PM’s Cabinet Office finances government organized NGO through secretive foundation

According to contracts and documents seen by Átlátszó, Alapjogokért Központ (Center for Fundamental Rights), a government organized NGO which supplies pro-government talking heads and all-round expertise to media outlets distributing government propaganda, have received nearly 1 billion HUF (cca. 3,3 million USD) in grants from the PM’s Cabinet Office channelled through the Batthyány Lajos Alapítvány, a secretive grantmaker foundation.

When you watch Hungarian public television channel M1, which broadcasts news around the clock, you’ll notice a strange phenomenon: whatever happens around the world, the same few dozens of experts seem to be able to comment on it. Eminent amongst the organisations supplying these talking heads is Alapjokért Központ (Center for Fundamental Rights), which styles itself as a „research institute dealing with legal analysis”.

“The Center considers preserving national identity, sovereignty and Christian social traditions as its mission, especially amongst the 21st century’s heightened process of globalization, integration, geopolitical and technological changes, affecting the field of law as well.” – reads the mission statement.

Let’s look at at one of the more recent broadcasts of Unió27, a current affairs programme supposedly covering European issues. During the twenty minutes of the broadcasts, all four news segments are commented on by the same person, standing in front of a branded folding screen. He’s introduced as Attila Kovács, project lead for Alapjogokért Központ.

Attila Kovács, project lead for Alapjogokért Központ, gives expert opinion on various topics during the 18 February 2020 showing of Unió27 on M1. source: M1 / Médiaklikk

Kovács offers analysis on:

• „critique on vaccine procurement of the European Union snowballs”
• „British mutation of coronavirus spreads rapidly”
• „György Soros gave support of several hundreds of millions of Hungarian forints to NGOs”
• „EU foreign policy chief’s visit to Moscow considered a gigantic failure”

For one watching the show, several points may remain unclear. What sort of project does Kovács lead, and why aren’t the viewers told? What’s his area of expertise? How come he happens to research all of the topics currently featured in the news? If he’s working on so many things, how does he have the time to parade on television regularly? And how did the producer even think of reaching out to a legal research institute for a programme dealing mainly with matters of health?

The most logical solution to these dilemmas: the main task of this person and his ilk is not research, but to act smart on television.

During last year, a secretly made and leaked recording became public. On the recording, one of the leaders of the public channel was instructing colleagues how to manipulate seemingly balanced news reporting. If the person interviewed doesn’t say the right things, „we ask Miklós Szánthó, who will say the real shit on what this means, and so we reported correctly the given situation, but we’ve also simplified it for the folks, like, that’s why this has to be understood this or that way”.

Miklós Szánthó. source:alapjogokert.hu / Alapjogokért Központ

The example given during these instructions, Miklós Szánthó is the founder and owner of Jogállam és Igazság Nonprofit Kft., the company behind Alapjogokért Központ. Another posting illustrates how closely the workings of Alapjogokért Központ correlates with government and allied propaganda: in 2019, Szánthó was named as the new president of the board for KESMA, the giant government-allied media conglomerate.

Various documents seen by Átlátszó reveal another, even more important trail that leads directly to the government: Jogállam és Igazság Nonprofit Kft., which is the legal entity behind Alapjogokért Központ, received at least 925 million HUF from Batthány Lajos Alapítvány (BLA). The original source of these funds is Miniszterelnöki Kabinetiroda (the PM’s Cabinet Office) led by minister Antal Rogán, which is a government body spending public money.

It is obviously not a coincidence that the original source of the cash set to the talking heads is the govermnental organisaton responsible for communication. The role of BLA seems to be nothing more than forwarding the cash, as its last available financial report shows that aside from receiving several billions of HUF from state grants, the foundation produces virtually zero income.

The documentation on the cash grants are physically located in one building of Miniszterelnöki Kabinetiroda situated in Iskola street, on the Buda side of Budapest. Átlátszó has initiated a freedom of information request on the topic, which has led to our reporter visiting the building and reading the documents. We were not allowed, however, to take any pictures of the documents. Their content are reconstructed now in this article from our notes, as well as complemented by other information available from publicly available sources.

Organisational dictionary

Our article features several organisations. Although the visible details paint a complex picture, the underlying scheme is indeed very basic. Money transfers characteristically originate from Miniszterelnöki Kabinetiroda, are channelled forward by Batthyány Lajos Alapítvány and received and spent by Jogállam és Igazság Központ Nonprofit Kft., which runs Alapjogokért Központ.

Organisational chart.

