Despite the biggest corruption scandal ever known to the European Union, despite Hungary’s historic agreement with the EU, Transparency International deals exclusively with discrediting Hungary. The Brussels scandal provides ample reason for NGOs to scrutinse themselves and Brussels, but according to their latest analysis, this is not what they are being paid for: NGOs continue to serve the interests of big powers.
Earlier this year, the international organization Transparency International published the results of the Corruption Perception Index (CPI), which “traditionally” ranks 180 countries in the world, starting with the least corrupt one.
According to Transparency International’s corruption report for the year 2022, the social and political situation of corruption in Hungary has further deteriorated, making Hungary the most corrupt country in the European Union, with its corruption perception index of 43 points in 2021 deteriorating by one point by 2022. According to the organization’s measurements, this places Hungary in the 77th place in the world ranking, forming a tie with Trinidad and Tobago, Burkina Faso, Kuwait, the Solomon Islands, and East Timor.
The report says that in 2021 Hungary was the second most corrupt state in the European Union, but by 2022, according to the organization, it was the most affected country in the EU, where the fact of bribery characterises the operation of economic, political and official life. Denmark, Finland and Sweden are considered the least corrupt on the European list, while Bulgaria is considered the most corrupt after Hungary by a report made by Transparency International. Romania, also near the bottom of the list, received 46 points, but unlike Hungary, Bulgaria and Romania improved one point each compared to their score a year earlier (on a scale of 100, the lower a state scores, the more corrupt the public life of that country is rated).
The fundamental problem with the report is the methodology. Transparency International’s Central Secretariat in Berlin used 13 opinion surveys and analyst group evaluations from a total of 12 organizations to carry out its research. Since the CPI of 2012, the process of compiling an index has consisted of four steps: the selection of data sources, the standardization of data, the aggregation of standardized data with the formation of an average value, and the reporting of a measurement of uncertainty in the data.
The methodological description of the CPI provides superficial information. In order to set up the index, the level of corruption in the public sector in the states under review is “determined following the results of the measuring instruments, the surveys of experts and businessmen”, namely on the basis of the level of corruption infection prevailing in the state institutional system, economic life, and society, which can be justified by the fact of bribery. The description does not reveal how the probability of a state official, an official person, or an economic or political decision-maker facing the dangers of corruption or bribery is decided for each country. It is not clear to what extent the economic and administrative life of the given state can be based on corruption mechanisms according to the research.
The measurements of the index were not made on a representative sample, so it cannot correctly indicate the perception of corruption. The weighting of the measurement risks in the research suggests that only one party (state briber) can be the subject of corruption, while a private actor – possibly a foreign party – is not a potential participant in such phenomena. The validity of ranking and evaluation is also questionable because the CPI’s statistical methods are unable to distinguish random correlation from scientifically verifiable correlations. One of the most typical mistakes made in such research is to assume that if two measurement results correlate, then one causes the other, which is not necessarily the case. This also casts doubt on the comparability of individual countries on the basis of the CPI index.
It is no coincidence that in a 2013 article in the prestigious American news publication Foreign Policy, economist-writer Alex Cobham suggested that Transparency International should not apply the CPI, claiming that the Index carries a – markedly misleading – bias against elites, reinforcing popular perceptions of corruption and creating a vicious circle to incentivise inadequate policy responses. (Alex Cobham, “Corrupting Perceptions,” foreignpolicy.com, 22 July 2013)
Transparency International’s reports using this methodology paint the picture that the corruption situation in Hungary has been deteriorating in recent years. (In 2018, the country’s CPI index received the 46-point value, which now Romania, considered to be in a better corruption situation than Hungary, received.) The least corrupt countries in the world are Denmark (90 points), Finland and New Zealand (87 points), followed by Norway. At the bottom of the list is Somalia with a total of 12 points.
Parallel with the presentation of the CPI’s results, Transparency International Hungary published and presented its annual report on the corruption situation in Hungary on 31 January in Budapest, at the same time as the CPI data. The report provided findings on the state of the rule of law, public procurement, the use of EU funds, and the impact of domestic corruption on the economy in Hungary.
In the section of Transparency International Hungary’s report on Hungary regarding the distribution of EU funds and domestic public procurement states that “Despite Hungary being one of the biggest beneficiaries of the EU budget, the influx of EU funds has not contributed to an increase in efficiency or economic activity measured by the number of businesses, nor has inequalities decreased, while corruption has increased“. Furthermore, they also write that the total value of public procurement in Hungary last year broke a record, “while the concentration of and exposure to corruption of the public procurement system is significant.”
The above statement by the organization can be regarded politically brief and very difficult to substantiate. However, the public policy measure of recent years show the exact opposite of the situation they describe: education and training subsidies, the creation of new jobs, loans and capital programs, as well as specific family and pension protection measures and remission of taxes. The robust economic growth before the pandemic primarily benefited the middle class, but the minimum wage has also increased significantly for many years, and domestic poverty has decreased as incomes rise.
