Madam Ambassador’s Démarche (abridged text of speech)

The United States understands that Russia is an important energy supplier—it will continue to be important in the future. But Russia and all suppliers—including the United States, by the way—should compete at market rates, on market terms. No nation should be kept dangerously dependent on any single source for its energy needs. 

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We also share an interest in improving the investment climate in Hungary. American investors I’ve spoken with are attracted to Hungary’s high-quality infrastructure, its highly educated labor force, and its central location. But some tell me that significant obstacles to investment remain. Foreign direct investment in Hungary has not reached its full potential in recent years. And some investors are concerned about stability in the tax and regulatory environment. I was in business for more than two decades, and I know from experience that the links between good governance and the prospects for economic growth are very clear. Companies will invest where there is transparency and predictability, where there are free, fair, and transparent market conditions. Investors must be able to predict regulatory and tax effects on their businesses. Otherwise, the costs of uncertainty will price many potential investors out of a market.

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Corruption stalls growth, stifles investment, denies people their dignity, and undermines national security. Corruption in Hungary is a serious concern—quite clearly a top concern of average Hungarians, as I have heard, and as public polls consistently show. Wherever systemic corruption has effectively undermined fair governance, it creates an environment ripe for civil unrest, resistance to the government, and even violent extremism.

How do we combat corruption? By reforming government procurement systems, by holding elected officials accountable, including requiring elected officials to disclose their assets. And by building trust with citizens by allowing open access to information that directly impacts them.

In this light, the global fight against corruption means we take seriously what Hungary and others in this region do to prosecute corruption—and what they do to hold officials accountable. The best way to restore public confidence in the rule of law, and to show that the playing field is level, is to publicize those prosecutions: the names, the crimes, the indictments, the dollar amounts seized, and the convictions and penalties.

Public knowledge would help build a bridge of trust with all citizens, across the political spectrum, from every walk of life. Just as it would change the game in the energy sector if members of the public could see the details of the Paks II nuclear deal. We look to the Hungarian government to increase transparency, starting with the details of this deal. A free, fair, and open energy market will make a difference. Extreme secrecy within your government goes against the spirit of transparency laws. 

My colleague, Hoyt Yee, the Deputy Assistant Secretary of State who works closest on Hungary, spoke to the House of Representatives Foreign Affairs Committee in May, and underscored our government’s concerns about the state of checks and balances and democratic institutions in Hungary. Increasing centralization of power creates conditions that mean that many of the big decisions that will impact Hungary for generations to come remain opaque, and it means that decisions are taken without any opportunity for those who will be affected—the stakeholders—to express their views, concerns, reservations, or even support. We, along with international organizations and other friends of Hungary have raised these concerns persistently over the years—and we will continue to raise them.

An independent civil society sector is a cornerstone of a functioning democracy. Our focus on the conditions for civil society organizations is not unique to our relations with Hungary—this is worldwide U.S. policy—consistent with our global emphasis on the health of democratic institutions. Wherever governments introduce restrictions on civil society organizations, to restrict the space for voices that might differ, we do not see a truly free society. 

A government crackdown on the freedom of several NGOs to operate in Hungary began in 2014, and it has continued this year as well—with persistent audits and investigations. Last year, government officials openly accused several human rights and watchdog NGOs of supporting the opposition and being foreign agents. At one point, there were more than 50 NGOs being audited by the government, including all of the most prominent human rights watch dog organizations and independent civil society advocates. Fortunately, the Hungarian justice system has provided some protection for the targeted NGOs. A Hungarian court in January ruled that a police raid on watchdog NGOs last year was illegal. Last week, the authorities ceased the criminal proceedings against the NGOs, finding that the NGOs were not engaged in criminal activity. Yet the situation is not fully resolved. Four NGOs are still facing the threat of having their tax licenses suspended; seven NGOs continue being subject to tax audits; and the police have not returned the equipment seized from the NGOs during the criminal investigation. The chilling effect of these governmental investigations is widespread, and it casts a long shadow on Hungary’s reputation in the international community. We urge an immediate end of heavy-handed tactics against civil society organizations.

