The Hungarian Government Became Hostage of Its Own Propaganda

In this conversation with RevDem Editor Robert Nemeth, Hungarian journalist Szabolcs Panyi talks about the Hungarian government’s response to the war in Ukraine, why it is not willing to counter Russian infiltration in Hungary, the reasons behind the anti-US sentiment of Prime Minister Viktor Orban and his inner circle, and anti-Western propaganda in Hungary. He also discusses how being targeted by the Pegasus spyware impacted him.

Szabolcs Panyi is a Hungarian investigative journalist focusing on stories about national security, high level diplomacy, corruption and abuses of power. He received the Hungarian Quality Journalism Award and the award for the country’s best investigative articles three times each, and he was shortlisted for the European Press Prize in 2018. He’s a co-founder of the nonprofit Independent Cross-border Journalism Initiative, and he was a Hubert H. Humphrey fellow at the Walter Cronkite School of Journalism and Mass Communication at Arizona State University. He works for Direkt36, a nonprofit investigative journalism center in Hungary with the mission to expose wrongdoings and abuses of power.

Robert Nemeth: One of your latest articles you co-wrote with Andras Szabo was entitled “Inside Viktor Orban’s Response to the War in Ukraine“, and it uncovered what was going on in the government circles before and after the outbreak of the war. In Hungary, we know that government representatives and officials of the governing party are very unlikely to talk to journalists. How could you convince them to talk to you? What motivates them to talk to you?

Szabolcs Panyi: It is my job to obtain information about what’s going on in Hungary. And, so far, it seems that it’s only in the government where important decisions are being made. So, my main objective is to try to find out what is being said at closed-door government meetings, what the Prime Minister is telling his own people, and also what kind of drafts and proposed decisions there are about the future. So obviously, the people I need to talk to are people who are either at the table or people who were briefed about these discussions. Sometimes you cannot find even people working for the government, but, for example, people working in business, people working for the Fidesz party, opposition politicians, or diplomats who themselves were not there at the table where the decision was being made, or where some remarks were said by the Prime Minister, but they were briefed by those who were there.

This can happen in an official capacity. For example, there’s a readout of what was going on, for example, between Vladimir Putin and Viktor Orban. There have been readouts from both sides, from the Russian side and the Hungarian side, and a larger circle of people were told at least a couple of details of what was discussed there.

Also, there are people who are unofficially receiving information because their friend was there, or Orban told something to a close circle of confidants and the source is close to one of the confidants, for example. So, it’s a very slow process to actually try to locate those people who have some information. And then, of course, after that, there’s an even longer process of trying to confirm that kind of information, because we don’t publish hearsay or gossip. We need to confirm especially more sensitive information from at least two independent sources. This is a ground rule, but it’s much better if you have, for example, a memo about that meeting or any kind of written information that we can obtain.

You were one of the Hungarian journalists targeted with the Pegasus spyware last year. First of all, how did it affect you? What did you think when you found out that you were targeted with it? And on the other hand, how did it influence your relationship with your sources?

This is a question that I received a number of times since we broke the Pegasus surveillance story. I have to admit, I freaked out when I was told about the fact that my phone was analyzed, and this so-called forensic analysis came back with a positive result that the Pegasus spyware traces were found on the phone. So, I freaked out because I thought, oh my God, what’s going to happen to my sources, or what could have happened to my sources? So, my instant reaction was that people could have gotten into trouble because of me. They could have gotten fired or even persecuted.

Fortunately, I didn’t receive any kind of information regarding persecution, but what I know is that a couple of sources disappeared. It is very hard to tell whether they disappeared because our communications were discovered and they’d been contacted by the intelligence agency or by some people working for the government who told them not to contact me anymore, or because there was some other reason, like they were just not interested in giving tips or leaking documents.

To me, it’s pretty obvious that although I was targeted with this spyware and although my phone was infected with the spyware, the government and the intelligence agencies working for the government were mostly interested in my sources.

They were mostly interested in the people, some of them obviously working *for* the government. They were interested who those people are who are leaking information to this journalist, which are then of course turned into investigative stories, and some of them create smaller or bigger scandals. So, source protection is the real issue here for me, and it still is. Obviously, even before I tried to do everything to mitigate these risks because even before the Pegasus scandal broke, I received friendly warnings that I could have been under surveillance.