Here’s an dramatis personae for ease of understanding:

Alapjogokért Központ (AK, Center for Fundamental Rights), also known as Jogállam és Igazság Nonprofit Kft. (JI, Rule of Law and Justice): JI operates in the public sphere under the brand of AK. There is no organisation registered in Hungary bearing the name of Alapjogokért Központ, and we know of no other activites of JI other than running the legal research institute. Therefore, we can consider JI and AK one and the same. The founder and owner of AK is Miklós Szánthó, who is president of the board for Central European Press and Media Foundation (KESMA), the giant government-allied media conglomerate at the same time.

Foundation Batthyány Lajos Alapítvány (BLA): The formerly private institution was made a „public wealth management foundation” at the end of last year by the right-wing Fidesz majority in Parliament. The foundation was originally initiated by PM József Antall in 1991. After 2010, the new right-wing supermajority of Fidesz revitalised it by cash injections.

BLA was formerly financed by the Fidesz party foundation, the steadily rising amounts of financial support now comes from public money: since 2016, they received altogether more than 10 billion HUF from Miniszterelnöki Kabinetiroda. The makeup of the board is under some reconstruction since BLA’s status was elevated by law, but the president of the board is still historian Tamás Dezső, who is the leader of Migration Research Institute.

Miniszterelnöki Kabinetiroda (MK, Prime Minister’s Cabinet Office): This governmental body, led by Fdiesz politician Antal Rogán, is a sort of switchboard between PM Viktor Orbán and centralised governmental communications, hence its sobriquet: „Ministry for Propaganda”. Aside from the numerous communication-related units under the aegis of the Cabine Office, it also supervises institutions with gigantic budgets, such as Digitális Kormányzati Ügynökség Zrt. and Nemzeti Kommunikációs Hivatal. The people of Hungary have Rogán & Co. to thank for the various poster campaigns costing altogether 93 billion HUF accoirding to last year’s data, the pièce de résistance of which is the well-known image of György Soros in front of a blue background.

What was hidden in the documents

According to a 2018 document, in which BLA accounts for the spending of 383.65 million HUF stemming from an earlier grant from MK, JI received 123.65 million HUF from the total.

A grant contract between BLA, which effectively passed the cash along, and JI, dated September 2018 explains as antecedent: ’Under the framework of a grant contract established on 21 November 2016, based on the [JI] Kft.’s request as well as the 21 November 2016 decision of the board of directors of the foundation” BLA has supported JI’s research activities and human resources development before, for an 8-month period during 2016. – 2017. and another 12-month period during 2017. – 2018. According to the contract, ’the Kft. continues its formerly initiated research activities, in the focus of which reside challenges to democratic representative governance and European unity’.

The 123.65 million HUF, given in 2018, can be spent only on ’contracting costs, wages, other types of personal allowance, related common public charges, or infrastructure costs’. A highlight of the contract is ’the aim of the grant is the financing of the Grantee’s activities, in return Grantee is devoid of any obligation to remunerate’.

A ’2. amendment of grant contract’, signed in 2019 by MK and BLA explains that Jogállam és Igazság Nonprofit Kft. belongs to the ’ultimate beneficiaries’ of the grant. According to this, JI received in this year 183 million HUF for „research on sovereignty, especially political and legal implications of sovereignty”.

MK gave us a list entailing grants given by BLA during 2018. – 2020., most likely from MK financing. On the list, JI appears twice.

The company running Alapjogokért Központ received 500 million HUF for ’analysis and research activities, legal projects, events, general operations, talent care’. They got 116 million HUF for ’10 years of national governance — the research, evaluation and analysis of the activities of the 2nd, 3rd and 4th Orbán-governments’.

They received a further 2.4 million HUF for ’research of the concept of liberal democracies, as well as its historical antecedents, changes, surrounding arguments and its effects on society, furthermore the research of the politico-social environment of postmodern urbanisation’.

Total well above 1 billion HUF

Summing up the numbers, BLA gave at least 925.05 million HUF to Alapjogokért Központ between 2018-2020: 801.4 million for 2019 and 123.65 million for 2018. The end result must be higher, since we know of the fact of further financial support during 2016.-2018., but we do not know the amount.

We know that th 123.65 million HUF sum given in 2018 was earmarked for 6 months of activities. We also know, that the unkown amount was supposed to finance 20 months. Hence, this unknown amount constitutes probably several hundreds of millions HUF, pushing the total well above 1 billion HUF.

One could hardly argue that BLA’s role is to serve as a puffer between cash wired by MK and its ultimate beneficiaries. Several documents, in the care of MK that we looked at, named Jogállam és Igazság Nonprofit Kft., so Rogán & Co. at least had to know where the money went.

It is also very likely that the whole scheme is orchestrated from the Cabinet Office. Without any backchannel wheeling-and-dealing, it would hardly make sense for the foundation to start sending hundreds of millions HUF to Szánthó’s firm when they appear and ask for a cash handout at an institution that does not advertise any such opportunities. So what’s the point of complicating the matters and including BLA? Surmisably to help MK get out of any scrutiny afforded for the squandering of public money.

