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Business

Hungarian radio scandal highlights lingering corruption problem

The closing of radio stations by the Hungarian government has raised new concerns about corruption. Ambassadors of nine wealthy nations, including Germany, have warned Hungary that foreign investors could be scared off.

A hand slips an envelope of money into a jacket pocket

Hungary has admitted it has a corruption problem

Last week listeners to Hungary's only two nationwide commercial radio stations suddenly found themselves having to tune into a different channel. The country's national broadcasting authority, ORTT, had unexpectedly pulled the plug on Slager Radio and its smaller rival network Danubius Radio.

Their frequencies were given to two broadcasters with close ties to the ruling Socialists and the main center-right opposition party Fidesz. ORTT president Laszlo Majtenyi resigned in protest.

Shortly before the US-owned Slager station went off-air, managing director Edina Heal told her listeners that authorities had misused their power.

“Dear friends, this is a sad day” she said. “After 12 years Slager Radio will have to leave. We will fight this decision because it is fundamentally flawed, and our millions of listeners deserve better.”

Standing firm

But the governing Socialists and the opposition Fidesz party are not impressed by Heal's cries for justice. They have been uncharacteristically united in defending the decision to ban the station from the airwaves.

Fidesz said politicians demanding a parliamentary investigation represent only narrow foreign economic interests. But that is at odds with data provided by US-based Emmis Communications which won the broadcasting licence for Slager Radio in 1997.

An old radio

Hungary's radio listeners are up in arms about the change in broadcasting

The company said it invested 170 million dollars in Hungary, employed an all-Hungarian staff and operated in "a completely transparent and politically non-partisan manner."

Emmis submitted a license-renewal application in late September, promising 11.5 percent of net revenue as a license fee. Danubius Radio's operators pledged 15 percent.

But rivals offering between 50 and 55 percent of revenue won the bids. Media observers, however, believe they will funnel money to political parties rather than putting it into the public purse where it belongs.

The broader picture

This is not an isolated case. Earlier this week ambassadors of nine wealthy nations including Germany and France met with Hungarian Prime Minister Gordon Bajnai to express concern about the situation. He admitted that his country has a transparency problem.

Hungary's Prime Minister Gordon Bajnai

Hungary's Prime Minister Gordon Bajnai

"I have assured the ambassadors that my government will immediately investigate any complaint relating to foreign investments,” Bajnai said.

The talks followed an open letter from the embassies of the nine countries denouncing "non-transparent behavior affecting investors in such areas as public utilities, broadcasting and elements of the nation's transport infrastructure."

Western ambassadors have warned Hungary that slow progress in curbing corruption could discourage foreign investment at a time when the country, still reeling from the global financial crisis, most needs it.

Author: Stefan J. Bos (tw)

Editor: Kyle James

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