I tried to do my best to keep the identity of my sources in secret, to use encrypted communications, but the real problem here with Pegasus was that it could crack the encrypted communications, meaning WhatsApp or Telegram or Signal or Wire, you name it. So obviously, after this experience, what I learned is that I have to rely more on offline methods. Meeting people without our phones on the table, not really taking notes in my laptop, just using handwritten notes, being cautious about what kind of devices, what kind of routers, what kind of defined networks I use. Obviously, this does slow down the whole reporting process because there has to be a lot of security measures taken into account. But this is the only way to move forward.

I think it was also important for me to be transparent about the fact that there is an associated risk for anyone who wants to contact me as a potential source, anyone who has a tip or anyone who has some document that that he or she thinks could be interesting to me. There’s this risk that I could be under surveillance, and if they are contacting me, they could also get compromised and probably could get into trouble.

But I hope that in the end I didn’t lose more sources than how much I gained, because of the type of bigger name recognition that this whole scandal brought me. I’m not complaining because I still got to write stories. I still receive information that is newsworthy. There are scoops; some of them result in scandals. So, we’ll see how it will play out in the long run.

Turning to the path of the Hungarian government after the outbreak of the Russian war in Ukraine: what was the most surprising element for you that you learned when researching this story?

Well, there were a couple of things. The most shocking was that, regardless of what Viktor Orban later claimed during a live interview in Berlin—that he instantly felt when meeting Vladimir Putin on February 1st this year that there was something wrong going on, and that he instantly alerted the Secretary General of NATO—this doesn’t seem to be true, because during our reporting process we talked to lots of people, some of them also in the Prime Minister’s orbit or people who were briefed about this meeting between Orban and Putin.

They told us the exact opposite, that Orban was convinced that Putin was not going to launch an attack on Ukraine, that it was not a risk.

If you just search Google about what all kinds of pundits working for the government were saying about the risks of war breaking out, they were essentially ridiculing those who were cautioning the whole world that there’s an increasing chance that Putin would actually invade Ukraine. They especially ridiculed the United States. So, it was really, really shocking to see the lack of information that the Prime Minister’s circle had.

Also, we obtained information about certain meetings with heads of the Hungarian intelligence and heads of the Hungarian military intelligence. We also know what was said at those meetings. Basically, to sum it up, they said there was essentially very little chance that Russia would actually try to launch a full-scale invasion, and that there was an even smaller chance that the capital of Ukraine, Kyiv, would be attacked. They also said that there could be some hostilities, some war activities in the eastern part of Ukraine, but nothing big. Of course, this is not what happened. This is important because this is the same information that, for example, the Prime Minister uses when he’s making a decision. He thought until the very last minute that Putin was not going to invade.

The other shocking thing was that, as I mentioned, especially pundits working for the government were ridiculing the United States, calling them war mongering, fear mongering, because the US and the Biden administration had been for many, many months warning the public that Russia was about to attack Ukraine. One would have thought that after these warnings were validated by reality that the Orban government would change course. But quite the opposite. This whole anti-US Sentiment that’s really internalized, not just by the Prime Minister but by his inner circle, this was still present after the war broke out.

It seems that regardless of the fact that Putin essentially lied to Orban when they met on February 1st, for some reason, the Hungarian government still trusts the Kremlin more than Washington.

You mentioned this anti-US sentiment in the Prime Minister and in his circle. But what do you think is the reason behind it? Why does Viktor Orban and his inner circle have such an animosity towards the US while the US is Hungary’s ally?

Well, that’s a really good question. This is something that I’ve been interested in, and probably one day I’m going to write a longer article on this. What I know is that there’s a history to this phenomenon dating back as early as 2001. Viktor Orban was essentially treated as a black sheep within the Western community because of his reaction to 9/11. There was a far-right leader in the Hungarian parliament named Istvan Csurka who made some remarks in the Parliament saying that the US deserved this attack and US diplomacy really wanted Orban to condemn Csurka in public and say that this is unacceptable. He refused to do that because of domestic political reasons. He didn’t want to alienate the voters of Csurka’s far-right party.

Also, the Hungarian government last minute cancelled the deal of buying F-16 fighter jets from the US. Instead, they opted for Swedish-made Gripen fighter jets. Later it was turned out that a lot of corruption, bribery, kickback money was also involved in that process. Of course, that also didn’t play well with the US administration back then.

