Átlátszó fights to expose public media spending

Amid steady budget increases and cuts to public media staff, Hungary’s public media management fund, the MTVA, has been outsourcing production to private firms with close ties to Hungary’s ruling Fidesz party, according to an ongoing investigation by pro-transparency investigative reporting NGO, Átlátszó. The group, which has been working to uncover the MTVA’s spendings since 2011, has published a series of reports based primarily on leaked documents that detail the MTVA’s outside contracts with Government-linked private companies and individuals to produce programs for Hungary’s public media.

Átlátszó has been at the forefront of an effort to expose the MTVA’s spendings and contracts with Government-linked firms, as part of its wider investigation into the growing dominance of Fidesz-associated companies across various markets, including commercial media, since 2010.

For more on changes to Hungary’s public media system under the 2010 media laws, see the CMCS study, Hungarian Media Laws in Europe.

The group  has initiated multiple lawsuits against the MTVA for access to records of the public media body’s budget and spending, as a result of the MTVA’s unwillingness to respond to the Átlátszó’s freedom-of-information requests for the data. While the MTVA maintains it cannot reveal its contracts with private companies on grounds it must protect trade secrets (see list of cases below), Átlátszó argues that state-allocated funds should be transparent and publicly available, and that the MTVA is shielding its expenditures of public money to Government-linked firms. A number of first-instance courts have so far have agreed, ruling that the MTVA must disclose the data. The MTVA has consistently appealed the first courts’ rulings, resulting in protracted legal battles between Átlátszó and the MTVA.

Átlátszó’s fight to expose the MTVA’s spending highlights concerns over body’s secrecy in dealing with public funds, as well as broader issues raised by numerous critics over the restructuring and centralization of the public media system as a result of the 2010 media laws. The MTVA, which is directly managed by the Media Council, is responsible for overseeing the public media’s state-allocated funds as well as for content production and program purchasing.

The MTVA’s annual budget has steadily grown by more than 20 percent since the body was formed in mid-2010—from HUF 64 billion (roughly EUR 221 million) in 2011 to 78 billion (roughly EUR 270 million) in 2013. Budgetary increases have coincided with mass lay-offs of more than 1,000 public media staff, which the MTVA says is necessary to trim the country’s bloated public media system. But opponents say the MTVA’s staff cuts have targeted primarily left-wing journalists as a means of purging Hungary’s public media of reporters who are critical of the government’s policies. These lay offs have also come amid reports that the body been outsourcing production to some pro-Government companies. 

As Átlátszó’s legal cases against the MTVA cycle through the Hungarian courts, the group has been publishing leaked documents which show what Átlátszó describes as the MTVA’s preferential treatment to several companies with strong ties to Hungary’s governing party. In March, the group leaked the MTVA’s 2012 budget, which shows major payments to Fidesz-linked firms and individuals.

Átlátszó’s investigation of the 2012 MTVA budget  also revealed that the body paid HUF 122 million (roughly EUR 405,000) for programs produced by Dextramédia Kft., a company said to be responsible for making a pro-Hilter video for a far-right nationalist Internet TV station in 2011. According to Átlátszó, the MTVA paid the company to produce two programs for Hungary’s public TV station Duna TV in 2012. As reported by ATV, the owner of the domain name of Dextramédia also owns N1 TV, and Dextramédia and the neo-Nazi group, Sixty-Four Counties Youth Movement, share a common IP address. News portal Hirszerzo in 2011 reported that one of the owners of Dextramédia, Zoltán Moys, is the son-in-law of Sándor Lezsák, who is currently a deputy speaker of the Hungarian Assembly representing Fidesz.

Átlátszó’s prior reports detail contracts given to filmmaker Gábor Kálomista, whose wife, Zsuzsanna Kálomista is the Film Procurement Director at the MTVA, and to László Jáksó, whose company received HUF 841 million (EUR 2.8 million) for the show “Marslakók” that never aired. Jáksó is a friend of Árpád Habony, chief counselor to Prime Minister Viktor Orbán, according to Átlátszó.

Some key highlights of Átlátszó’s battle with the MTVA to disclose the body’s outside contracts follows below:

Public media contracts should be published – first decree verdict says

February 19, 2013: Átlátszó filed a freedom-of-information request to the MTVA to learn about production and transmission rights and occasional amendments to the contracts of several TV shows and documentary series. The MTVA denied the request, saying the information was a trade secret and intellectual property.  According to Budapest Tribunal court’s first decree verdict, the MTVA has to disclose the requested documents. The MTVA has appealed this decision. Watch the video of the hearing (in Hungarian) 

Atlatszo.hu leaks secret amendments of HUF 841 million contract

February 7, 2012: Átlátszó published the MTVA’s contract with producer László Jáksó’s film company, which documents budget details of the state-funded production of “Marslakók” (“Martians”), for which the government reportedly paid HUF 841 million (EUR 2.8 million). In September 2011, Atlatszo.hu filed a freedom-of-information request for the data but MTVA refused to release the contract. While the court battle to obtain the documents continued, the information was leaked to Atlatszo.hu through the MagyarLeaks whistle-blowing platform. Read the original article in Hungarian.

Court rules MTVA must publish contracts

February 1, 2012: The Budapest Metropolitan Court ruled that the MTVA is obliged to comply with Átlátszó’s request to disclose contracts related to the purchase of the new National Television buildings, which were built several years ago by a private company and then leased to the state. Prior to the court case, the MTVA offered to show the documents to Átlátszó if the organization signed a confidentially agreement, according to Átlátszó, but the group refused to comply with this arrangement. The MTVA later claimed in court that the documents are trade secrets and it would be a national security risk to disclose the documents public.

After losing the first- and second-instance court cases, the MTVA published the contracts on its web page.

Simicska’s companies favored by the MTVA

December 4, 2011: Átlátszó obtained documents showing that MTVA circumvented the usual bidding process in awarding a contract worth HUF 104 million (roughly EUR 360,000) to advertising companies with ties to Fidesz-linked business mogul Lajos Simicska. As a result of a successful freedom-of-information lawsuit by Átlátszó, the MTVA was forced to reveal documents showing that the Fund used a simplified bidding process, which is allowed when the value of the contract is less than HUF 25 million. In this case the bid was just under that amount, at HUF 24.96 million.

Two weeks after the bid was won by Publimont Hirdetésszervező Kft. and Euro Publicity Kft., the above-mentioned firms with ties to Simicska, the contract was modified and increased to HUF 104.56 million (EUR 360,000). The contract modification was justified on the grounds that “given the number of advertisement placements quoted in the original contract, the required results could not have been achieved.” However, according to Átlátszó, the number of advertisement placements offered by the Publimont-consortium to supplement the original contract is exactly the same as the number published by MTVA after the procurement process: 800 lighted posters and 800 billboards in Hungary, 100 billboards in Romania and 96 billboards in Slovakia, and three advertisements on public transportation vehicles.