However, the results of the research, which indicate a further deterioration of the corruption situation in Hungary, can also be strange in the light of the fact that recently, on 22 December 2022, the European Commission adopted the partnership agreement with Hungary, which is connected to the recovery plan and the rule of law conditionality and related to the 2021-2027 cohesion policy. As part of this, in addition to strengthening administrative capacity, transparency and the prevention of corruption, the European Union is also willing to finance investments in the climate protection and digital switch-over for Hungary. By adopting the partnership agreement before 31 December, Hungary cannot suffer a loss of funds from the EUR 5.8 billion (HUF 2,300 billion) recovery funds it is entitled to. The European Commission also informed the public in an official communication that it believes our country is committed to the independence of the judiciary, since Hungary’s recovery plan, which has been found to be one of the best at EU level and therefore meets all relevant criteria and expectations, also includes reforms aimed at strengthening the independence of the judiciary.
In connection with Transparency International’s report attacking Hungary, it is also worth noting that for some reason the organization does not deal with corruption cases involving EU institutions – and NGOs – in Brussels and Strasbourg. In December, the corruption scandal, known as Qatar-gate, broke out, in connection with which, among others, one of the left-wing vice-presidents of the European Parliament, Eva Kaili, was detained in pre-trial custody. Belgian police also seized around one and a half million euros in cash and conducted at least twenty searches during the investigation.
The aforementioned former vice-president of the EP has been in prison since 9 December, after charges were brought against her following an extensive official investigation that sought to uncover the lobbying activities of the state of Qatar in Brussels in particular. Francesco Giorgi, the partner of Kaili, who is suspected of corruption, admitted that he was a member of an organization lobbying for Qatar and Morocco, which was used to interfere in the decisions of the European Parliament. The essence of Qatar-gate, which is just really unfolding, is that Qatar and Morocco could influence the EP’s senior officials, lobbyists, and their families in order to achieve the EP decision they wanted. In the centers of power of the European Union, many people may be involved in related corruption, money laundering, and organized crime.
Two Brussels-based NGOs, namely Fight Impunity and No Peace Without Justice, which have strong ties to George Soros’s Open Society Foundations (OSF) and other NGOs funded by the foundation network, may also be affected by this corruption scandal. Luca Visentini, General Secretary of the International Trade Union Confederation, was also arrested in the case. Between 2016 and 2021, the Confederation received more than six million dollars in grants from OSF, and the International Trade Union Confederation, together with Amnesty International, Human Rights Watch, and Transparency International – rapporteur of a new corruption report attacking our country – which are funded by the Open Society Foundations, are the main supporters of the advocacy organization Sport & Rights Alliance.
For example, former Italian MEP Pier Antonio Panzeri, founder of the NGO Fight Impunity concerned, is on an earlier list of George Soros’s allies in the European Parliament. And No Peace Without Justice received a total of €2.7 million for two current projects in Libya, but due to the scandal that erupted in December, payments of €1.37 million of the amount were suspended. (The operation of the organization has been supported by the European Commission with around six million euros since 2006.) The founder of the latter NGO is Emma Bonino, a former MEP, who served on the OSF Board of Directors from 2015 to 2018, and is also a member of the honorary board of the aforementioned Fight Impunity.
NGOs, including the professional organization Transparency International, should investigate their own scope of operation, their cooperating partners and supporters. Indeed, NGOs are, at best, funded to continue and carry out efforts to improve society in some way. Most donors prefer organizations that are credible and have financial clarity and transparency in their professional relationships. Therefore, NGOs, donor organizations and agencies should be increasingly vigilant for suspicious signs of corruption or other abuses in the projects and programs they fund, regardless of the type of support in these cases, or who or which organization can be the implementer or beneficiary of the support.
The Qatar-gate case clearly indicates that non-governmental organizations (NGOs) themselves are no more immune to corruption than other sectors or even individual states or governments. This can be particularly damaging for organizations, as it can have a spillover bad effect on reputation, credibility, and later on funding and donations. Credibility is one of the most critical factors influencing an NGO, which, in its simplest terms, means reliability and trustworthiness. For example, why do some people support national civil organizations that really work for the public? One of the main reasons for this is that the given organization represents such an authentic value system and professional level, which they know well and can trust based on their experience.
Thus, the issue of corruption is also important for the functioning of NGOs and they are therefore accountable to society. They must reduce the risks of corruption in international politics and also in international organizations of a non-governmental nature and sanction corruption cases within the relevant NGO, because this is the only way organizations can make it clear, even unquestionable, that they are actively fighting the practice of corruption. NGOs must make it clear within their own system that breaching their anti-corruption program will cost a lot because it puts their reputation at stake.
Without a good reputation, an organization loses the trust of donors and funders, as well as its partners and even its social target groups. Transparency International would only be able to be more credible professionally if it really adhered to this principle. The Qatar-gate scandal is increasingly challenging the independent opinion formation of and the public trust placed in NGOs that are supposed to be sensitive to corruption, especially considering that the scandal took place with the cooperation of NGOs.
Recently, evidence has been mounting that non-governmental organizations (NGOs) covering a significant part of their activities from foreign sources intend to gain an ever-increasing influence in the domestic political arena, overshadowing their former, purely human rights function. Similar entities in the United States are treated as foreign agent organizations, and their activity is closely monitored and subject to registration. Századvég Foundation is committed to national sovereignty, legal certainty and transparency. Therefore, in a monitoring system called NGO-radar, it continuously analyses the operation of the relevant organizations in Hungary.