Country: Hungary

Corruption Research Centre at the Corvinus University of Budapest Monitors Public Procurement

(contributed by Mihály Fazekas, researcher at the Corvinus University of Budapest)

 

While Hungarian authorities publish announcements on the country’s public procurement activities in line with the 2004 EU Directive, this information is not available in a structured format for those who would like to gain insights going beyond any individual announcement (e.g. tracking how much a company won in a given period). In addition, information is not checked before publication by any public authority resulting in multiple errors in the announcements such as typos, missing information, inconsistencies.

In order to improve the current situation and to advance effective corruption control in Hungary, the Corruption Research Centre systematically collects data appearing in the Official Public Procurement Bulletin from 1996 until recent times (quarterly updates). The information is downloaded in a structured database and data quality is enhanced by correcting obvious errors and inconsistencies. For example, a large amount of information on the value of contracts awarded appears written out by letters rather than numbers often ignoring basic grammar rules. We also assign to contract winners their unique tax IDs which allows for tracking companies’ activities over time regardless of changes in their names or addresses.

Using the database constructed from official data, semi-annual monitoring reports are published by the Centre in order to inform citizens of general public procurement trends as well as shed light on specific issues. As these reports have spurred significant media coverage they succeeded in initiating discussions with some important stakeholders. In the February 2012 report, for example, we uncovered the list of the biggest issuers of tenders and companies winning most tenders, which prompted protests from some of them claiming that data was falsified. While referring to exact published announcements could resolve some of the controversy, it also became clear that multiple versions of the same announcements are published in the Official Bulletin without clear reference to each other (e.g. a corrected version of the announcement may appear without clear reference to the obsolete original announcement). This clearly causes significant legal uncertainty for ordinary citizens even in the case of simple questions such as how much a concrete awarded contract was actually worth. In order to alleviate this problem the Centre now explores potential corrections and multiplications among announcements to improve data reliability.

A common theme throughout the reports of the last two years is the strength of competition in Hungarian public procurement. A simple metrics which we monitor recurrently is the contracts awarded when there was only one bidder. Surprisingly to us and to many journalists picking up our findings, about 50% of all contracts were awarded without any serious competition in the last years, without any sign of improvement lately.

Among our future priorities, making the whole dataset publicly available features high. Once data reliability is firmly established and quality improvement possibilities exhausted, the Centre’s database will be able to fully serve the wider public. In addition, after establishing contact with our Czech and Slovak colleagues working on public procurement data a joint report is planned for early 2013 exploring cross-country differences.

 

TI Releases New Study on Corruption Risks in Eastern European Countries

A new report released by Transparency International (TI) examines the main corruption risks in four Eastern European countries, namely Czech Republic, Hungary, Poland and Slovakia. According to the study, reforms to strengthen democratic institutions and the anti-corruption legal framework in these countries, undertaken largely as part of their accession process to the European Union, have not been successful in minimising corruption risks, and the danger of political influence over fundamental control institutions remains.

The report points out that some of the institutions resulting from those reforms have in fact been weakened or entirely abandoned by dominant political actors after the accession. According to Miklos Marschall, Deputy Managing Director at Transparency International, “the laws and institutions against corruption in the Visegrad region will remain empty shells without a meaningful commitment to transparency. Most important is that high level public servants and politicians declare their assets and interests, public institutions must be independent from influence and there needs to be better checks on party financing”.

TI’s new report, based on national surveys assessing the strength of the anti-corruption frameworks of these four countries, captures some important similarities and differences in the region. Among the common risks identified in the study are weaknesses in party financing regulation and vulnerabilities related to corruption in the business sector. Nevertheless, some of the positive aspects raised are related to the relative independence and leeway of civil society and media and the importance of investigative journalists and bloggers in exposing corruption in these countries.

For more detailed information on the report, please read the press release “Post-communist institutions failing to stop corruption in Visegrad countries” on transparency.org.

 

A Diagnosis of Corruption in Hungary

How corrupt is Hungary? What type of corruption? How did it evolve during the years? Was there a period when it was more corrupted and what happened to change that? What were the civil society responses? Did the political context allow for more anticorruption measures to be enforced? This report answers all these questions and more.

A Diagnosis of Corruption in Hungary

How corrupt is Hungary? What type of corruption? How did it evolve during the years? Was there a period when it was more corrupted and what happened to change that? What were the civil society responses? Did the political context allow for more anticorruption measures to be enforced? This report answers all these questions and more.

K-Monitor Watchdog for Public Funds

This project calls itself an independent wathchdog of corruption. It collects all the reports and articles on corruption in Hungary and hosts several links to foreign issues. It also gathers the writings around issues, persons, institutions, and events; furthermore it allows for an elaborate search in its database.

