Hungarian taxpayers’ millions for football, land and a tractor
Anuška Delić, Matej Zwitter, Maja Čakarić
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In the last five years the neighboring government led by Prime Minister Viktor Orbán has significantly increased its funding of Hungarian national minority’s activities abroad. BGA’s financing data and reports, analyzed by a regional group of journalists, reveal that the grant procedures lack transparency.
Janez Janša and Viktor Orbán. Photo: Government of Hungary.
In 2015, the Hungarian Self-Governing National Community in Pomurje, a key body of this national minority in Slovenia, applied to a call by the Bethlen Gábor Fund to obtain 17,5 million Hungarian forints (then around € 50 thousand).
MMÖNK planned to buy a smaller property where it would establish a model farm managed in close contact with nature. Its proposal was approved.
In a 2016 report on this spending the MMÖNK council president Ferenc Horváth explained that they were unable to find a suitable property for the agreed amount, so they changed the project.
Instead of the farm MMÖNK bought a tractor for € 48.999,99 to be used on the future farm, and commissioned an economic development strategy for the minority area. It was produced by the Hungarian research institute HÉTFA for just under € 6,700.
The report is full of hand-written notes of a BGA reviewer, many parts are underlined, and in some places ambiguities are accompanied by exclamation marks. A cluster of three adorns a MMÖNK explanation about the tractor: it had been paid for but not yet been delivered, it says.
The whereabouts of the tractor have been unconfirmed until July 2020 when MMÖNK, with consent of the BGA, leased it free of charge to a horse association in Lendava.
MMÖNK told us in an email that the farm they intended to buy was no longer available for sale. The theractor was purchased »as a part of a model farm project which is in the implementation phase«.
But the tractor was on the premises of the supplier from February 2016 until July last year.
The tractor was last summer leased free of charge to a horse association in Lendava. Photo: mmonkpmsns/facebook
In 2018, MMÖNK obtained 150 million forints (then around € 460 thousand) from the fund to establish a bio-friendly bilingual kindergarten for children in Radmožanci (Radamos) in the municipality of Lendava (Lendva).
Most of the money under the 2018 call was earmarked for the exterior and interior renovation of the facility and child-friendly landscaping. MMÖNK needed 40 million forints (just under € 125 thousand) to arrange a small outdoor petting zoo, and an indoor zoo-café with »gentle mammals and birds«.
Initially, the daycare center was intended to be finished by the end of 2019, instead the BGA approved a change to the project and increased its support to 216 million forints (around € 654 thousand).
The center was far from completed. Construction works didn’t begin until November 2020 when an old family house that stood on the site was demolished. This January fieldworks continued but the project isn’t expected to be completed before September 2021.
These reports and many others, together with BGA’s data from decisions to allocate grants between 2011 and 2020 and contracts paid out between 2011 and 2019, were analyzed by journalists of a regional investigative journalism project Hungarian Money, Orbán’s Control. Reporters also requested copies of dozens of final project reports via freedom of information requests but the fund only provided approved documentation.
BGA finances activities of the Hungarian national minority abroad through public calls that demand proposals, supporting documents, clear financial plans and expenditure reporting. But once the projects have run their course they don’t appear to have been vigorously audited.
It is also not clear to what extent the tender procedures include safeguards against potential misuse of Hungarian public funds, conflict of interest or corruption.
Finally, the financing data published by the fund on its website is nearly impossible to reconcile between awarded grants and reports on actual contract payments. There is no central, user-friendly data repository. Instead, the public has to rely on pages upon pages of pdf formatted files which are often not computer-readable, and endless data tables and menus from two sites and their subsites.
BGA did not answer questions of the regional group of journalists, which also concerned the spending safeguards, data and reporting issues.
Pivotal five years
From 2011 to 2020, the volume of BGA grant allocations for the purposes of the Hungarian national minority had risen substantially, from a total of at least € 13,6 million in 2011 to more than € 368 million in 2019.
The onset of the Covid-19 pandemic did not cut this budget by a lot. Last year the fund approved at least € 316,6 million worth of projects.
These totals concern only decisions approved by BGA to allocate funding. But in comparison with data on actually paid contracts in this period, the total of payments – not counting 2020 due to lack of relevant data – is almost 38 percent lower. Reporters were unable to find a verifiable explanation for this.