Questionable return

Alapjogokért Központ received 116 million HUF for a project named ’10 years of national governance — the research, evaluation and analysis of the activities of the 2nd, 3rd and 4th Orbán-governments’. The result of this can be looked at online, as it received a separate subdomain under ujkorszak.alapjogokert.hu. It, sadly, does not come in English.

‘… Hungarian and Polish forces have stopped at Brussels the attack of the liberal international brigades.” A photo of Orbán on a picture of a TV screen, while a recording from radio channel Kossuth plays: part of a propaganda video made from Alapjogokért Központ. source: alapjogokert.hu

The site showcases the following four elements:

A timeline (1 item) of some political events during these 10 years (such as ’2018: Jobbik becomes part of left-liberal opposition’), curated from the reports of public news agency MTI

• 3 items of short texts, touted as ’case studies’, such as: ’Immigration: Hungary was right’
• A total of 9 news items including reports on media content about the project elsewhere, as well as a number of propaganda videos produced during the project. The short videos include no original recording. Not many people watched them: when we looked, the most popular one’s counter stood just above a thousand, while the less popular was watched by less than a hundred times.
• 7 items of documents named analysis, each amounting to a few dozens of pages. The texts recount main political news events in Hungary since 2010.

It is absolutely certain that the content of this website does not worth 116 million HUF in public money.

We’ve already quoted that, according to one grant contact, the company behind AK in exchange of the money ’is devoid of any obligation to’ do anything in exchange. According to another document, the grant’s aim is to further AK’s ’human resources development’, which is just a fancy way of saying that the cash is not for doing this or that, but for them to hire more people.

This might just be the reason why BLA was included in the money transfer structure: muddying the waters over whether the amounts passed along by the foundation qualifiy as public money. Otherwise, it is obvious that the main role of Alapjogokért Központ is the support the party and government of PM Viktor Orbán.

It is hardly a novelty for AK to operate on someone else’s money. Some years ago, Átlátszó has reported thath after its establishment in 2013, JI’s (then much smaller) operating costs were financed by the Fidesz party foundation, Szövetség a Polgári Magyarországért Alapítvány. In 2013, they gave 31.6 million and in 2014, 49 million HUF. In 2015 Átlátszó Oktatás acquired and published the reports in which Miklós Szánthó, JI’s leader recounted to the foundation:

’The establishment of the Centre was based on the realisation that the domestic and international criticism regarding Hungary need to be answered in a legally grounded way (…) several published analyses have made waves in the media’.

The grants that Alapjogokért Központ received from BLA were not public knowledge so far, because Jogállam és Igazság’s annual financial reports only include the amount of the donations they received, but not their sources.

It is interesting, however, to look at how big role donations played in JI’s life. The following graphic is based upon data from JI’s annual reports, with the purple columns showing all donations received, and the yellow columns showing regular income.

Az Alapjogokért Központ bevételeinek szerkezete

As such information is missing from the reports, we cannot directly trace the amounts in the documents we looked to the company’s coffers. At least in one case, there is a sizable difference between the contracts and the reports: while we calculated that JI must have received 801.4 million HUF in grants in 2019, the report only talks of 654.1 million HUF in donations.

But we can be certain that during the last few years, BLA was the most important source of income for AK.

The numbers also show a surprisingly huge growth in income for 2019. The difference isn’t reflected in the meager profits, showing 9.1 million HUF for the year.

So what did JI spent on the several hundreds of millions of HUF? The answer lies in the rise of number of employees and wages. Personnel-related costs, rising for years, amounted to 148.2 million HUF in 2018, and 323.5 million HUF in 2019. While in earlier years they employed some 5-6 workers, whis number has risen to 13 by 2019.

Wages have also grown. Between 2015 and 2019, monthly personnel costs per employee rised from 0.79 to 2.07 million HUF. On the above diagram, this is shown on the green line, while the red columns show yearly total personnel-related costs.

No answers

We have sent questions to all three organisations: Miniszterelnöki Kabinetiroda, Batthyány Lajos Alapítvány and Jogállam és Igazság Nonprofit Kft. / Alapjogokért Központ.

These included:

• Altogether how much money gave MK ever to BLA for the support of JI?
• Is it a prudent way of spending public money to not expect anything in exchange?
• What, if anything was produced from the 116 million HUF for the ’10 years of national governance’ project aside from what can be seen on the site we mentioned earlier?

So far, we have received no response.

Translation: Márton Sarkadi Nagy. Original (Hungarian): Márton Sarkadi Nagy.

Cover photo is a montage, includes photos of Antal Rogán (source: Miniszterelnöki Sajtóiroda / Szecsődi Balázs), and Kovács Attila Alapjogokért Központ-projektvezető (source: M1 / mediaklikk.hu)