Linked directly to the ability of civil society organizations to breathe freely is the independence of the judiciary and a free press. An independent judiciary, particularly a constitutional court, is crucial to the healthy functioning of a democratic system. I have mentioned one positive example where the Hungarian judiciary played an important role in upholding Hungarian law with regard to civil society. Courts in every country play a decisive role in defending the rule of law and the separation of powers. They are the protectors of constitutional rights against the whims of short-term political interests. The amendments made to the Fundamental Law here over the last few years have diminished the independence of the Hungarian Constitutional Courts, which have played this critical role here in Hungary since the regime change. Just as one example, the process for appointing judges to the Constitutional Court used to require the agreement of political parties. But not anymore. And Constitutional Court justices are constrained from ruling on the merits of amendments to the Fundamental Law—a restriction that overturns the very checks and balances necessary for an independent judiciary. 

Let’s talk about media freedom. Hungarian politicians, intellectuals, and members of civil society speak of a marked decline in press freedom. This decline limits discourse and discussion of matters of importance to the Hungarian people. Freedom House now categorizes Hungary as only partly free in the area of press freedom following a five-year decline. Let’s be clear—Hungary is not a place where journalists are jailed and tortured, and we are not suggesting this is the case. But rather, the concerns we have take the form of concentrated media ownership and pronounced subsidies to state media. These subsidies have the potential to profoundly distort the media business landscape, raising the barrier for any new voices to enter the media market and driving smaller outlets to the brink of insolvency. There is also further control exerted over print and television outlets through choices to channel advertising to specific entities. Individuals have taken advantage of the very low legal thresholds for filing civil—and criminal!—slander and libel lawsuits, which can further economically damage outlets that are perceived as critical of the Government. The Media Council, which should be an ombudsman standing up for an independent press, is filled with appointees from just one political party. 

Free media is essential for an informed electorate that feels invested in the political process. And the United States shares the international community’s concerns about that process. I understand that Parliament is working to pass changes to the election law in keeping with OSCE recommendations, and the United States supports and welcomes that movement. Those recommendations go to the heart of the matter: they call for changes to campaign finance to provide more transparency and fewer opportunities for corruption, and they make key changes to the way district boundaries are assessed and redrawn and they change the way thousands of voters outside the country are able to cast their ballots. We invented the word “gerrymandering” in the United States, and we will be the first ones to cast a critical eye on ourselves, but that does not mean that we cannot appeal to our friends like Hungary to also aspire to upholding democratic ideals.

Of course, migration is on the mind of everyone in Hungary. In the past year, with record numbers of migrants and refugees seeking safety away from Syria and other areas of conflict, Hungary has faced difficult choices. As I have said before: every sovereign nation has the right to protect its borders. But every nation, as a part of the international community, also has a fundamental obligation to help refugee populations seeking safety. Words of intolerance and xenophobic characterizations of refugees—some of the world’s most vulnerable people—as invaders and antagonists have no role in our efforts to find a solution. The choice of some to use this rhetoric is puzzling, because Hungary is better than this. The Hungary I know is strong enough to see possibilities, not imply threats. The Hungarian nation’s sense of itself is not so fragile that it can only be defined by its enemies or by threats. Hungary is strong enough to define itself by its best attributes, by the best achievements and contributions of the Hungarian people and the proudest moments in your history. Your bravery as a people was never defined by the attributes of your adversaries, but by your own strengths and determination. 

Hungary should be strong enough to help to lead within the European Union, to come up with a comprehensive, practical, and compassionate solution to this crisis. We commend the humanitarian spirit of Hungarian leaders, law enforcement personnel, and other citizens who are responding to this crisis with generosity and compassion. We continue to stress that any resolution to these migration challenges should focus on saving and protecting lives, ensuring the human rights of all migrants are respected, and promoting orderly and humane migration policies.

I also want to take this opportunity to applaud the leaders of the Hungarian government who have objected to raising a statue of Balint Hóman in Szekesfehervár. His legacy as a proponent of some of the most venomous anti-Semitic legislation in the pre-war era casts a long shadow over the memory of those Hungarians victimized and killed during the Holocaust. Szekesfehervár, already a magnet for U.S. investment as well as other international companies, and the proposed site for a new NATO Force Integration Unit headquarters, should do better, than to raise tribute to this man. 

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