10 May 2019

Viktor Orbán and the corruption of conservatism


With the support of the Atlas Network, CapX is publishing a new series of essays on the theme of Illiberalism in Europe, looking at the different threats to liberal economies and societies across the continent, from populism to protectionism and corruption.

During the early 1960s, the conservative movement in the United States underwent a deep transformation, largely thanks to the leadership of William F. Buckley Jr., the editor of National Review. Initially, the magazine was sceptical of federal efforts at desegregation, on the grounds of defending the rights of US states to govern themselves. For Buckley, that position became untenable in the light of the actual policies that Southern states were pursuing. “I once believed we could evolve our way up from Jim Crow,” he said in a 2004 interview. “I was wrong. Federal intervention was necessary.”

Buckley famously purged the magazine, and with it much of the conservative movement, of anti-Semites, racists, conspiracy theorists, and kooks – and enabled it to thrive as a healthy, intelligent stream of Western intellectual life for decades to come.

Today, the conservative movement is in dire need of a similar cleanse. The dividing line is no longer the issue of the rights of individual US states but includes more broadly the questions of globalism, global governance, and local control. Unlike the distinctly American controversy of the 1960s, it affects conservatively-minded individuals on both sides of the Atlantic. Yet the underlying substantive issues are strikingly similar. At what point does the defence of the nation state vis-à-vis expansive forms of international cooperation become an apology for racism, arbitrary state power, authoritarianism or anti-Semitic tropes?

Many conservatives will recoil at the suggestion that the two categories are in any way connected. But supporting Donald Trump means accepting, reluctantly or enthusiastically, his bigotry, just as embracing the cause of Brexit meant making peace with the anti-immigration demagoguery of some on the Leave side.

But whatever positions one took in 2016, the problem has grown much deeper since. Too many conservatives have defended budding authoritarians who claim to defend conservative values against progressive overreach – most prominently with the governments of Poland and Hungary.

Last year, Heritage Foundation’s Mike Gonzalez wrote that the Trump administration “must befriend Hungary’s populist leader,” Viktor Orbán. “Hungary shows the West the path to survival,” claims one headline in The American Conservative magazine. Even more careful thinkers, such as Sir Roger Scruton, extended a considerable degree of deference to Hungary’s Prime Minister, claiming that he was “not the kind of demagogic tyrant that the liberal establishment in Europe want to make him out to be”.

But authoritarianism is not a “matter of degree” or a question of Orbán’s throwing “his weight around more than most Western politicians would,” as Sir Roger – who called himself “neither a friend nor an enemy of Orbán” – put it. Authoritarianism is the defining characteristic of the political system the Hungarian Prime Minister has been consciously building since 2010, with a considerable degree of success.

Don’t take my word for it. Orbán said so himself, in his speech on July 26, 2014 in Băile Tușnad in Romania. There, he singled out Singapore, China, India, Turkey, and Russia as “stars of international analysts”, touted the idea of illiberal democracy, and suggested that Hungary needed to part with Western European “dogmas” — especially with the liberal notion that people “have the right to do anything that does not infringe on the freedom of the other party”.

When Freedom House downgraded Hungary from “free” to “partly free” last year, it prompted ire from the Hungarian government. The government’s spokesperson, Zoltán Kovács, accused the organisation of double standards, called its methodology politically motivated and blamed the result on George Soros.

Yet the steady erosion of governance and political freedom can be observed in a variety of other data sources that are immune to similar criticisms. Those include not only the Worldwide Governance Indicators (WGI) published by the World Bank – which takes a decidedly technocratic approach towards matters like institutions, the rule of law, and governance – as well as metrics developed by right-of-centre organisations such as the Heritage Foundation and the Cato Institute.

Hungary has dropped 14 places since 2010 on Heritage Foundation’s Index of Economic Freedom, with particularly alarming scores on measures of judicial effectiveness and government integrity. Or consider the Human Freedom Index, published by the libertarian Cato Institute, which measures both personal and economic freedoms. There, Hungary took a plunge from 28th to 42nd place between 2010 and 2016 (the most recent year for which data are available).

To those familiar with the extent of graft and cronyism in the Hungarian economy, this should not come as a surprise. Hungary, like other Central European countries, depends heavily on the inflow of EU funds. In Hungary’s case, those accounted for 4.6% of GDP over 2006-15 — the most of any member state — and for 80% of all public investment.

If the EU funds have been a mixed blessing throughout the region, this has been especially true in Hungary because of the poor procurement rules and the concentration of decision-making authority over disbursement of funds in the prime minister’s office.

For instance, Hungary relies heavily on unannounced “negotiated procedures”, which allow the government to strike a deal with any company without going through an open competition. And even on open tenders, the highest rates of procedures involve only a single bidder. As a result, the EU’s anti-fraud office, OLAF, routinely recalls funds for irregularities and fraud. In fact, irregularities were found in all 35 projects that OLAF reviewed in Hungary between 2011 and 2015. The government was ordered to repay €283 million for a new metro line in Budapest. Last year, OLAF announced it would seek to recover more than €40 million for overpriced municipal lighting projects, awarded to a company owned by Viktor Orbán’s son-in-law, István Tiborcz.