Parasolvency

The goal of the proect is to make the system of gifts in the health care sector transparent. It achieves its aim by providing a web-page where gift givers can publish the amounts they give. By this, a more transparent market can arise in the place of private deals and obscure rules. Beyond gift amounts, users share opinions on quality and discuss issues of corruption in health care. The project was attacked by the ombudsman and doctors thus it had to be moved to serves outside the reach of the Hungarian authorities.

Transparent State

The goal of the project is to increase the transparency of public spending and of public activities in general. It achieves this goal primarily by providing data on public spending in a much more accessible way than usually and by checking governmental and semi- governmental bodies if they abide the law on freedom of electronic information (2005. XC. Law). It also produced a ranking of public institutions according to transparency.

Energy Control Project

The project aims at advancing a clean and transparent regulatory environment for the Hungarian energy sector. Its goal is to facilitate that “as many people have factual information as possible, understanding the importance of this sector on their lives”.  In order to achieve this, it is essential that interested persons have access to data concerning them, and understand the background and consequences of the decisions of power.

To do this, the Project:

1. Collects, requests, processes  and publishes information, facts and data in order to have a comprehensive view on the sector.

2. Conducts researches and writes studies to analyze and reveal the conditions of the Hungarian energy sector. They investigate its institutional and legal background, financial processes, and decision-making mechanisms. They also provide generic and specific suggestions to the problems listed here.

3.  Launches tenders for investigative news articles. In these they draw the public’s attention with instruments of journalism on shortcomings, inconsistencies, misconducts and corruption in the sector.

4. Takes part in a work group where compliance with the Aarhus Convention (“on Access to Information, Public Participation in Decision-making and Access to Justice in Environmental Matters”) in the field of nuclear energy is investigated.

Common qualities of all the pillars of the program are the controlling role of publicity, revealing and documenting facts, as well as shaping the professional and social approach to these issues.

The Control Energy Project has had a lot of success since its launch in 2009. Its studies were met with great interest, leading to a full-house conference that had high coverage in the press and attracted great professional attention. Following our tenders, a range of investigative articles were published in national media and on the oknyomozo.hu site, the author of such an article received the prestigious Soma Award for the CEP material. During its operation, the program initiated dozens of data request proceedings, with lawsuits where necessary.

The Control Energy Project is a highlighted program of the Energiaklub

Read more about CEP here.

Hypocrisy

The goal of the project was to exert pressure on parliamentary parties to arrive at a consensus on the need for and contours of reform in party- and campaign financing. It advocates for: (1) Introduction of a designated campaign account; (2) increased ceiling for campaign spending; (3) shortened campaign period; (4) strengthened oversight of campaigns.

Corruption Research Centre

This is an academic research institute within the Corvinus University of Budapest where the scholars are not only doing academic work but actively engaging in promoting their findings, collaborating with other NGOs (e.g. Energy Control Project, TI-HU), and seeking media coverage of uncovered corrupt cases.

Association for Freedom Rights

This NGO fights for open government and access to public information which clearly has impacts on corruption although the objectives of the NGO clearly go beyond corruption.

Civil Movement

This project is run by a single woman who started to collect signatures in order to have a referendum on a range of corruption related issues: 1. no politician could receive reimbursment of additional costs without presenting the corresponding invoices, 2. no state aid is to be given to political parties, 3. the possibility of cancelling the mandate of elected MPs during their term.

Romanian Businessman Arrested in Hungary

Romanian businessman Dinel Nutu (formerly known as Staicu, pictured here) was handed over to Romanian authorities today by Hungarian police officers after having fled Romania after being convicted for being an accessory to the abuse of office and being sentenced to a prison sentence of seven years.

Mr. Nutu was apprehended by the Hungarian authorities on April 19th on the basis of a European Arrrest Warrant that was issued by a Bucharest court. Mr. Nutu was convicted in connection with his role in the bankrupty of the Bank of Religions (BIR).

For the original story from Mediafax.ro (also in Romanian), please click here.

Please note that the photo of Mr. Nutu also comes from the Mediafax site.

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Is East-Central Europe Backsliding? EU Accession Is No “End of History”

In the textbooks on democratic transition, Central and Eastern Europe provides the model of success. Yet in Brussels concern over the politics of the new EU members has been mounting. The day after accession, when conditionality has faded, the influence of the EU vanished like a short-term anesthetic. Political parties needed to behave during accession in order to reach this highly popular objective, but once freed from these constraints, they returned to their usual ways. Now we see Central and Eastern Europe as it really is—a region that has come far but still has a way to go.

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