Reports voice fears new gov’t foundations to be used to hide public money

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Under an amendment passed last week, the Hungarian government will be able to establish foundations which experts fear could be used to conceal public money, online news portal napi.hu reported today. The amount of money such foundations can handle, and how people can be appointed to their advisory boards, is not specified, according to the daily.

As opposed to civil initiatives, the foundations to be established by the government would be registered in fast-tracked procedures under the amendment, according to online news portal mno.hu. The portal noted that in 2006, the then ministry of finance abolished similarly operating so-called public foundations of the time as the ministry said they had become the main channel for hiding public money.

There are no emergency situations that the Hungarian government would not be able to solve without establishing such foundations, Miklós Ligeti of Transparency International (TI) told mno.hu. He said the amendment raises concerns that such foundations could work as their predecessors abolished ten years ago had done, a suspicion further elevated by what he termed the “bad example” of foundations of the National Bank of Hungary (MNB).

Ligeti stressed that the new legislation, which has not yet taken effect, does not specify what aims the government can establish such foundations for, nor any cap on money to be granted to the foundations. He added that the new legislation makes it possible for government-initiated foundations to be registered in fast-track procedures.

“The new legislation gratuitously favors government-established foundations,” Ligeti was reported as saying by mno.hu. “It is as if government foundations would be advancing in a bus lane, while real civil foundations lag behind in a traffic jam,” he added.

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