THE LAW ON LOBBYING IN HUNGARY, AND ITS EFFECTS

1. THE LAW ON LOBBYING IN HUNGARY, AND ITS EFFECTS Dr. Zoltán Pogátsa University of West Hungary

2. THE ACT • Lobbying in Hungary is regulated by Act no. XLIX. of 2006 , aimed both at lobbyists and public servants, with the goal of highlighting interests that are present during the process of legislation and decision-making at central and local levels of government. Government regulation 176/2006 (VIII.14) outlines the implementation of the act that came into force as of the 1st of September 2006.

3. Registration • In exchange for registration, lobbyists receive certain privileges. These include: • They receive a lobbyists’ ID, which enables them to enter the premises of government offices at prearranged times; • They receive the right to present their case in front of the relevant committees of the National Assembly at a specified time and within a prearranged time frame; • They receive the same rights with regards to public servants appointed by the minister in case of ministerial decisions, and committees and local assemblies in the case of lobbying for local municipal decisions. These public institutions are obligated by the Act to guarantee as far as possible a personal presentation of their case by the lobbyist. • The lobbyist has the right to invite decision-makers to professional meetings, provide them with professional materials, send them scientific studies, preparatory feasibility studies and other lobbying materials; • The lobbyist also has the right to provide hospitality to decision makers to an extent that does not exceed one tenth of the smallest going wage . 

4. Criticism from civic sphere • One strong critique of the Act comes from the side of non-Governmental organisations (NGOs). While the act provides for professional, paid lobbyists to present their case personally, and even makes it possible for them to invite public servants, it does not provide for NGO representatives to come anywhere near public officials, and even the smallest extent of invitation might be considered bribery. This prompted a consortium of twenty-two civic organisations, led by the Society for Freedoms (Társaság a Szabadságjogokért – TASZ), to send a letter of protest to the Government and the National Assembly.

5. Criticism from lobbyists • The Act does not regulate associations of professional interest representation. Thus anyone can create an empty interest representation organisation with the hidden aim of lobbying. • The Act also does not regulate firms that are only partially engaged in lobbying and carry out other activities as well. • The list of possible targeted state organs is also not comprehensive enough. • The database of lobbyists does not contain the entity in whose benefit the lobbying takes place. Therefore it is not clear throughout the process on whose behalf the lobbying takes place. • Public firms owned by local municipalities can neither carry out lobbying activities, nor can they take advantage of lobbying activity by professional lobbyists.

6. Lack of Sanctions • The Act does not sanction public servants and decision makers who fail to report that they have been approached by lobbyists during the course of the decision making process. • The Act also does not sanction public servants and decision makers who fail to report that they have been approached by non-registered lobbyists!

7. Furthermore • a maximum penalty of ten million forints for non-registered or inappropriate lobbying can hardly be a deterrence when a the potential profits at stake might be measured in billions, or even tens of billions of forints. • The Act does not exclude past public servants from becoming lobbyists. Thus a public servant who leaves office today might become a lobbyist the next day. Lobbying regulation elsewhere often provides for an intermediary period of a few years during which the former public servant cannot engage in lobbying vis-á-vis his or her former workplace. • While the Act prohibits serving civil servants from being lobbyists, it does not curtail such rights for so-called ‘advisors’, who are not payrolled but are employed by state organs and local governments. This is a very grave conflict of interest since in recent years the number of such persons has exploded. A very large number of junior and middle level staff have been transferred to contractual status after various waves of government downsizing. These persons are de facto employees on a long term contract, with fixed office place, e-mail addresses and phone numbers. The only characteristic that differentiates them from their colleagues is their status. The other typical group of contractual employees are high profile senior staff. These people are not infrequently contracted especially with the aim of representing certain interests. Therefore the exclusion of both kinds of contracted public servants from the regulation leaves a very serious gap. • While the act limits hospitality by the lobbyist to one tenth of the going wage, it fails to regulate hospitality by associated entities, such as the beneficiary.

8. Lack of use • The database of lobbyists functions well, and is readily available online on the website of the Central Office of Justice without any password or special access privileges. As of March 2010, some 248 individual lobbyists have registered themselves, along with 44 lobby organisations. Regular quarterly reports on lobbying are also readily available on the same website, with details of what kind of contact was made by whom with which specific civil servants in what specific matters.

9. Scandals • Long list of corporate bribery scandals • Campaign financing

10. New Fidesz Government • Replaces lobby act with act on ‘participation in legislation’