Included among other prominent examples of graft is Lőrinc Mészáros, the mayor of Felcsút, Orbán’s home village. A former gas engineer, he is the eighth-richest man in Hungary and with his wife owns some 121 companies. In 2017, his wealth tripled to $392 million, according to Forbes. Eighty-three per cent of Mészáros’ family companies’ earnings are believed to come from EU funds. When asked to what he owed his success, he once responded: “God, luck and Viktor Orbán.”

Such cases, as well as the frequent sales of public land exclusively to supporters of Fidesz, are not isolated but instead represent a quasi-official policy of using patronage to entrench the power monopoly of Orbán’s party. A new idiom has even appeared in everyday Hungarian: “Fidesz-közeli cég,” meaning “a near-to-Fidesz company.”

Though important, corruption is only one dimension of Orbán’s authoritarian project. Another one is the systematic dismantling of checks on political power. Last year, a separate administrative court system was created, under direct political control, to deal with a wide range of public law matters: police oversight, tax law, public procurement, local government, competition law, public protests, and election and media issues. The judges in the new system – headed by a staunch Fidesz loyalist – are appointed directly by the justice minister, who will also make decisions about their remuneration and promotion, shedding any pretence of independence.

In 2011, Orbán rushed a partisan reform of the constitution through parliament. The new Fundamental Law, which came into force on January 1, 2012, was drafted by a small group within Fidesz and was adopted exclusively by the votes of Fidesz, which at the time enjoyed a two-thirds majority in parliament. Since then, the Fundamental Law has been amended seven times and a new practice of adopting so-called Cardinal Laws has been introduced, allowing for brisk changes of the constitutional system.

In 2011-13 alone, parliament passed 32 such laws. A 2013 constitutional amendment stipulates, for example, that the right of freedom of speech may not be exercised in such a way as to violate the dignity of the “Hungarian nation or any national, ethnic, racial or religious community”. A nebulously phrased 2018 amendment, in turn, specifies that “the exercise of the freedom of expression and assembly cannot entail the invasion of the private and family lives of others or the trespass of their homes”.

Under a different amendment from 2013, the Constitutional Court has lost the power to review budget and tax laws passed when the debt-GDP ratio exceeds 50%. If, for example, a tax infringes on constitutionally guaranteed rights or applies selectively to an ethnic or religious minority, the Court does not get to have a say – ever.

The new “Fundamental Law” also paved the way for reducing the retirement age for judges from 70 to 62 years, instantly removing the most senior 10% of the judiciary, including 20% of the Supreme Court judges and more than half the presidents of all appeals courts. That was declared illegal by both Hungary’s Constitutional Court and the EU’s Court of Justice. But by the time those rulings were issued, most of the judges had already left.

Hungary’s turn towards authoritarianism has opened the way to Russian interference. The country’s relationship with Ukraine has worsened significantly, to the point where Budapest sought to exclude Ukraine from participating in the 2018 NATO Summit in Brussels. Hungary’s government also refused to extradite two suspected Russian arms dealers, Vladimir Lyubishin Sr. and Vladimir Lyubishin Jr., to the United States on the basis of an existing extradition treaty. The two are suspected of organising arms shipment to Mexican drug cartels (including advanced missile systems) and of trafficking cocaine to the United States, where they could face jail time of up to 25 years. Hungary’s Ministry of Justice decided instead to honour Russia’s extradition request, filed later, and flew the two individuals to Moscow.

Shortly after it effectively expelled the George Soros-funded Central European University from Budapest, the government of Hungary concluded an agreement with the International Investment Bank (IIB), a relic of the Cold War-era currently based in Moscow, to move its headquarters to Budapest. Besides Russia, which owns almost one half of the bank’s capital, the IIB’s membership includes five current EU and NATO nations (Czech Republic, Slovakia, Hungary, Romania, and Bulgaria), Vietnam, Mongolia, and Cuba.

Given the IIB’s status as an international organisation, Hungary will have to allow all “advisors and experts acting in the Bank’s interest” to enter the country – and therefore the Schengen Area. But those can include Russian nationals currently included on sanction lists. It is not difficult to imagine how this might strain diplomatic and economic relations between Budapest, Brussels, and Washington. The IIB could extend loans to projects that involve entities sanctioned by either the United States or the EU – not to speak about the possibility that it serves simply as a cover for Russian intelligence operations in Europe.

Ignoring the reality of Hungarian authoritarianism, or seeking to excuse it because of the real and imagined threats posed by George Soros or the European Union, is much more than just a blemish on the conservative movement. It is a sign of a deep rot that needs addressing ruthlessly, lest conservatives are to survive as a credible intellectual force. In fact, the challenge is even more urgent than that.

We now know that segments of the political left, not least the leader of the Labour Party, are comfortable with a variety of tyrannical regimes and even terror groups, as long as those are the other side of the barricade than the supposedly imperialist West. If conservatism applies similar double standards to autocrats paying lip service to conservative values, it deserves (and eventually will be confined to) a place in the dustbin of history alongside Jeremy Corbyn’s regressive left. Let us hope that it is not too late to prevent such an outcome.

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Dalibor Rohac is a research fellow at the American Enterprise Institute in Washington, DC.