citizens, the current constitution talks about “the right to provisions in old age” while the new one states that “Hungary contributes to the provision of livelihood in old age.” That explains an item in the new constitution: “adult children are obliged to provide for parents in need.”

Although most people thought that the hair-raising idea of extra votes on behalf of children under the age of eighteen will not be included in the draft, this crazy notion made its appearance after all. Originally, it was the idea of József Szájer (MEP) who allegedly drafted the new constitution on his iPad, but by now this notion has gained a certain respectability within Fidesz circles. For example, yesterday Lajos Kósa, one of the vice chairmen of the party, gave an interview to the far-right Magyar Hírlap in which in his usual blunt way he announced that the old folks who are the most conscientious voters shouldn’t be the ones who decide the future. I guess, after all, they will be dead in ten years or so and their children and grandchildren will be stranded with their choices. That’s why young and middle-aged people should have extra votes. I would like to remind Mr. Kósa what happened to Fidesz in 1993-94 when Viktor Orbán said something similar about those old folks. Within a few months, Fidesz moved from a leading position to having the smallest parliamentary delegation in the House.

I’m sure that a more careful comparison of the two constitutions will reveal additional substantive provisions that might change the course of Hungary’s future. But for the time being there is enough here to ponder on.

March 13, 2011