Increase in BGA funding was also reflected in data on minority financing in Slovenia: in 2011 the fund approved at least € 62 thousand for this community, and in 2019 more than € 4,1 million. Additionally, the fund approved donations of small value to organizations and individuals for a total of at least € 720 thousand.
In the entire period the money intended for Slovenian beneficiaries amounted to 1,2 percent of all BGA funding but the grants were nevertheless far from meager.
In 2020 alone, the fund accepted grant proposals with a record annual value of nearly € 8 million. Most decisions were signed in just two late December days in the span of a week – the BGA agreed to finance just five programs for a total of € 7,7 million.
Throughout the years the fund financed thousands of cross-border activities and projects as well as cultural and educational programs implemented by Hungarian secondary and primary schools in countries of interest. For such programs in or about Slovenia, the BGA rubber-stamped grant awards at a total of at least € 570 thousand.
In ten years the fund approved proposals of minority organizations in Slovenia for 5,9 billion forints which – per calculation based on European Central Bank’s referential exchange rate on the last day of each year – amounted to around € 17,4 million. Of this, 97 percent of the grants were allocated between 2016 and 2020.
BGA’s overall minority financing data shows that its scope had increased markedly in 2016 then fluctuated until last year, but at high amounts.
It appears to have increased in parallel with Prime Minister Viktor Orbán's rise to the position of the leader of illiberal Europe and his strive to assure Hungary’s transition to an undemocratic democratic state based on national values.
Meanwhile the financing of Hungarian national minority activities abroad became a somewhat expandable concept.
In Slovenia, 60 percent of all funds were awarded to a football club in Lendava. (It should be noted that the data and documents are not comprehensive enough to determine with certainty if funds were indirectly earmarked for football and at what value).
As Oštro reported in 2018, BGA is financing the FC Nafta 1903 football academy and supporting infrastructure that are to be built on a large plot of land near Terme Lendava, a thermal hotel complex. The project was expected to be completed by the end of 2019 but by October 2020 only one playing field with artificial grass next to a bilingual high school was finished and functional.
But the large plot adjacent to the thermal complex is still waiting for construction workers and machinery. After the building permit was issued in October 2020, project manager Mária Močnek postponed the deadline to 2021 – if all goes according to plan, as she told the minority’s weekly Népújság.
Oštro asked MMÖNK about reasons behind the increase in funding since 2015 and whether there was a need in one of Slovenia’s most impoverished regions for big football investments rather than in educational and cultural activities, the preservation of customs and cultural traditions, promotion of entrepreneurship, to support social welfare and similar.
MMÖNK said the increase was due to active »planning of various projects, some of which were also approved«. They indeed initiated the establishment of a football academy but are not implementing the project, they said. »Football is definitely one of the most popular sports in Prekmurje, as well as in the Hungarian national community.«
All of Hungary’s neighboring countries, except Austria, will get at least a football academy, some also a stadium. Prime Minister Viktor Orbán is an ardent football supporter, and a former semi-professional player for FC Felcsút.
He also signs football scarfs.
MMÖNK council president Ferenc Horváth has one, framed, in his office. It was featured in a 2016 TV Slovenia news segment where Horváth spoke about the millions that the Hungarian government has given for football in Lendava.
Horváth is a former member of FC 1903 Nafta’s management, former director of Minta, a company established by MMÖNK with BGA funds, former representative of the Hungarian national community in Lendava’s municipal council and the current Hungarian minority representative in Slovenia’s parliament.
After an inquiry by Oštro in 2018 about Horváth’s simultaneous roles as member of parliament and the head of MMÖNK’s council, the Commission for the Prevention of Corruption began looking into an alleged incompatibility of Horváth’s roles under the anti-corruption law.
The Commission concluded that Horváth’s roles were incompatible and ordered him to decide which official role he will terminate.
But Horváth did not relent. The Commission eventually decided to fine him but he filed a request for judicial protection and sued the public body. Both cases are pending in front of Ljubljana’s district and administrative courts.
Horváth still performs both functions.