Most recently, since 2010, Viktor Orban has been visibly upset by the fact that the consecutive US governments have been criticizing either his crackdown on the rule of law or free media in the country—this mostly happened under the Obama administration—or later his relationship towards China.

For example, his refusal to accept that Huawei, the Chinese company manufacturing 5G technology and participating in lots of mobile networks as a vendor of 5G equipment, poses a national security risk. Huawei actually became one of the most important Chinese investors of the country. They have a huge manufacturing base in Hungary. So, even with the Trump administration, there were tensions because of this. Also, Orban not only dislikes the US, but also he’s quite openly talking about the fact that he doesn’t think that the US has a solid Central Europe strategy. He doesn’t think that the US cares about Europe at all. Essentially, when you’re a leading small country that’s stuck between the West and the East, you cannot really rely on such a partner where just a change in administration results in a completely different foreign policy.

Back in, I think it was 2008 or 2009, when the incoming Obama administration canceled previous plans laid out by the Bush administration to install the so-called Patriot missile system in Poland, which was an initiative to try to deter Russia, the Obama administration was experimenting with the so-called Russian Reset. They wanted a closer relationship with Russia. They thought that Medvedev and Putin were sensible men, and they could talk to them instead of creating tensions through sending more troops and military equipment to Europe. That there was a way in diplomacy to move forward. And, of course, this was a mistake. But also, this was a signal to Viktor Orban’s government—actually Orban was in opposition back then, but he was preparing to come back to power—this signaled to him weakness, and he thought that if the US is so fast in just withdrawing in a national security perspective from Central Europe, then they are not a reliable partner, and then Hungary in the long run has to deal with Russia, has to make a pact with the Russian leadership because they are here to stay and they are not backing down like the US sometimes does.

So, there’s more to this than him believing that Donald Trump would be an ally.

Of course. There’s much more to that. And also, I didn’t mention the so-called visa ban scandal back in 2014 when Hungarian government officials were banned from entering the US because of alleged corruption. That was essentially the low point of the transatlantic relations. As far as I know, it really did freak out the Orban government. So, there’s also a fear that the US is collecting information, if not intelligence, about the Orban government’s certain members, cabinet members, and businessmen connected to the Prime Minister and all their financial activities, and they think that US poses a threat because of that.

But Orban and his circles do not only cherish animosity towards the US, but also a general anti-Western sentiment. And if you take a look at the propaganda machine of the government, it’s quite obvious. What’s the reason behind this? What do you think?

There are many origins to this anti-Western sentiment that you mention. One is that one of the previous closest confidants of Orban was Gyorgy Matolcsy. He was the number one guy when it came to economic policy, but also he’s more of an ideologue, and it was his belief after the great economic crisis of 2007 and 2008 that the West is in a decline, Eastern countries such as China are on the rise, and that there’s going to be a new financial system in the world where China is going to play a leading role.

Of course, when it comes to government policy, how you implement this ideology means that you have to lure in more investment from Eastern countries, and also you have to establish a closer diplomatic relationship with these countries who also tend not to be pretty democratic. So, there’s this origin to it.

Also, there’s the fact that the Orban government has been widely criticized mostly by European Union member states, usually it was the Scandinavian countries or the Benelux countries, and also the US; meanwhile, of course, you didn’t hear any kind of criticism when it came to human rights or free media from the leadership of China or Russia.

So obviously, when selling to the Orban voting public these developments it was much easier to portray Western leaders as evil, decadent, out-of-touch, corrupt, and Eastern leaders as honest, conservative, value driven, etc.

But I think, and especially when it comes to the war in Ukraine and the reaction of the Orban government to it, they partly became hostage of their own propaganda because they’ve been essentially brainwashing their voters into believing that Putin is the good guy here and that he’s not going to launch a war. So, when reality is defying your propaganda for many, many years, you cannot just backtrack. You cannot flip flop in a matter of hours when it’s all over the news that Russia has launched an attack.

Also what I wanted to mention, it’s really interesting to see the comments on Facebook, especially when, for example, President Katalin Novak who’s visibly tasked with representing a more pro-Ukrainian face of the government is saying something condemning Russia or recently when she traveled to Kyiv. You see hundreds of comments from diehard supporters of the governing party essentially raging and telling nasty things to Novák that she betrayed Fidesz and Hungary.

