Hungarian Commissioner investigating “USAID corruption” was involved in a foundation with opaque American funding

Fidesz MEP and newly appointed government commissioner András László is on a trip to the US to „investigate” past USAID funding of Hungarian NGOs, a likely prelude to a government crackdown against civil society and independent media. This is despite the fact that László was also involved in an NGO that received American funding.

In recent weeks, USAID has been in the center of the Hungarian government’s war on civil society. Even though fuding through the aid program has been facilitated transparently (this how we know, for example, that the government agency Hungary Helps also recieved USAID funds), since the discontinuation of USAID by the Trump administration, the government has been acting as if they found a „smoking gun” pointing to a massive corruption and foreign interference scandal.

While threatening Hungarian organizations with punitive actions, Viktor Orbán made it clear that he considers accepting foreign funding a form of corruption and a “breach of sovereignty”.

In March, a government commissioner has been appointed to „investigate” the flow of USAID funds to Hungary, in the person of Fidesz MEP András László. László said in an interview that his task is “to prevent foreign interference in Hungarian elections based on the US experience and the practice of allocating corruption funds in Hungary”.

Money has no smell

However, András László was previously also involved in a foundation that also received funding from the United States: the Common Sense Society Foundation, which was registered in Hungary in 2010, with the stated goal of influencing policy in Hungary by “promoting the democratic socialisation of young people, encouraging active participation in society, and facilitating intercultural communication between the Hungarian population and the international community.”

According to the CSS website, their Europa Fellowship program has been jointly funded by the Hungarian Matthias Corvinus Collegium and the American Federalist Society (FS), one of the most influential political foundations in the US. Originally set up to promote a conservative interpretation of the US Constitution, FS recruits members law students and practising lawyers, and champions various causes close to the heart of the Republican Party. FS’s influence is demonstrated by the fact that five members of the current US Constitutional Court were formerly active in an FS chapter.

András László (opposite) at the Common Sense Society event (source:commonsensesociety.hu)

András  László has last participated in a CSS even in October 2022, where he discussed Hungarian goverment policy. He can be seen on a photo taken at the event.

In the introduction of another event, the CSS website names him a founding member of the Common Sense Society.

This is reinforced by a 2010 presentation about the then newly registered foundation, which also lists a younger András László as a member of the Common Sense Society.

Source: screenshot from Slideshare.com

From the beginning, the two official representatives of the Foundation have been a married couple, Marion Smith (President) and Anna Stumpf (as Vice President). Anna Stumpf (Anna Stumpf Smith Lacey) is the daughter of István Stumpf, the government commissioner responsible for coordinating the change in the model of higher education in Hungary.

Anna Stumpf is also the Director of the Hungary Foundation, a US-registered organisation set up by the Orbán government in a 2012 government decision, originally called the “Friends of Hungary Foundation”. At the time, HUF 3.9 billion was earmarked for the launch of the foundation.

Marion Smith is also close to the fire in terms of building links and money flows between the Hungarian government and the US right. Smith has previously been a visiting scholar at the Heritage Foundation, an official partner of the Danube Institute, which is funded by the Hungarian government, and executive director of the American Victims of Communism Memorial Museum Foundation. The latter has been awarded more than HUF 2.5 billion by the Hungarian government in 2019 to establish a memorial museum in Washington, DC.

US franchise group’s project in Budapest

The Hungarian Common Sense Society is seemingly a local chapter of a US-based international network – apart from Hungary and the US, CSS is also present in the United Kingdom and the Netherlands. However, the Hungarian Common Sense Society Foundation is actually older than its American counterpart, having been registered only in 2012.

Instead, old publications by The Federalist Society suggests that they were actually started as part of FS’s European network-building project.

In FS’s 2010 annual report it is stated that CSS (which at that time existed only in Hungary and was just registered) is a member of a “network of law students and legal and public policy organizations, the European Sovereignty Network (ESN), which aims to promote transparency and accountability in Europe’s various political, economic, legal and security institutions.” This network was previously launched by FS.

Another FS publication, also from 2010, refers to CSS as a partner organisation. At that time, they were supporting a CSS project promoting the Hungarian Fundamental Law, which was being drafted at the time. Marion Smith was indeed writing articles on the constitutional process at the time, making recommendations on the constitution being written. These were published on the Heritage Foundation website, but were also reviewed by the Hungarian right-wing magazine Mandiner.

Later FS reports mention their continued support: in both their 2012 and 2013 reports, they wrote that they sponsored the Hungarian foundation’s summer leadership academy. And the CSS website reported that the US foundation, together with the MCC, sponsored the Europa Fellowship program.

Suspiciously similar numbers

One of the false accusations against Hungarian civil society is that their organizations recieve funding from abroad in opaque ways. This however seems to be true for CSS: their official financial reports do not show foreign funding, contradcting the acknowledgements on their and FS’s publications. They also neglected to publish their 2023 report.

Strangely, in 2021 and 2022 (the years the Europa Fellowship was ongoing), CSS reported a large amount of “sales revenue” (HUF 5 353 00 in 2021 and HUF 10 574 000 in 2023). This is surprising as the foundation seemingly sells no product or service. They also reported income from ‘other’ sources (HUF 400,000 and HUF 2,950 million), but where this came from was not filled in.

A comparison of the spending and revenue reported by FS and CSS.

However, it is likely that CSS reported American funding as sales and ‘other’ revenue: the US Federalist Society reported in its 2021 financial report that it spent $16,918 on a European project in November 2021. This is equivalent to 5 753 000 HUF at the exchange rate (using the historical exchange rate calculator on investing.com),

which is exactly the same as the annual income reported by the Common Sense Society in the “revenue” and “other” categories that year (5 753 000 HUF).

The following year, we see the same pattern: then the Federalist Society reported spending $41,277 in March to support a European program. This is also almost the same amount (13,632,926 on March 1) as the Hungarian foundation’s total income in 2022 (13,524,000 forints).

András László: I am not a founding member

We contacted András László by e-mail to ask him how compatible he considers his work as a government commissioner scrutinizing foreign funding with his participation in a foreign-funded organisation. In response to our question, László wrote:

“I was there when the Common Sense Society was founded, I know the founders, but I am not a founding member, nor have I been a member of the foundation since 2010.”

Regarding his participation in recent CSS events, he said, “At their invitation, I met with two groups of foreigners visiting Hungary in recent years to discuss the political situation in Hungary. As I have not been a member of the organisation for about 15 years, I do not know the details of their programs.”

He added: “I think it is in the interest of all Hungarians that the Hungarian public should know about the foreign funding of organisations that have a great influence on Hungarian public life, and that the illegal manipulation of voters and elections with foreign money should be stopped.”

We also tried to ask the Federalist Society in the US and the Hungarian Common Sense Society about how the Hungarian scholarship program was funded and exactly how much money the Hungarian-registered foundation received. So far, we have not received a reply from either of them, or from the Hungarian foundation, if only because none of their public email addresses are available, and if you send an email to them, you get an automatic error message back.