The land next to the thermal complex is still waiting for construction of a football academy. Photo: Matej Povše
Financial planning as »eternal dilemma«
MMÖNK, led by Horváth during the most fruitful years, was awarded at least a third of all Slovenian-bound BGA funds. The majority came to MMÖNK after 2015 which is also reflected in the organization’s annual budgets. The one in 2019 was almost 155 percent higher than the one in 2011.
But the totals of project funds approved by BGA do not match MMÖNK’s reporting of these grants in annual reports. They are often not clear enough to deduce the sources’ origin from the wording.
In its 2015 report MMÖNK explained that the money received from the Slovenian state budget can cover only running costs. All other programs and investments, they wrote, depended on their success in »various tenders, especially in Hungary«.
MMÖNK’s annual reports of the last five years also reveal its considerable difficulties in financial planning due to revenues from the Hungarian government. For example, the 2019 report explained that total revenues were 36 percent higher than planned due to »Hungarian government grants.«
The background to this accounting conundrum was described as follows: »Foreign donations, earmarked and predominantly intended for investments, represent a bigger share of the budget each year. Such donations are very difficult to predict and represent an eternal dilemma during the preparation of MMÖNK’s annual budgets.«
At the end of 2016 MMÖNK received a total of almost € 2.2 million for three current or future projects that were to begin in 2017.
When MMÖNK had to cut € 580 thousand from its planned budget in 2018 due to a planning and accounting mistake it too »received donations from abroad«. Luckily, they were more than € 475 thousand higher than expected.
In response to Oštro’s questions regarding the apparent »semi-transparent« reporting and the finding that the reported amounts of BGA’s funding did not match the reported amounts in MMÖNK's annual reports, the organization stated it »operates transparently and all financial transactions are reported in annual accounts which are submitted to the national business register within the legal deadline.«
Oštro also asked for annual data on BGA funding, but they didn’t heed that request. They did state that the funding of operating costs fluctuates annually but stood at 55 million forints (around € 151 thousand) last year. From 2015 to 2020 they received a total of € 5,9 million from BGA and »other institutions« for various projects and investments.
Cultural care
BGA had allocated money to MMÖNK and others for a number of projects, programs and other activities, from financing the acquisition or renovation of real estate to cultural and educational programs and the establishment of organizations.
One of the most modest recipients in 2011 was the local communal organization of Kapca in Lendava where BGA co-financed the publication of a collection of poems and a development strategy for minority libraries with 200 thousand forints (around € 635 at the time). Judit Zágorec-Csuka, a poet with a PhD in librarianship, was elected to the leadership of the communal organisation in the prior year.
She told Oštro that the Hungarian government’s support was essentially the only source for financing the minority’s activities. The money received from the state budget is insufficient, she said, and there were almost no other financial sources or public calls, except in Hungary.
As noticed by Zágorec-Csuka, the number of applicants has increased over the years as did the quality of the proposed projects. She believes that this has inspired competition among those interested to apply for the funds to develop beneficial community activities.
She stressed that Kapca was a small community whose members are there for each other. They were proud of the support they received from BGA.
According to the Slovenian Anti-Corruption Commission, presidents of local communities are not subjected to the law on integrity and prevention of corruption where avoidance of conflicts of interest is stipulated, unless they have another public function (for example in the municipality council).
In the field of culture and media, the BGA regularly finances activities of institutions established by MMÖNK, for example the institutes for Hungarian culture and for informational activity of the Hungarian minority, the publisher of the weekly Népújság.
The Institute for informational activity was granted a total of at least 47,5 million forints from this fund between 2011 and 2020, or € 150 thousand. The institute’s director Tibor Tomka told Oštro that this money covered the costs of a correspondent from Goričko and the annual issue of KerekPerec magazine.
The BGA Fund also co-finances media content of the Slovenian Public Broadcaster’s studio in Lendava, the heart of Hungarian minority’s community.
According to data provided to Oštro by the broadcaster, the studio has received a total of € 117 thousand since 2011 for various projects. They filmed a documentary about the 820th anniversary of the city of Lendava, TV programs about the 100th anniversary of the beginning of the First World War, recorded episodes of a children's radio play High-school for dwarfs and purchased Hungarian cartoons.
But Hungarian influence in Slovenian media extends much further than minority programs, into media in close proximity to the ruling party SDS in terms of ownership and worldview.