So, this is why I say that Fidesz became, to some extent, a hostage of its own propaganda, because they’ve been for many, many years telling their own voters that Russia is the good actor, the US and the EU are the bad actors. You cannot really change that in a matter of days, weeks or months. So, they had to carry on with these communication panels. And, especially since the war broke during the last phase of Hungary’s election campaign, it was more sensitive. It was a more sensitive situation domestically, and they just couldn’t change course. Right now, I guess it’s just too late.

So, you say that the regime has been successful in selling its own version of the war to the Hungarian public?

Absolutely. I mean, they have also been successful in selling other types of spins and slogans which have even less attachment to reality.

Do you think that the people working in the government apparatus, in the higher party circles or even close to Orban, actually believe what they say about the war, about the sanctions, that it is the West that is to blame for the war, and so on? And if not, then what motivates them to support these messages and also the regime itself?

I think there are at least two or three different types. Of course, there are those who believe in these things and even more rabidly believe in what you see in pro-government media. Actually, this was also one of the shocking things to learn during our reporting process when we talked to people in government circles that yes,

there are actually people working for Viktor Orban who do believe the weirdest things,

the most incredible things. Who still think that Russia is winning this war, for example, or that that the US is essentially the puppet master behind the whole conflict. So, yes, there are people who believe in this.

Of course, there are always the cynical ones, those who are well-aware of the reality, but for various reasons, they are stuck in their own situation, working for the government or they just don’t see any way out of supporting Orban. Those who break with Orban, they usually are punished by pro-government media. So, there’s a huge motivation to fall in line. And also, there are sort of financial benefits to those who work for the government, not just a salary of a public servant that is these days, after all the raises, quite okay. But also, there are benefits to those who work for the government and who have influence over decision-making when it comes to procurements, contracting companies, contracting some family, relatives, company… So, there are different reasons.

Of course, there are those—usually these are the people who talk to journalists—who for some reason work for this government. They don’t really like it, actually, some of them really hate it. They plan to quit, but they wait for the perfect opportunity or for a better opportunity. And they just stay silent and do what’s assigned them to be done. And sometimes they tip off some journalists.

Let’s go back a little bit to what you said earlier, that basically the Hungarian government couldn’t do anything but to follow this path. However, in the article you write that there was a short period after the outbreak of the war when the pro-Russian narrative softened a little bit or maybe a lot, then it became even louder. What drives Hungary’s weird partnership with Russia? Is it down to economic matters or questions of dependency? Would that explain, for example, why the government threatened to veto some of the sanctions, for example, those impacting Patriarch Kirill? Or is it more about ideological and political questions?

Well, I have to be careful here. As an investigative journalist, I have to rely on facts. And the thing is that, and this is also something that we write about in this article, that the sheer dependency on Russian natural gas and also partly on cheap Russian oil does explain why the government is pursuing its pro-Russian policies. It’s essential for the Hungarian economy to keep on running to receive natural gas from Russia. So, it’s not just about the households and gas used for heating, but also the gas that’s used by the industry and hit by the Covid-19 crisis and the economic crisis following it. Of course, Hungary is already in a bad economic situation, then came the spending spree of the government during the campaign, which created a huge hole in the national budget.

So, by the time the war in Ukraine started, Hungary essentially became a hostage of Russia because of its dependency on Russian resources.

So, I would say that this in itself does explain what the Hungarian government is doing and also some of those gestures or measures or rhetoric that we see from the government, de-listing Patriarch Kirill from EU sanctions or other types of small favors that the Hungarian government is doing to Moscow. These are, I think, aimed at ensuring that Russia is not cutting off gas supplies, and also that they are open to renegotiate the financial agreement on how Hungary pays for gas, which we’ve seen in these last couple of months.

But, there are other factors as well, and this is also something that Direkt36 has been focusing on, that it’s not just the Hungarian national economy that’s depending on Russian money, but also some private interests. For example, entrepreneurs, businessmen in the Prime Minister’s circle who are essentially subcontractors in the Paks II nuclear power plant project making tons of money on that. Also, the gas deals in the past ten years and even before were also tied to some corruption issues. So, there were always intermediaries, broker companies profiting from Russian gas.

The third thing, and this is something that I’ve been specifically writing about, is that

there’s a high level of Russian infiltration when it comes to Hungary. And it would be just naive to think that the Russians don’t have advanced knowledge of what the Hungarian government is thinking, and what the Hungarian government’s negotiating strategies are.

