In Hungary, big trouble over little train

BUDAPEST — A routine trip by European lawmakers to Hungary to make sure EU cash is being spent properly has become the latest source of tension between Budapest and Brussels.

Members of the European Parliament’s Budgetary Control Committee, which is charged with ensuring proper use of EU taxpayers’ money, are in Hungary this week to visit several projects funded by the bloc.

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But their decision to visit a railway connecting two villages with links to Prime Minister Viktor Orbán angered the government, which accused the MEPs of seeking to interfere in Hungarian politics ahead of an election due in the spring.

“I find it particularly outrageous … that out of thousands of co-financed investments you happen to attempt to examine a project implemented in the own village of the Hungarian prime minister,” János Lázár, Orbán’s chief of staff, wrote to Ingeborg Grässle, the German MEP who chairs the parliamentary committee, last month.

When Grässle last led a fact-finding mission to Hungary, in 2011, the country’s national development ministry hosted a cocktail party in her delegation’s honor. Six years later, there were no party invitations, even though Grässle is from the same political family as Orbán (the European People’s Party).

On Tuesday morning, Grässle and eight other MEPs visited the Vál Valley Light Railway, just under an hour’s drive west of Budapest. The EU contributed €2 million (around 80 percent of the cost) to the 5.7 kilometer-long railway that connects the villages of Felcsút and Alcsútdoboz.

Felcsút (population 1,600) is where Orbán grew up and has a house, and is also home to a 3,500-seat soccer stadium. Alcsútdoboz has a population of around 1,400.

Critics of the Hungarian leader say the railway is purely a vanity project and is hardly ever used. The government says it’s a useful way to boost tourism.

As Grässle walked across fields to board the two-carriage train — which was brought out especially for the MEPs as it normally only runs in the afternoons in September — she stopped to take a picture of opposition activists holding a sign that read “Viktor Orbán became the richest Hungarian by stealing EU taxpayers’ money. The thief is Orbán, not the people of Hungary!”

The strong criticism of her visit attracted the attention not just of protesters but also of MEPs who hadn’t been planning to go on the trip.

“It raised the eyebrows of the some of the members [of the committee], and they said that there could be something fishy if the Hungarian authorities have a problem with us monitoring,” said one parliamentary staffer, who spoke on condition of anonymity.

The railway project was chosen because it’s “an issue which is in the Hungarian media, where the Hungarian media question the utility of the project, whether this was really well-spent EU money,” the staffer added.

The spat over the visit is the latest in a series of battles between Brussels and Budapest. The European Commission launched infringement proceedings against Hungary over the country’s law cracking down on foreign-funded NGOs. Hungary also refused to take part in a mandatory EU refugee relocation scheme, introduced laws targeting the Budapest-based Central European University, and sent a survey to citizens called “Let’s Stop Brussels!”

Within Hungary’s ruling Fidesz party, there are differing views of the delegation’s visit, which ends Wednesday.

“Some think the visit is a direct intervention in the election campaign to support the opposition’s allegations,” said a senior Fidesz official, who spoke on condition of anonymity. “But most of the Fidesz politicians I talked to think those people have simply overreacted.”

A spokesman for the Hungarian government declined to comment.

Corruption allegations

Hungary is one of the largest recipients of EU development funds. It was allocated €25 billion from the European Structural and Investment Funds program for the 2014-2020 period.

Any suggestion of misuse of that cash goes down badly with the Hungarian government. In January, Fidesz Vice President Szilárd Németh said in a television interview that Transparency International should be “swept out” of Hungary.

“Corruption is institutionalized in the Hungarian EU funds allocating system,” said Gábor Vágó, an anti-corruption activist singled out by Németh earlier this month as a security threat.

“There are several powerful groups” with ties to the ruling party that are benefiting from EU funds, said Vágó, adding that many EU-funded projects in Hungary contribute little or nothing to the country.

“There are at least two problems: one is overpricing,” said József Péter Martin, executive director of Transparency International Hungary, which claims that EU-financed projects in Hungary are valued at an average of 20-25 percent over the market price. “And the second is that there are some totally useless — or seemingly useless — investments.”

In a 112-page internal briefing document prepared for the delegation by the Parliament’s Policy Department for Budgetary Affairs, and seen by POLITICO, the connection between the Felcsút railway and Orbán is mentioned only in a footnote. However, the document does mention connections between projects on the delegation’s schedule and alleged corrupt practices by other Fidesz officials.

Prosecutor talks

While much attention has centered on the delegation’s visit to high-profile projects such as the railway at Felcsút and Budapest’s troubled Metro 4 (whose financing was described as having “serious irregularities — fraud and possible corruption” by the EU’s anti-fraud office, OLAF), of greater significance to some was a meeting on Monday with Hungary’s prosecutor general, Péter Polt.

“In our opinion, the prosecutor general’s office is a captured institution,” said Miklós M. Merényi of watchdog K-Monitor, who met with the delegation this week. “In many cases, they don’t investigate allegations regarding EU funds,” he said.

Members of the parliamentary committee’s delegation were not impressed by Polt, who has served as prosecutor general since 2010 after an earlier stint between 2000 and 2006.

“I was a bit disappointed with his statement,” said a policy adviser who was present at the MEPs’ meeting with Polt. “The answers were vague and poor,” he said, adding that they had expected more precise details and specific answers to their questions.

While several delegation members said the visit’s role was mostly symbolic, members of the Hungarian opposition hope the trip will be an eye-opener for MEPs.

“Many MEPs are very skeptical about what we say about corruption” in Hungary, said Péter Niedermüller, a Hungarian opposition MEP who traveled with the committee and represents the Democratic Coalition, a center-left political party that is part of the Socialists and Democrats group in the European Parliament. Corruption “is the basis of the political system” in Hungary, he added.

As they travel around Hungary visiting EU-funded projects, MEPs said they had been surprised by the government and media scrutiny of what they thought was a routine fact-finding trip.

“At every meeting, you can feel the politicized character of the topic,” said Estonian Green MEP Indrek Tarand. “We try to find as many hard facts as we can.”