Péter Schatz, the majority owner of Nova obzorja, the publisher of the weekly Demokracija and the tabloid Škandal 24, is one of the key players in Hungarian Prime Minister Viktor Orbán's media projects in the Balkans.
As revealed by Oštro and partners, Schatz financed media in Northern Macedonia that supported Orbán's ally Nikola Gruevski, the former Prime Minister who received political asylum in Hungary, through his Slovenian company R-POST-R.
The companies NovaTV24.si and Nova hiša, that publish Nova24 television, the news portals Nova24TV.si and ZAupokojence.si and the news aggregate vsenovice.info are also controlled by Hungarian capital. Ownership of these companies leads to individuals connected to Orbán’s unofficial adviser Árpád Habony, and to one of the richest Hungarians, Prime Minister’s ally Lőrinc Mészáros.
At the end of September 2020, the portfolio of Hungarian media owners in Slovenia expanded with the purchase of a semi-popular broadcaster Planet TV from majority-state-owned Telekom Slovenija for a reported five million euros. The buyer was TV2 Media, a Hungarian media publisher owned by József Vida, the head of Takarekbank and a longtime friend of Mészáros.
Planet TV’s editor in chief Mirko Mayer refused to comment on alleged connections of the new owner of the station he editorially oversees with the Hungarian ruling party. Based on contacts with the management he assessed that the owner had only a business interest in the company.
Editors of other media controlled by Hungarian capital did not respond to Oštro’s questions.
Hungary is also investing in spa tourism. Terme Lendava are bottom right on the photo. Photo: Matej Povše
Breaking the landlock
Hungary has also been striving to strike a deal with Slovenia to co-finance the construction of a second railway track between the Slovenian port of Koper and the town of Divača, about 20 kilometers inland.
This railway section currently represents a bottleneck on the port’s connections to the markets of Central Europe. It has been planned for more than 20 years but due to difficult terrain and high cost preparatory works have only begun in 2018. If everything goes according to plans of the current Slovenian government, led by Orbán’s emerging copy Janez Janša, Hungarian forints will support the project.
Last November Janša’s government sent a proposal to the National Assembly to strike a cooperation agreement with Hungary for the construction and management of the second railway track.
A similar agreement was proposed in 2017 by the then government of centrist Miro Cerar but the proposal was scrapped a year later, after the Marjan Šarec government was sworn in.
Janša’s government is now hoping to revive the idea of sharing the cost of upgrading Koper port’s link to the hinterland with Slovenia’s landlocked eastern neighbour. However, details of this government’s plan are unclear because the document is marked as classified.
Oštro’s freedom of information request for its copy was denied by the government stating ongoing negotiations and that a »public discussion and questioning of potential issues could significantly hinder talks and decisions«. An appeal is pending.
Thermal baths as cultural heritage
Hungary has also been strengthening its presence in Slovenia by investing in spa tourism. In the summer of 2018 the state-owned company Comitatus-Energia Zrt. purchased Terme Lendava, the local thermal resort and future neighbor of the FC Nafta 1903 football academy, from partly state-owned Sava Turizem.
Comitatus formally became the owner of the thermal resort in December 2019 after it obtained the consent of the Slovenian competition protection agency and an approval for the transfer of the right to use thermal water.
At the end of last year Comitatus injected € 2 million of additional capital into the company. These company documents were signed by Comitatus’ director, Dénes Kővári.
Kővári is also the executive director of Manevi Zrt., a real estate company owned by the Hungarian state. Last September, assets of Manevi and Comitatus were transferred to a new state foundation for preservation of cross-border cultural heritage in Central Europe, following a law approved by Hungarian lawmakers in July.
The law stipulates that the foundation is responsible for the protection of monuments of special cultural, historical and artistic significance to the Hungarian state. With its establishment the government wishes to preserve the cultural and historical heritage, and support related educational and scientific programs.
For example, the foundation manages Pannónia Hotel in Satu Mare, Romania. It occupies a building which is considered one of the most beautiful examples of the Hungarian variation of Art Nouveau.
Now it also manages Terme Lendava, a thermal resort built in the 1980s. It is not clear which cultural, historical or artistic features are to be preserved there.
The production of this investigation was supported by a grant from the Investigative Journalism for Europe (IJ4EU) fund.