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Any New Year’s resolutions Mr. Orbán?

Old habits die hard for Hungary's ruling elite.

Old habits die hard for Hungary’s ruling elite.

If anyone thought 2016 would bring with it a change in approach by Hungary’s ruling Fidesz Party they were sadly mistaken. The arrival of the New Year in Hungary has been marked by surging public discontent and street protests opposing proposed constitutional amendments that would provide the government with sweeping anti-terror powers.

Draft proposals leaked to the media suggest the government is seeking to amend the constitution by creating a new category of emergency: a “terror threat situation,” which, if declared, would enable it to issue decrees, suspend certain laws and modify others. Among some 30 proposed changes are controls on the internet, deployment of the army domestically, closing of borders and the imposition of curfews in areas affected by a terrorist threat.

Critics, including several opposition parties and civil rights groups, describe the vaguely defined “terror threat” legislation as a thinly veiled attempt by the government to clamp down on civil liberties. Unfortunately, the latest proposals represent the continuation of a longer term trend that has seen the gradual erosion of civil liberties under Victor Orbán’s Premiership.

The motivations for the ruling Fidesz Party’s authoritarian approach are complex, but one factor is undoubtedly the volatile and turbulent shifts the country’s political landscape has witnessed since the fall of communist rule in 1989. Viktor Orbán is the country’s only post-communist Prime Minister to have completed an entire mandate and be re-elected.

Part of this political turbulence can be attributed to the economic uncertainty the country experienced following the collapse of communism. As with the USSR and other soviet satellite state, the collapse of the communist regime in Hungary left a void in terms of institutional infrastructure and regulatory oversight.

This vacuum created a ‘wild west’ that offered fertile ground for wealthy individuals and speculators keen to exploit the absence of effective regulatory oversight and plunder the region’s resources. Hungary was no exception. Well documented, the now infamous Russian ‘oligarchs’ were quick to capitalize on the wealth of opportunities created by the collapse of communism. Less well known however are the Western entrepreneurs who also flocked to the region.

One of the most notable is Ronald Lauder the son of Hungarian Jewish immigrant Estée Lauder who successfully founded the family beauty-products empire. Lauder’s older brother, Leonard, assumed the helm of the company when their father, Joseph, died in 1983. Leonard subsequently took the company public, making him and his brother billionaires.

Seemingly lacking the business acumen of his brother, Ronald was keen to emulate his family’s success. Following a failed run for Mayor of New York, and his ignominious failure to secure the Republican nomination in 1989, Lauder presumably spotted his chance in 1994: his moment to step out of the shadow of his successful family, and establish his own identity.

Ronald set about establishing a string of commercial media and entertainment ventures across the former Eastern bloc countries. It all began to unravel, however, when it was revealed that a U.S. Attorney for the Southern District of New York was investigating Lauder’s television holding company, Central European Media Enterprises (CME), over allegations that the company had bribed state officials in Ukraine.

Perhaps most notably though was the media mogul’s dealings in Hungary. In 1996, Lauder was sued by his former business partner, Seymour Holtzman, for wrongful termination of their joint venture. Holtzman alleged Lauder had forced him out of their partnership in the Central European Development Corporation, the company he’d formed in Hungary in 1989. Describing Lauder, Holtzman explained to the Wall Street Journal that: “[Lauder] is mean-spirited …. He thinks he’s above everyone else.” The matter was eventually settled in court for an undisclosed sum.

But the Holtzman case was nothing compared with what was to come. In 1997, Perekhid Media, a Western-owned rival in Ukraine, brought a suit against Lauder and CME in New York, claiming that it had bribed Ukrainian officials, to essentially snatch from Perekhid a license which the company had obtained in 1993. Mr. Lauder had subsequently started a station called Studio 1+1 there using the license.

These questionable, some might say nefarious, business dealings by Western “entrepreneurs” help to demonstrate the aggressive business practices pursued by individuals across the Eastern bloc following the collapse of communism and help to illustrate how the economic turmoil fueled by the West has helped foster a culture of paranoia and an eagerness to hold on to power among Hungary’s political elite.



Juan Garcia

Juan Garcia is a freelance researcher for the Center for Media Transparency. Born in South America, he specializes in media freedom and plurality, particularly in the former USSR.