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Section 4. Corruption and Lack of Transparency in Government

While the law provides criminal penalties for corruption of public officials, few such cases were lodged or prosecuted. The European Commission and NGOs contended that the government did not implement these laws effectively and that officials often engaged in corrupt practices with impunity.

Corruption: The European Antifraud Office (OLAF)’s annual report for 2017 released in June reported investigating 10 cases in Hungary related to the use of EU funds and recommended local authorities open criminal investigation in seven cases. Citing irregularities and conflicts of interest regarding EU-funded public lighting projects in Hungary, OLAF recommended local authorities open a criminal investigation into ELIOS, the projects’ primary contractor. In November the National Bureau of Investigation announced it found no evidence of a crime.

Anticorruption NGOs also alleged government corruption and favoritism in the distribution of EU funds. The Corruption Research Center Budapest (CRCB) identified several cases of bid rigging and other corruption risk indicators in public tenders with EU funding. The CRCB concluded that companies with close links to the government faced significantly less competition and were able to obtain higher prices when bidding for EU-funded projects. In March the European Commission’s country report on Hungary noted that during the previous year very limited progress had been made in strengthening transparency and competition in public procurement. The report also called for the Prosecutor General’s Office to pursue corruption cases more effectively.

Financial Disclosure: The law requires members of parliament, senior government officials, the president of the Curia and his deputies, and the prosecutor general to publish asset declarations on a regular basis. NGOs claimed required disclosures were circumvented by placing assets in the names of spouses, who are not required to file asset declarations. The vast majority of public-sector employees, including law enforcement and army officers, judges, prosecutors, civil servants, and public servants, were obliged to submit asset declarations, which are not accessible by the public. NGOs noted there were no criminal or administrative sanctions for submitting inaccurate asset declarations and asserted there was no effective method to detect violators.

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The Lessons of 1989: Freedom and Our Future