HUNGARY PASSES NEW ANTI-CORRUPTION PACKAGE

UNCLAS BUDAPEST 000901 C O R R E C T E D C O P Y --SENSITIVE CAPTION ADDED SENSITIVE SIPDIS DEPT FOR EUR/CE - JMOORE E.O. 12958: N/A TAGS: KCOR ETRD PREL PGOV HU SUBJECT: HUNGARY PASSES NEW ANTI-CORRUPTION PACKAGE REF: A. BUDAPEST 787 ¶B. BUDAPEST 872 ¶1. (SBU) Summary: On December 14 the Hungarian Parliament passed a series of anti-corruption measures designed to reduce corruption in public procurements. The final vote was split down party lines, with near unanimous support from the governing Socialist party and near unanimous opposition from other political parties. NGOs, such as Transparency International, have expressed mixed views on the legislation. Given the partisan nature of the voting, however, it is unclear how effectively Fidesz, which is widely expected to win next April's general elections, will implement the new legislation. End Summary. ¶2. (SBU) On December 14, in a party-line vote, the Hungarian Parliament approved the Bajnai administration's anti-corruption package. The governing Socialist (MSZP) party cast 176 of the total 179 "yes" votes, and only two MSZP MPs voted against it. Of the three non-MSZP MPs who voted in favor of the legislation, one was a member of the center-left Free Democrats and two were independents. Not a single member of the center-right Fidesz party supported the measures. ¶3. (SBU) As post outlined in reftel B, the legislation consists of two main components. The first introduces legal protection and financial incentives for "whistleblowers" and outlines the channels they would follow in reporting corruption. The new Public Procurement and Public Interest Protection Office (PPPIPO),as established by the legislation, will coordinate the reporting process and take over many responsibilities from the Public Procurement Council. Even after the legislation's approval, however, the details of how responsibilities will be transferred from the Public Procurement Council to the PPPIPO remain unclear. The second main component of the anti-corruption package attempts to clarify the role of Integrity Pacts in public procurements (Note: An Integrity Pact consists of an agreement monitored by an NGO between the government and all bidders for a public contract in which the parties pledge not to engage in corruption. End Note.) ¶4. (SBU) Transparency International (TI) has urged the Hungarian government to adopt whistleblower protections and utilize Integrity Pacts in public procurements for the past two years. As such, it has played a leading role in placing anti-corruption initiatives on the administration's agenda and is well situated to assess the government's latest efforts. TI is most satisfied with the legal protection established for whistleblowers in the legislation. The head of TI Hungary, Noemi Alexa, commented, "The protection of whistleblowers is a major step forward; one which should have been made a long time ago." TI, however, is much less sanguine about the anti-corruption package's other measures. TI lawyers have privately expressed concern over the new Public Procurement and Public Interest Protection Office. TI never favored the creation of a new anti-corruption body, judging that a sufficient investigative and prosecutorial infrastructure, though underutilized, already existed in Hungary. When it became clear that the legislation would contain a new anti-corruption body, despite TI's concerns, TI pressed the government to make it part of the existing Prosecutor's Office. The final legislation, however, does not reflect TI's position. TI has also lobbied for an NGO-oriented monitoring system in public procurements, but the approved legislation does not produce anything qualitatively different from existing monitoring mechanisms. (Note: On December 7, TI expressed its concerns to the Prime Minister's Office about the draft amendments on Integrity Pacts. End Note). ¶5. (SBU) Comment: The new anti-corruption legislation is unlikely to have a significant impact on corruption in Hungary. The partisan vote further highlights the fact that political infighting still takes precedence over meaningful reform. With Fidesz widely expected to enter power after next April's general elections, it is unclear how effectively the incoming administration will implement the new legislation. End Comment. LEVINE