When, for example, Orban arrives to Moscow or Peter Szijjarto, the Minister of Foreign Affairs arrives to meet Sergei Lavrov, the Russian counterpart is already briefed about what they are going to ask for and they are prepared with their answer.

In a more recent piece, you also cover a topic that is related to this. It’s about the ties of the Russian spy chief’s son to a businessman close to Antal Rogan, who belongs to Orban’s inner circle, and is basically head of the propaganda machine in Hungary. Do you think that Naryshkin’s son getting a residency permit was more about money or more about something else?

Well, it’s hard to tell. What we know is that there are, as far as I remember, more than 1000 Russian individuals who obtained a so-called “golden visa.” Not just a Hungarian residency permit, but also a visa that allows them to travel freely in the European Union or at least in the Schengen Zone. They paid a lot of money for that. I think primarily this whole golden visa business was about money because there were offshore companies involved in the process that profited from these deals. One of the companies has close ties to Mr. Shabtai Michaeli, a friend of Antal Rogan, and Mr. Michaeli’s company was the one actually selling the residency bonds to Russians. Michaeli denies that he was involved, but there are many, many articles pointing out all kinds of ties between Mr. Michaeli and the company that was selling these residency bonds.

This recent article that I wrote is about another of those ties we uncovered together with a Ukrainian OSINT [Open Source Intelligence] group that Andrey Naryshkin—the son of Sergey Naryshkin who is heading the SVR, the Russian foreign intelligence—has his registered Budapest home address in an apartment, that’s the property of a company that’s owned by Mr. Shabtai Michaeli. So, it seems that Michaeli was offering a full service to the Russians. He didn’t just sell residency bonds, but also, he let them register themselves in his property. The problem here is that this businessman, who was benefiting from these golden visas and who also let the Russian spy chief’s family to obtain residency permit and travel in the EU, this guy is a close friend of Antal Rogan, who’s not only the minister in charge of communications and propaganda, but since May, I think, he’s also overseeing the civilian national security agencies of Hungary, including the counterintelligence that is tasked with countering Russian spies.

So, you can imagine this absurd situation when, for example, I publish this piece and in a normal country, the Hungarian counterintelligence would be requested to start a probe into this businessman and his ties with Russian intelligence. And when they filed a report, that report would end up at the desk of the best friend of the man who was probed. So, it’s just insane and absurd.

It just really shows that basically there’s no willingness inside the Hungarian government to counter Russian infiltration in Hungary.

Has the country, Hungary itself, ever materially benefited from these close ties to Russia? We can think about the lower gas prices, if they were lower, for example.

I’m not an expert on energy and especially energy prices, but the experts that I read all say that Hungary never, ever received any substantial discount when it came to the price of natural gas. And also, the associated risks are still there. The Russians can cut off the gas supplies any time they want to. They’ve already done it to a number of other EU member states. So, I don’t really see any kind of benefit, but I do see, besides this risk of cutting off gas supplies, a reputational risk to Hungary. It’s a huge problem. It’s not just that Hungary is getting isolated in general within the NATO and EU community, but it’s also getting alienated by its closest allies and the Visegrad region—the Czech Republic, Slovakia and even Poland. So,

the space for maneuvering for Orban is shrinking. This is because he’s sticking to his pro-Kremlin policies.

For some reason, the Hungarian government thinks that even the relationship between Hungary and Poland can be sacrificed for this relationship with Moscow. I don’t really see why or how Hungary can gain from this Russian relationship. Now, it’s pretty obvious that Russia is not going to win this war. I’m not sure if they are going to lose it, but it’s pretty sure that they are not going to win this war. Whenever the war in Ukraine ends, Russia is going to be a weakened country, not just militarily but also in economic figures. So, I don’t really see what kind of, for example, large Russian investments could come to Hungary in the future.

One of the direct consequences of the war is that the whole continent is trying to shift from Russian gas to American LNG, or gas and oil coming from the Middle East, which is happening. In a couple of years, Russia essentially will lose all its key positions when it comes to transferring gas and oil to the continent. So, I don’t know why can’t Hungary just follow what the other countries are doing? Why can’t we stick with the mainstream? And why are we so cowardly that it takes sometimes days or half a day to condemn an attack on Ukraine that’s aimed at children’s hospitals, or whenever a new mass grave is discovered? I don’t really see how Hungary is benefiting from these policies.

The transcript has been edited for length and clarity.

In collaboration with Hannah Vos.

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